Tightening defence exports

Australia’s parliament enacted the Defence Trade Controls Amendment Act 2024 and the Defence Trade Legislation Amendment Regulations 2024, aiming to strengthen the country’s defence export control framework.

The regulations were enacted in response to Australia’s “deteriorating strategic environment”, according to the Australian Defence Force (ADF) website.

Taking effect from 1 September, the amended regulations are designed to ensure the protection of Australian technology and information, particularly in the increasingly competitive Indo-Pacific region.

Key changes include the creation of three new criminal offences for the supply of Defence and Strategic Goods List (DSGL) technology and services to foreign nationals, both within and outside Australia.

The ADF says the legislation strikes a balance between safeguarding national security and promoting economic prosperity by focusing controls on items that pose a risk to Australia’s defence, security and international relations. This maintains the principle of responsible transfers under Australia’s export control system.

CHINA

Simplifying the REIT regime

China’s National Development and Reform Commission (NDRC) announced updates to the Real Estate Investment Trusts (REITs) regime aimed at expanding eligible asset classes and simplifying the filing process, effective from 1 August.

Baker McKenzie noted key changes including the addition of offices and hotels as eligible assets, provided they meet specific ownership and physical integration criteria with shopping centres or industrial parks.

The minimum yield requirement has been removed, previously set at 3.8% for sponsor-owned properties. The filing process has also been streamlined by eliminating the need for pre-REIT consultations and establishing time limits for authorities to complete filing steps.

The percentage of net IPO proceeds that can be retained without reinvestment has meanwhile increased from 10% to 15%.

The reforms are intended to encourage more sponsors to list assets via REITs, with hopes for further regulatory enhancements.

Notifying CCI of major deals

Any combination transaction exceeding INR2 billion (USD267 million) will require prior approval from the Competition Commission of India (CCI) as of 10 September.

The requirement for CCI notification when a company has substantial business operations in India was announced by the Ministry of Corporate Affairs (MCA).

Notification of such transactions must be filed with the CCI using form I of schedule 1 of the regulations. However, where the parties’ combined market share in India is more than 15% (in the same market) or more than 25% (in different markets), notification is made using form II of the same schedule.

New franchise regulations

Indonesia enacted updated regulations on franchising on 2 September.

Key updates include reducing the minimum operational period for franchise registration from five to three years, and requiring IP to be registered before submitting a franchise application.

Also, foreign franchisors must now provide additional legal documentation from their home country.

According to Tilleke & Gibbins, these updates aim to create a more structured and comprehensive franchise system, promoting growth and improving regulatory clarity for businesses operating in the franchise industry.

The regulations are updated in Government Regulation No. 35 of 2024 (GR 35/2024), replacing GR 42/2007.

GR 35/2024 also adjusts administrative sanctions, introduces new categories of franchise organisers (e.g., sub-franchisors), and eliminates the need to renew the franchise registration every five years.

Updated Copyright Law

New regulations on the establishment of Collective Management Organisations (CMOs) on copyrights or related rights in Myanmar became effective from 6 August, according to legal and tax consultancy DFDL.

A CMO, operating on a non-profit basis, is formed by copyright holders to manage their rights collectively. The regulations cover the registration process, organisational responsibilities and procedures for suspending or renewing registrations.

Key requirements include submitting a detailed application to the IP agency, including proof of organisational structure and capacity. Once approved, CMOs are granted a five-year registration, with mandatory annual meetings and reporting. Organisations must transparently collect and distribute royalties, maintain accurate records and resolve disputes amicably, or through legal action.

The regulations ensure accountability and transparency, emphasising the fair representation of copyright holders.

Strengthening cybersecurity

Malaysia’s parliament passed the Cyber Security Act 2024 to strengthen national cyber resilience, particularly for critical information infrastructure (NCII), effective from 26 August.

The act mandates that NCII entities follow strict cybersecurity codes, conduct risk assessments, and report incidents promptly. It introduces a licensing regime for cybersecurity service providers, ensuring services meet international standards, with penalties for non-compliance including fines up to MYR500,000 (USD106,000), imprisonment of up to 10 years, or both.

According to Herbert Smith Freehills, NCII sector leads are government entities or persons who own or operate NCIIs in each NCII sector as designated by the minister charged with the responsibility for cybersecurity.

Liabilities under the Cyber Security Act also extend to employees and agents of an offending entity.

New minimum wage

Cambodia’s Ministry of Labour and Vocational Training has set a new minimum wage for workers in the garment, textile, footwear, travel product and bag sectors, effective from 1 January 2025.

Regular workers will receive USD208 per month, while probationary workers will earn USD206 per month. For piece rate workers, wages will be based on production, with employers required to ensure pay meets the minimum wage if production-based earnings fall short.

