Regional Round-Up

Your Snapshot of Key Legal Developments in Asia

Issue 3 - Jul/Aug/Sep 2018

COVER STORY

    CAMBODIA
    CHINA
    INDONESIA
    LAO PDR
    MALAYSIA
    MYANMAR
    PHILIPPINES
    SINGAPORE
    THAILAND
    VIETNAM

    CAMBODIA

    NCLMUP Further Instructs on Management of Construction Sites in Preah Sihanouk Province

    On 18 September 2018, the President of the National Committee for Land Management and Urban Planning ("NCLMUP") issued Letter No. 2255 LMUPC/NCLM on Additional Instruction on Management of All Types of Construction Sites in Preah Sihanouk Province ("Letter") to the Governor of Preah Sihanouk Province, being the President of the Committee of Land Management and Urban Planning of Preah Sihanouk Province.


    According to the Letter, all types of construction sites shall meet five requirements in order to ensure sustainable development, comfort, beauty and safety in Preah Sihanouk Province. Those requirements are as follows:

    • The construction sites shall be fenced at least 2 meters in height from the ground. The standing of fence shall be made of concrete of at least 80 centimetres in height to prevent soil, solid and liquid waste from flowing out onto road, side walk, beach way, beach, sea, creek, stream, lake, and public space.
    • The construction sites shall reserve 2/3 of length of sidewalk for pedestrians.
    • The construction sites shall store construction materials, machinery, construction equipment, work office, workshop and workers' accommodation within the fence surrounding the construction sites.
    • The construction sites shall manage solid and liquid waste by constructing wastewater treatment reservoir, toilet reservoir and sewer system before flowing out into public sewer system.
    • The construction sites shall maintain safety, order, hygiene, beauty, friendly environment, and good relations with neighbours and the public.

    In addition to the above instructions, the NCLMUP also attached the detail plan / drawing of such fences for the ease of the arrangement for the construction sites to comply.

    Mechanisms for Wastewater Treatment Reservoir, Toilet Reservoir and Sewer System for All Constructions in Preah Sihanouk Province

    On 18 September 2018, the President of the National Committee for Management and Development of Cambodian Beach issued Letter No. 2256 LMUPC/NCMDCB instructing and setting out mechanisms for wastewater treatment reservoir, toilet reservoir, sewer system for all constructions of residential buildings, commercial buildings, service buildings, hotels, restaurants and factories ("Letter"). These mechanisms apply to both existing buildings and new construction projects in Preah Sihanouk Province.


    In accordance with the Letter, all constructions of relevant buildings in Preah Sihanouk Province shall arrange for the necessary treatment reservoir, toilet reservoir and sewer system within their premises before connecting to the filtered wastewater of the public sewer system, which flows to the wastewater treatment station of Preah Sihanouk Province. The purpose is to ensure sustainable development, comfort, beauty, seawater quality, ocean resource, ecology, biodiversity in the beach as a member of the club of most beautiful bays in the world.


    In case of non-compliance, the President of Committee of Land Management and Urban Planning shall temporarily cease the construction or business activity until there is the arrangement of treatment reservoir, toilet reservoir and sewer system.

    Foreign Employee Quota Request and Renewal of Work Permit for Foreigners for 2019

    On 20 August 2018, the Ministry of Labour and Vocational Training issued Notification No. 028/18 ("Notification") informing enterprises which are employing foreign employees for the year 2019 to apply for foreign employees usage quota approval from 1 September 2018 to 30 November 2018.


    The same Notification also requires enterprises that currently employ foreign employees working in Cambodia to apply for the renewal of the validity of the latter’s respective work permits. The application period runs from 1 January 2019 to 31 March 2019.

    Drawing of Location Required for Transfer of Unregistered Immovable Properties

    On 16 August 2018, the Ministry of Land Management, Urban Planning and Construction issued Letter No. 1974 LMUPC to the municipal and all provincial halls around the country to take action on their respective commune or district administrations to cease all examination and certification on documents for the transfer of possessory right of unregistered immovable properties which do not attach a map showing a clear coordinate or location of such immovable properties. Such coordinates or locations must have been certified and acknowledged by the cadastral administration.


    It should be further noted that there have been conflicts arising out of transfers of possessory rights of immovable properties without proper coordinate or location of the immovable properties acknowledged or certified by the cadastral administration.