Existing benefits – such as a USD7 transportation or accommodation allowance, a USD10 attendance bonus, meal allowance and seniority bonus – remain unchanged.

Legal and tax consultancy DFDL Cambodia explained that the wage determination process, outlined under the 2018 Law on Minimum Wage, considers factors like inflation, living costs, productivity and industry profitability. Wage discussions occur annually unless otherwise decided by the National Council on Minimum Wages

Regulating virtual banks

The Bank of Thailand (BOT) issued the Virtual Bank Supervision Regulation on 12 September, requiring virtual banks to adhere to standards for traditional commercial banks.

Key requirements include maintaining adequate capital to avoid risks to the financial system, and delivering services mainly through digital channels.

Virtual banks are mandated to operate exclusively via digital platforms, with limited exceptions. For example, with the BOT’s approval, a virtual bank may use other commercial bank electronic branches via an ATM pool system.

According to Tilleke & Gibbins, additional rules are in place due to their digital operations. Virtual banks are considered part of financial business groups, subject to the BOT’s regulations on financial business group supervision.

Guidelines for IP lawyers

The Intellectual Property Office of the Philippines (IPOPHL) has introduced new regulations to formally recognise patent and trademark agents and attorneys, effective from 22 August.

According to the IPOPHL website, memorandum circulars 12 and 13 establish a recognition system aimed at enhancing the credibility and competency of IP service providers. The guidelines outline qualifications, application procedures, training, fees and grounds for revocation or renewal of recognition.

Non-lawyers providing IP services must obtain this recognition, while for lawyers it is optional. The names of recognised agents and attorneys will be listed on the IPOPHL website, with recognition valid for three years and subject to renewal. Agents may lose their recognition for failing to meet standards or ethical violations.

To facilitate a smooth transition, the IPOPHL has provided 24 months for patent representatives and 18 months for trademark representatives to comply with the new rules.

Increased paternity leave

Singapore has updated the Lion City’s Employment Law as part of a broader reset to support families, to take effect on 1 April 2025.

Key updates include increasing paid paternity leave from two to four weeks. Under the current regime, a husband can share up to four weeks of his wife’s 16-week maternity leave entitlement.

The limitation of this policy is that it reduces the mother’s entitlement to maternity leave.

From 1 April 2025, employers must mandatorily offer four weeks of paid paternity leave to eligible employees.

Employers must adjust their policies to accommodate the new entitlements, which aim to balance work and parenting responsibilities, according to a Dentons Rodyk & Davidson report.

Dentons added that these policies are part of the Singapore government’s effort to provide stronger caregiving support for parents.

July-August

Foreign owners’ asset registration requirements

Since 1 July 2023, foreign persons – as defined under the Foreign Acquisitions and Takeovers Act, 1975 – have been subject to extended obligations to register certain acquisitions, divestments and changes in interests to their Australian investments with the registrar for the Register of Foreign Ownership of Australian Assets, Pinsent Masons reported.

According to the firm, the matters that require notification to the registrar are broader than those that require notification to or approval from Australia’s Foreign Investment Review Board.

For example, all interests in Australian land must be registered, regardless of the value of the transaction.

Those who fail to comply with notification requirements can be fined up to AUD78,250 (USD50,925), so foreign persons must be aware of and comply with their notification requirements.

Finance Bill 2024 changes implemented

The Finance Bill 2024, effective from 6 June, has introduced significant changes to the tax system aimed at streamlining processes and promoting economic growth, according to a DFDL report.

The firm summarised a few key value- added tax (VAT) changes:

• The definition of “VAT withholding entity” now includes entities having an annual turnover of BDT100 million (USD850,000) or more;
• The deposition of a disputed VAT amount for the purpose of filing an appeal to the Taxes Appellate Tribunal or the appellate joint commissioner, to be reduced to 10% from 20%;
• For supplies exceeding BDT25,000 in value, mentioning the VAT registration of the buyer on the tax invoice will now be optional (it was previously mandatory); and
• VAT exemption on tour operator services under service code S077.00 has been withdrawn and a 15% VAT has been imposed.

Government establishes Special Tax Audit Unit

On 16 July, the Royal Government of Cambodia issued Sub-decree 160, establishing the Special Tax Audit Unit (STAU) within the General Department of Taxation (GDT), DFDL reported.

The firm explained that the STAU aims to streamline the tax audit process, address taxpayer issues and enhance the business environment to attract investment.

The STAU, which is similar in status to the Large Taxpayers Department and the Enterprise Audit Department, will manage and conduct tax audits, focusing on taxpayers with Gold Tax Compliance status and others meeting specific criteria.

Its key responsibilities include conducting audits, reviewing documents, developing annual audit plans and providing updates to taxpayers. The STAU will be led by a director equivalent to a department head within the GDT, supported by vice chiefs and potentially officials from outside the GDT.

Overseas investment directions amendment

The Reserve Bank of India (RBI) has revised the Foreign Exchange Management (Overseas Investment) Directions, 2022, according to Fox Mandal & Associates.

This amendment provides enhanced clarity on overseas portfolio investments in foreign funds, allowing Indian investors and companies to invest in overseas funds, including those established in the US and Singapore, without restrictions.

The firm explained that the revised paragraph broadens the scope to include investments in “units or any other instrument” issued by overseas investment funds. This change clarifies that both listed Indian companies and resident individuals can invest in these instruments. Unlisted Indian entities are also permitted to invest in international financial services centres, subject to applicable limits.

Construction Business Act amendments passed

The bill to partially amend the Construction Business Act and the Act for Promoting Proper Tendering and Contracting for Public Works (Cabinet Bill No. 51) was passed by the National Diet (the national legislature of Japan), according to Nishimura & Asahi.

The firm reported that this revision aims to secure a stable workforce in the construction industry by introducing measures to:

1. Secure wage resources for the improvement of worker treatment in the industry and their dissemination to subcontractors;
2. Prevent a burden on contractors regarding labour costs by facilitating the smooth passing on of material price increases to contract prices; and
3. Promote work style reforms and productivity improvements.

New beneficial ownership guidelines implemented

The Companies Commission of Malaysia (CCM) implemented new guidelines for beneficial ownership (BO) reporting and, as of 1 July, businesses that do not comply with the new guidelines will be deemed to be non-compliant, according to a report by Dezan Shira & Associates.

The firm explained that all entities must submit information on their beneficial owner to the CCM through the Electronic Beneficial Ownership System.

The guidelines also introduced a new definition of beneficial ownership (BO): “A natural person who ultimately controls or owns a company through interest in shares and effective interest, and includes an individual who exercises ultimate effective control over the company.”

The firm added that no entity is exempt from BO reporting (previously, businesses that had met one or more exemption criteria could be exempted from identifying the BO).

New government procurement reforms

The Senate and House of Representatives of the Philippines undertook a series of legislative actions including public hearings, amendments and plenary sessions to pass Senate Bill No. 2593 and House Bill No. 9648, resulting in the enactment of the New Government Procurement Reform Act, or Republic Act No. 12009 (RA 12009) on 20 July, according to the Government Procurement Policy Board.

RA 12009 aims to enhance public services and transparency by streamlining procurement procedures for national and local government units to improve efficiency, reduce opportunities for corruption and update the outdated Republic Act 9184.

According to a Senate of the Philippines press release, the key reforms include promoting sustainable procurement practices and allowing innovative methods such as design-build procurement.

Employer obligations under new law on maternal and child welfare

On 2 July, Law No. 4 of 2024 regarding Maternal and Child Welfare During the First Thousand Days of Life was enacted, SSEK reported.

According to the firm, Law No. 4 grants working mothers several rights such as maternity leave, miscarriage leave, facilities and time for breastfeeding at work, sufficient time off for childcare, and access to affordable day care.

The firm added that the new law mandates at least three months of maternity leave post-birth, extendable by up to three additional months with medical certification. Employers must continue paying salaries during maternity leave, using a tiered payment structure: 100% salary for the first four months; and 75% for the fifth and sixth months.

The new law requires employers to adapt their policies to comply with these updated regulations, SSEK concluded.

New non-cash payment decree passed

REGULATORY REGIME FOR STABLECOIN ISSUERS PROPOSED

May – June 2024

Company Law amendments adopted

A revision of the new Company Law was adopted on 29 December 2023 at the 14th National People’s Congress and will come into effect on 1 July 2024, Blossom & Credit Law Firm reported. The amendments include the following:

• New provisions on the horizontal corporate personality denial system, holding shareholders accountable for the actions of other controlled companies;
• Limited duration capital contribution system reforms, which set a five-year capital contribution period to replace the previous “zero contribution”, requiring companies to complete capital contributions within the specified period; and
• Capital contribution with equity and creditor’s rights tax burden on non-monetary contribution. For tax burden and impact, a company should note that when a company invests with equity and creditor’s rights, it should be subject to fair-value assessment.

Construction industry’s Security of Payment Bill

On 16 May, Hong Kong’s Development Bureau published the Construction Industry Security of Payment Bill (SOP Bill), King & Wood Mallesons reported.

The SOP Bill was gazetted on 17 May and was introduced into the legislative council for a first reading on 29 May.