    Urging for the Completion of Establishing of Cadastral Index Map

    The Ministry of Land Management, Urban Planning and Construction issued a letter requesting for the inspection and follow up of the establishing of a cadastral index map in relevant territorial jurisdictions. It urges the cadastral offices of City and District/Khan to complete the cadastral index map in their respective jurisdictions to help ease the development, management, protection and construction in their areas, as well as support land registration.


    ID Cards or Family Books and Residential Books Cannot be used as Collaterals for Loans

    Notification No. B7-018-008 N.I dated 17 July 2018 serves as a reminder to all banks, financial institutions and rural credit operators to strictly comply with the provisions of Notification No. B7.016.210.N dated 11 March 2016 strictly prohibiting the acceptance of ID cards or family books and residential books as securities or collaterals for granting loans.


    Notification No. B7-018-008 N.I also spells out the severe sanctions or penalties for non-compliance with its provisions. It stipulates that in the event any bank, financial institution and rural credit operator continues such practice by violating this notification, the errant institution will face hefty penalties that may include the withdrawal of business license in accordance with Articles 52 and 56 of the Law on Banking and Financial Institution.

    MOC to Stop Accepting By-laws

    On 12 July 2018, the Ministry of Interior ("MOI"), being the ministry in-charge of the registration of local associations and non-governmental organisations, issued an announcement directing the Ministry of Commerce to cease accepting statutes or by-laws filed by the local associations or non-governmental organisations pursuant to the Prakas on the filing of by-laws or statutes of commercial associations ("Announcement No. 1204A"). The MOI further states that such filing violates the competence of the MOI given under the Law on Association and Non-Governmental Organization ("LANGO").


    Announcement No. 1204A further emphasises that all local associations and non-governmental organisations must be registered with the MOI by submitting an application form and the relevant supporting documents required under the LANGO.

    New Law on Minimum Wage

    On 6 July 2018, the Law on Minimum Wage ("Law") was promulgated to set the criteria and procedure for determining the minimum wage, and establish the National Council on Minimum Wage ("Council"). The Law aims to promote the livelihood of workers and increase their productivity, as well as encourage an investment-friendly environment. The Law applies to those that fall within the scope of the Labour Law.


    The Council was established to conduct studies, engage in discussion, and offer recommendations to the Ministry of Labour and Vocational Training regarding the minimum wage. Once the minimum wage is established, any verbal or written agreement within the scope of the Law that provides a wage lower than the prescribed minimum wage will be deemed void. In addition, for jobs that require the same terms, qualifications, and productivity, wages shall be provided equally to all employees that are within the scope of this Law, regardless of birth origin, age or gender.

    The Government Approves Preah Sihanouk Province Land Use Master Plan

    On 13 June 2018, the Royal Government of Cambodia issued Sub-Decree No. 81 SD.P implementing Land Use Master Plan of Preah Sihanouk Province. The Sub-Decree approves the Land Use Master Plan of Preah Sihanouk Province, which sets out the vision for the Province until 2030. The Master Plan can be revised once every five years where necessary on account of the development of the economy and society. Early revision of the Master Plan can be conducted only in case of the need for public good or national interest of Cambodia.

    The Government Approves Battambong Province Land Use Master Plan

    On 13 June 2018, the Royal Government of Cambodia issued Sub-Decree No. 80 SD.P implementing Land Use Master Plan of Battambong Province ("Sub-Decree"). The Sub-Decree approves the Land Use Master Plan of Battambong Province, which sets out the vision for the Province until 2030. The Master Plan can be revised once every five years where necessary, on account of the development of the economy and society. Early revision of the Master Plan can be conducted only in case of the need for public good or national interest of Cambodia.

    Changes to the National Social Security Fund Health Care Benefits

    On 25 April 2018, the Ministry of Labour and Vocational Training issued Prakas No. 184 to amend Articles 2, 4, 5, 6, 7, 8 and 10 of Prakas 109 dated 17 March 2016 on Health Benefits ("Prakas No. 184").

    • The new Article 2 of the Prakas adds the definition of six new terms for the sake of clarity.
    • The new Article 4 of the Prakas lists the medical services outside the scope of health diagnosis benefits.
    • The new Article 5 clarifies the coverage of essential medicines for chronic diseases.
    • The new Article 6 adds new conditions to the eligibility criteria to receive health care and diagnosis benefits and daily allowances.
    • The new Article 7 clarifies the rights and benefits that workers may have.
    • The new Article 8 clarifies the basis for calculation of the average wage for the last six months in cases of sicknesses or deliveries.