The SOP Bill, once enacted, will have a significant impact on the Hong Kong construction industry, and will drive significant changes to how contracts are administered, how contractors, sub-contractors and suppliers are paid, and how disputes are managed in Hong Kong, King & Wood Mallesons explained.

The SOP Bill incorporates mandatory payment and dispute resolution provisions into all contracts for construction work (subject to some limited exclusions) in Hong Kong that are entered into on or after the commencement date of the legislation.

Ex-ante legislation recommendation

The Ministry of Corporate Affairs released a report prepared by the Committee on Digital Competition Law that recommended the introduction of ex-ante legislation specifically applicable to large digital enterprises to supplement the Competition Act 2002 (as amended).

According to IndusLaw, the report comprised a draft Digital Competition Bill 2024, inviting public comment until 15 April 2024.

The firm reported that while the efforts of the Committee on Digital Competition Law are laudable, India is a developing economy that is just starting to enjoy the fruits of internet penetration in the form of a growing digital economy and a robust startup ecosystem. Thus, any overzealousness by India to introduce a similar ex-ante law (to maintain pace with its foreign counterparts) may be counterproductive, and even have unintended negative consequences.

Hydrogen and carbon capture acts passed

The Hydrogen Society Promotion Act and the CCS Business Act were passed in Japan’s parliament, Norton Rose Fulbright reported.

Under the Hydrogen Society Promotion Act, the Japanese government will accept applications for support, providing subsidies to help close the price gap between hydrogen and existing fossil fuels, the firm explained.

The CCS Business Act supports companies in launching carbon capture and storage businesses in Japan by 2030. The act establishes licensing regimes for rights such as carbon storage and exploratory drilling, providing greater legal certainty for CCS businesses.

AIAC Court of Arbitration Protem Committee constituted

The Asian International Arbitration Centre (AIAC) has announced the official constitution of the Protem Committee for the inaugural AIAC Court of Arbitration. Pursuant to the signing of the supplementary agreement to the host country agreement between Malaysia and the Asian-African Legal Consultative Organisation on 20 February 2024, institutional reforms have been set in motion. These reforms aim to introduce an effective and transparent governance and administrative structure that would strengthen the overall efficiency and global competitiveness of the AIAC.

The Protem Committee comprises international and domestic personalities in the legal and alternative dispute resolution fields, led by chair Mary Lim Thiam Suan.

FTA ratification ‘to boost investment opportunities’

The Philippines ratified the Second Protocol of the Asean-Australia-New Zealand Free Trade Agreement (AANZFTA) to boost trade and investment opportunities and modernise the agreement to enhance market access and promote sustainable development, according to Dezan Shira & Associates.

The protocol is anticipated to bolster market access, integrate MSMEs into global value chains and stimulate e-commerce adoption.

In 2014, the First Protocol of the AANZFTA introduced several amendments regarding goods. The Second Protocol is slated to take effect 60 days after the deposition of ratifications by Australia, New Zealand and at least four Asean member states with the Asean secretariat, a process that is not expected to be completed until late 2024 at the earliest, the firm reported.

Government accepts flexible work recommendations

The Singapore Government has accepted all 10 recommendations by the Tripartite Workgroup on the Tripartite Guidelines on Flexible Work Arrangement Requests, WongPartnership reported.

The mandatory guidelines come into effect on 1 December 2024. They are intended to shape the right norms and expectations concerning flexible work arrangements (FWAs) by delineating the process by which employees submit formal FWA requests, and how employers and supervisors should handle such requests, the firm explained.

NEW REGULATION ON SOLAR ROOFTOP POWER PLANTS

The government of Indonesia is fast-tracking solar energy development by introducing a new regulation on rooftop solar power plants to achieve a new and renewable energy mix of 23% by 2025, SSEK reported.

According to the firm, the most recent amendment is MEMR Regulation No. 16 of 2019, which permits the installation of up to 100% of installed PLN capacity and export of up to 65% against the utility bill.

The new regulation on rooftop solar power plants has been enacted to realise the untapped potential for solar power in Indonesia, SSEK concluded.

TAIWAN

ELECTRONIC SIGNATURES ACT AMENDMENTS TO PREVENT SCAMS

The Legislative Yuan passed amendments to Taiwan’s Electronic Signatures Act (ESA) on 30 April 2024, the first since 2002, according to a Lee and Li report.

The firm enumerated the key changes, which include allowing the Judicial Yuan or Ministry of Justice to exclude the application of the ESA to judicial procedures, ensuring electronic documents and signatures have the same legal effect as physical ones, and eliminating the need for counterparty consent for using
electronic forms.

The Ministry of Digital Affairs intends to verify advertisers’ identities to prevent investment scams and dummy accounts.

PM approves power plan to attract investment

The prime minister of Vietnam approved the blueprint to implement the National Power Development Plan from 2021 to 2030, with a vision to 2050 (Decision 262), with immediate effect, DFDL reported.

According to the firm, the roadmap attached to Decision 262 (PDP8 Implementation Plan) aims to:

• Effectively implement the approved National Power Development Plan for the period 2021-2030, with a vision to 2050 (PDP8);
• Vigorously implement the energy transition from fossil fuel to other new energy sources and renewable energies; and
• Determine solutions to attract investment in electricity development.

Government increases average salaries

March – April 2024

First regulations for mandatory carbon market

On 25 January 2024, China’s State Council promulgated the Interim Regulations on Administration of Carbon Emissions Trading, which will come into force on 1 May. The interim regulations oversee carbon emission allowances (CEAs) in the mandatory carbon market, while the Administrative Measures for Voluntary Trading of Greenhouse Gas Emission Reduction (Trial), effective from 19 October 2023, regulate the China Certified Emission Reduction (CCER) in the voluntary carbon market.

Under the new regulations, a national carbon emission rights registration institution is responsible for registering trading products and services, while a national carbon emission rights trading institution will carry out centralised trading of carbon emission rights.

The ecology and environment authority and other authorities will propose the types of greenhouse gases and the scope of industries to be covered by carbon emissions trading.

The national ecology and environment authority and other relevant authorities will formulate criteria for determining key emission entities, as well as the total amount of annual CEAs and allocation plans. Key emission entities must record and calculate their greenhouse gas emissions accurately and prepare annual greenhouse gas emission reports. They may purchase or sell CEAs through the national carbon emission trading market, and apply the CCER against the settlement of CEAs.

IDX and SGX enter collaboration

The Singapore Exchange (SGX) announced a memorandum of understanding with its Indonesian counterpart, which will allow both exchanges to lay the groundwork for greater market connectivity.

WongPartnership and Makes & Partners Law Firm, both members of regional law network WPG, noted the agreement was more expansive than the one in 2023 between the SGX and the Stock Exchange of Thailand regarding depository receipts.

The firms said the agreements reflect a push to foster greater connectivity between regional markets in the Association of Southeast Asian Nations and provide additional investment opportunities for investors beyond their respective markets.

Feedback sought on planned digital competition law

The Ministry of Corporate Affairs (MCA) has invited public comment on the report of the Committee on Digital Competition Law (CDCL) and an accompanying draft bill of digital competition law.

Established in response to concerns of anti-competitive practices by major tech companies, the CDCL mandate was to assess the necessity of a separate law to govern competition in digital markets.

The committee’s report is now open for public scrutiny. According to the committee, there is a need for an ex-ante regulatory mechanism tailored to the distinct dynamics of digital markets. Its proposal suggests supplementing the existing ex-post framework under the Competition Act, 2002, with predetermined rules to regulate the conduct of large digital enterprises.

Additionally, the report underscores the importance of ensuring that regulations do not stifle innovation or burden smaller enterprises with excessive compliance requirements.

Changes to continuous disclosure regulations

Amendments to the Financial Instruments and Exchange Act (FIEA) have strengthened its continuous disclosure requirements, while quarterly report obligations have been abolished, Anderson Mori & Tomotsune reported.

The act’s new disclosure requirements concern “policy and efforts towards sustainability”, including for sustainability governance, risk management, strategies, indices and targets.

Additional requirements include:

• Agreements with shareholders regarding an issuer’s governance;
• Agreements with shareholders regarding an increase/decrease in their holdings of an issuer’s shares; and
• Financial covenants contained in loan agreements and bonds issued by issuers.

The amendments abolish the obligation to submit quarterly reports, a change made to improve the efficiency of corporate disclosure requirements required by stock exchange rules.

The act is likely to receive further strengthening on disclosure requirements at the beginning of 2025.

Cybersecurity bill passed

On 27 March 2024, the Dewan Rakyat (house of representatives) passed the Cybersecurity Bill 2024. It aims to enhance and safeguard Malaysia’s cybersecurity landscape by, among other things, requiring entities in national critical information infrastructure (NCII) sectors to comply with specific standards, measures and processes when handling cybersecurity incidents, Skrine has reported.

The bill:

• Provides for the establishment of a national cyber security committee;
• Explains the CEO’s duties; and
• Introduces a regulatory framework for the NCII sector.

There are 11 NCII sectors set out in the bill: government; banking and finance; transportation; defence and national security; information, communications and digital; healthcare services; water, sewage and waste management; energy; agriculture and plantation; trade, industry and economy; and science, technology and innovation.

The bill also introduces a new licensing regime for providers of prescribed cybersecurity services, but its specific scope has yet to be prescribed by the minister.

Skrine says the bill is also stated to have extra-territorial effect and applies to any person, whatever their nationality or citizenship, outside and within Malaysia. Where an offence under the bill is committed outside Malaysia, it may be dealt with as if the offence was committed within Malaysia.

PRESIDENTIAL RULE FOR CARBON CAPTURE AND STORAGE ISSUED ON CCS

The government of Indonesia has enacted a new regulation for carbon capture and storage (CCS) activities, DFDL has reported.

Presidential Regulation of the Republic of Indonesia No. 14 of 2024 concerning the Implementation of Carbon Capture and Storage Activities covers CCS based on either a co-operation contract/kontrak kerja sama (KKS) or on an exploration licence and storage operation licence.

In carbon storage licence areas, CCS implementation will be carried out by investors based on exploration licences and storage operation licences. There are three licences: exploration; storage operation; and carbon transportation.

The monetisation of CCS implementation will be through storage fees and/or other methods. Tax incentives and non-tax incentives can be given to support CCS activities that meet requirements.

All previous laws and regulations related to the implementation of CCS remain applicable as long as they do not conflict with the presidential regulation.

CAMBODIA

TAX AMNESTY DEADLINE ANNOUNCED

Prakas No. 071 on Incentives for the Voluntary Correction of Tax Declarations was signed by the deputy prime minister and minister of the economy and finance, Aun Pornmoniroth, on 30 January 2024, DFDL reported.

It applies to self-assessment taxpayers who wish to amend previous tax declarations due to oversight or unintended error. Under Prakas 071, self-assessment taxpayers who voluntarily submit a request to correct their accounting records and tax declarations before 30 June 2024 will be exempt from administrative sanctions including additional tax, interest and penalties. There are some caveats on exemptions to administrative sanctions.

Prakas 071 amends the application of Prakas 217, which was issued by the Ministry of Economy and Finance in March 2022.

Regulatory plan for hydrogen development

Vietnam has taken initial steps to formulate regulations for the development of a hydrogen industry in line with its energy transition roadmap, Baker McKenzie reported.

On 7 February, the prime minister issued Decision No. 165/QD-TTg, approving a national strategy for the development of hydrogen to 2030, with a vision to 2045. It dovetails with a recently approved national power development masterplan (PDP8) and its implementation plan, as well as the national overall masterplan for energy.

The hydrogen strategy lays a foundation for development by setting goals, directions, implementation tasks and measures, marking a significant step in Vietnam’s transition to green energy.

Key highlights of the strategy include:

• Development of a hydrogen ecosystem and value chain, with a well-connected and modern infrastructure system;
• Development in accordance with the energy transition roadmap and global technology trends;
• Prioritised formulation of policies and incentive mechanisms; and
• Objectives and solutions for policies and mechanisms, investment and finance, science and technology, environmental protection, and sustainable development.

Moves towards virtual asset controls

Vietnamese law does not contain a specific legal framework for virtual assets and virtual asset service providers, but the situation will change in 2024 and 2025, DFDL notes.

On 23 February 2024, the prime minister issued Decision No. 194/QD-TTg for a national action plan on anti-money laundering, counter-terrorism financing and proliferation of weapons of mass destruction. The plan includes a series of actions demonstrating the government’s determination to remove Vietnam from jurisdictions under the Financial Action Task Force’s (FATF) increased monitoring list (grey list). Among these, a legal framework for virtual assets and virtual asset service providers will be built.

January – February 2024

Deadline approaching for foreign worker permits

As the deadline for the 2024 foreign employee work permits from the Ministry of Labour and Vocational Training (MLVT) looms closer to 31 March 2024, employers in Cambodia are reminded of their obligation to comply, according to a DFDL report.

As outlined in the report, this requirement extends to all entities, including representative offices, branches, private or public limited companies, non-governmental organisations, and associations. Failure to adhere to the foreign employee work permit regulations may result in penalties of up to KHR12.6 million (USD3,136) imposed by the MLVT, and/or up to KHR18 million by a court.

According to the firm, by Guideline 517 on Administrative Fines for Enterprises Employing Foreign Employees without Work Permit issued on 17 January 2023, the MLVT can impose administrative fines based on the actual number of foreign employees without valid work permits if fewer than five are found. For enterprises with five or more foreign employees working without work permits, a maximum administrative fine of KHR63 million, five times the MLVT’s fine, may be imposed.

Repeated offences could lead to triple fines. The Labour Law further stipulates potential imprisonment ranging from six days to one month for individuals hiring or retaining foreign employees without work permits.

China’s Company Law amendments

On 29 December 2023, the Standing Committee of the National People’s Congress of China promulgated the amended Company Law, after its deliberation of four versions of draft amendments in the past three years. The new Company Law will come into force on 1 July 2024.

The new Company Law not only governs new companies established after its effective date, but also has significant implications on existing companies. Yet, the implementation of many articles is still subject to further interpretation and/or guidance from the Chinese authorities and courts.

Therefore, foreign companies, investors and other stakeholders should pay close attention to this new legislation and the pertinent regulations, judicial interpretations and other official guidelines that may be issued concerning its implementation in the near future.

It is advisable for foreign companies and their investors to revisit the companies’ governance structure and assess: (1) If any mandatory adjustment is required in view of the new company law requirements (e.g. number of supervisors or alternatives, applicability of mandatory employee representation, board meeting quorum and resolution); and (2) If the governance structure can be improved (and if a streamlined governance structure would be preferable) in view of the greater flexibility introduced by the new Company Law and based on the specific needs of firms.

Considering the increasing exposure to personal liabilities of directors, supervisors and senior management, companies may consider including indemnification clauses in the articles of association, and/or purchasing (director) liability insurance to give more protection to directors acting in good faith and with due care. That said, whether local company registration authorities will accept filing of amended articles of association with such special clauses (including indemnification clauses) is to be tested in practice.

Turnover standards raised for M&A anti-monopoly filing

The State Council published in full its revised Provisions on Thresholds for the Filing of Concentrations of Undertakings on 26 January 2024, and the standards came into force on the same day.

Under the revised turnover filing provisions, transactions that meet the following filing standards will trigger the anti-monopoly filing obligation in China:

(1) The combined worldwide turnover of all undertakings participating in the concentration exceeds RMB12 billion (USD1.7 billion – RMB10 billion before the revision), or the combined turnover in China exceeds RMB4 billion (RMB2 billion before the revision); and

(2) At least two undertakings have turnover in China of more than RMB800 million (RMB400 million before the revision).

In addition to raising the turnover standard significantly, a draft of the provisions for comment, published by the State Administration for Market Regulation in June 2022, also proposed a new hybrid filing standard that could take into account both turnover and market value (or valuation) of the parties, so as to strengthen the supervision over startup acquisitions characterised by a relatively high transaction amount but low turnover of the target company.

However, the provisions ultimately do not incorporate this hybrid filing standard, and continue to determine whether a transaction should be filed based on the worldwide and domestic turnover of the undertakings involved.

IP office opens patent applications for public review

The Intellectual Property Office of the Philippines (IPOPHL) has started notifying the public through its website of the publication of patent, utility model and industrial applications for community review pursuant to rules 802 and 1700 of the amended patent rules, Rouse has advised. Notifications will also be sent by the IPOPHL to the concerned industries.

This publication is separate from the publication of applications in the Official Gazette. The aim is to enhance transparency in granting patents and improve the quality of patents, utility models and industrial design registrations. The IPOPHL website invites concerned communities or any third party to submit observations or adverse information, if any, within one month from publication.

The IPOPHL has officially announced its intention for the Philippines to join the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs in 2024.

EIT LAW AMENDMENTS RATIFIED

On 2 January 2024, Indonesia’s president signed the second revision of Law No. 11 of 2008 regarding Electronic Information and Transactions (EIT Law), SSEK Law Firm advised.

The new revision modifies existing clauses, introduces additional articles, and makes subtle changes to phrasing. The amendments generally broaden the scope of government oversight of electronic system providers (ESPs), facilitate mutual recognition of electronic certificates, expand the services electronic certification providers (ECPs) can offer, and introduce safeguards for child protection, SSEK said.

The updated EIT Law also delineates stricter regulations for electronic signatures in high-risk electronic transactions and formalises protocols for international electronic contracts. Notably, the law now includes criminal penalties for defamatory statements aimed at damaging a person’s reputation, as well as for the deliberate and illegal use of violence or defamation to coerce individuals into relinquishing property or settling debts.

VIETNAM

INCENTIVE PLANS FOR FOREIGN INVESTMENT IN PHARMA FIRMS

The Ministry of Health in Vietnam has proposed a draft amendment to the Pharmacy Law of 2016, aiming to enhance the rights and responsibilities of foreign-invested pharmaceutical companies, according to a Dezan Shira and Associates report.

According to the firm, the amendment seeks to address issues and difficulties in the pharmaceutical industry, outlining changes in terminology, policies, regulations, drug registration, export and import procedures, recalls, advertising, clinical trials, quality management and price management.

The firm reported that the draft amendment focuses on incentivising the pharmaceutical industry by proposing changes to article 7 of the Pharmacy Law. It outlines various types of incentives, expanding eligible pharmaceutical fields. The incentives include tax policies, land leasing, capital borrowing, administrative support, certificates for pharmaceutical business qualifications and drug circulation, support for raw materials and encouragement for scientific research in pharmaceutical technology and biotechnology for new drug production.

Court precedent on transnational issue estoppel

The Singapore Court of Appeal, in the case of The Republic of India v Deutsche Telekom, has established the applicability of transnational issue estoppel in the realm of international commercial arbitration, WongPartnership reported.

According to the firm, this doctrine prevents litigants from relitigating points previously adjudicated by the seat court in the context of enforcing arbitral awards. The majority of the apex court, in an obiter statement, tentatively introduced the “primacy principle” as a prospective norm in Singapore arbitration law.

The principle states that when the enforcement court is not barred by transnational issue estoppel from scrutinising issues related to the validity of an arbitral award, it might be deemed appropriate to accord precedence to the seat court’s prior decision. This presumption can be rebutted only by specific considerations, such as public policy concerns relevant to the jurisdiction of the enforcement court.

Singapore GST increase warrants monitoring

Singapore has increased its goods and services tax (GST) rate – levied on most supplies of goods and services as well as on imported goods – by 1% from 1 January 2024. Singapore’s 2022 budget raised the rate in two steps of 1%, to 8% in 2023, and to 9% in 2024.

Asia Briefing Weekly and Dezan Shira & Associates advised GST-registered businesses to address areas including: (1) Updatig accounting and invoicing systems to accommodate the new GST rate; (2) Updating any pricing schedules made available to customers and the public, such as on websites; (3) Updating cash register systems; (4) Reviewing contracts and agreements with suppliers or customers to accommodate the new rate; (5) Equipping employees with the relevant GST knowledge so that they are aware of its impact; and (6) Seeking the help of professional advisers who can assist in applying for any relevant GST schemes from the government.

Notification obligation for stock-based compensation

The Income Tax Act and its Enforcement Decree were recently revised to introduce a requirement for local subsidiaries or branches of foreign companies in South Korea to file information concerning stock-based compensation issued to their executives and employees by foreign firms, Herbert Smith Freehills has advised. The requirement was effective from 1 January 2024 to stock-based compensation received or exercised on or after this date.

From 1 January 2024, where executives or employees of a local subsidiary or branch of a foreign company receive or exercise stock-based compensation granted by the foreign parent company, the local subsidiary or branch must submit the following information to the South Korean tax authority: (1) Details of the grant, exercise and payment schedules of the stock-based compensation; (2) Profits arising from such exercise and payment; and (3) Personal information of the relevant executive or employee.

The information must be submitted by 10 March of the year following the tax year in which the exercise or payment of the stock-based compensation occurs. HSF advised employers who have issued or are intending to issue stock-based compensation to ensure they comply with the filing obligation if it is granted by a foreign parent company.

New disclosure rules for e-platforms

Since 1 January 2024, Thailand’s Revenue Department has required electronic platforms such as e-commerce and e-marketplaces to disclose their revenue from the business operators on their platforms.

The Revenue Department hopes that it can aid more accurate and efficient tax collection and develop fair competition between local and international sellers, Asia Briefing reported.

Under the notification, electronic platforms must open a special account containing data on the revenues received from each business operator and submit the data through the Revenue Department’s electronic reporting system within 150 days of the fiscal year. Only electronic operators registered in Thailand with annual revenue exceeding THB1 billion (USD28 million) must submit the report. Electronic operators under the supervision of the Bank of Thailand or the Office of the Securities and Exchange Commission are exempted from the requirement.

Key amendments to credit institutions law

The Amended Law on Credit Institutions 2024 was approved by Vietnam’s National Assembly on 18 January 2024 and is effective from 1 July 2024, DFDL reported, highlighting key provisions.

Shareholders owning 1% or more of the charter capital of a credit institution are required to provide information about themselves, related persons and their ownership ratios and publicly disclose this information.

There is a reduction in the ownership percentage limitation for shareholders who are entities (including indirect shareholders) from 15% to 10% and for shareholders and related persons from 20% to 15%. This amendment includes a transitional provision, that shareholders who exceed prescribed ownership limitations can maintain their current shareholding, but will not be permitted to increase their shares until they comply with limitation requirements.

Credit institutions may not sell non-compulsory insurance products in conjunction with providing banking products and services. Also, the governor of the State Bank of Vietnam has the authority to define the scope of insurance agency activities for credit institutions.

Additional categories of related persons are introduced, including: “(1) Subsidiaries of credit institutions; and (2) Grandparents, great-grandparents, grandchildren, great-grandchildren, aunts, uncles, nephews, nieces, cousins and vice versa.” The law further defines which individuals are authorised to represent shares/capital contribution in the credit institution.