    CHINA

    A Significant Step for Enforcement of Money Judgments in Commercial Cases between Singapore and China

    On 31 August 2018, the Supreme Court of Singapore and the Supreme People's Court of the People's Republic of China ("PRC") signed a Memorandum of Guidance ("MOG") on the recognition and enforcement of money judgments in commercial cases. The MOG sets out how a judgment issued by the courts of Singapore may be recognised and enforced in the courts of the PRC and vice-versa.


    Although the MOG is not a treaty and has no binding effect, Chinese courts are expected to be "guided" by the MOG when it comes to enforcement of a Singapore judgments in China. The MOG sets out various conditions for the enforcement of Singapore judgments in China. Most importantly, the MOG stipulates that the courts of the PRC will not review the merits of a Singapore judgment and it may only be challenged on limited grounds of procedural and jurisdictional issues (unless the judgement violates public policy).

    INDONESIA

    OJK Introduces Bonds and Sukuk for Professional Investors only

    On the 1 August 2018, the Indonesian Financial Services Authority (i.e. Otoritas Jasa Keuangan, hereinafter, "OJK") issued a new regulation, "OJK Regulation No. 11/POJK.04/2018 on Bonds and Sukuk Public Offerings to Professional Investors" ("POJK No. 11/2018"). POJK No. 11/2018 introduces: (i) the definition of Professional Investor; (ii) the requirements to be considered as a Professional Investor; (iii) a new category of Bonds and Sukuk that are issued only to Professional Investors; and (iv) registration process and requirements for Professional Investors only Bonds and Sukuk which are simpler in comparison to conventional Bonds and Sukuk offerings.


    POJK No. 11/2018 defines Professional Investor as a person or entity having the capacity to purchase securities and understand the risks involved ("Professional Investor"). Generally, the key characteristic that differentiates a Professional Investor from a retail investor is its capability to conduct a risk analysis. POJK No. 11/2018 also sets certain businesses as a Professional Investor by default.


    Key differences with Conventional Bonds/Sukuk:

    • Ratings – Securities that are non-shelf registered under POJK No. 11/2018 are not required to obtain a rating.
    • Prospectus – Prospectuses under POJK No. 11/2018 are not required to include the debt statement and important financial summaries. Issuers with outstanding securities do not need an audited financial statement and a legal opinion.
    • Timeline – Simplified with only a maximum 3-business day offering period, with a 1-business day allotment date after it, and the securities to be distributed 2 business days after the allotment date.
    • Tradability – Can only be traded amongst Professional Investors
    Mandatory Recordation of Intellectual Property License Agreement

    The Indonesian Government has issued Government Regulation No. 36 of 2018 regarding the Recordation of Intellectual Property License Agreement ("GR No. 36/2018"). GR No. 36/2018 is the implementing regulation of Law No. 30 of 2000 regarding Trade Secrets, Law No. 31 of 2000 regarding Industrial Design, Law No. 32 of 2000 regarding Layout Designs of Integrated Circuits, Law No. 28 of 2014 regarding Copyright, Law No.13 of 2016 regarding Patent, and Law No. 20 of 2016 regarding Trademark and Geographical Indication.


    GR No. 36/2018, which came into effect on 27 July 2018, sets out the procedure of recordation of intellectual property ("IP") license agreement at the Directorate General of Intellectual Property ("DGIP"), including the required documents for the application for recordation. GR No. 36/2018 also contains provisions on the amendment and revocation of recordation of IP license agreement.


    Click here to read our client update.

    OJK Issues New Regulation on Takeovers of Public Companies

    The Financial Services Authority (i.e. Otoritas Jasa Keuangan, hereinafter, "OJK") has issued a new regulation governing takeovers of public companies. The regulation, OJK Regulation No. 9/POJK.04/2018 ("OJK Rule No. 9/2018"), entered into effect on 27 July 2018. It revoked Bapepam-LK Rule No. IX.H.1 on the same topic.


    Key changes introduced in OJK Rule No. 9/2018 include:

    • clarifying the documents that may prove the status of a party as indirect controller, 
    • such as:a shareholders' agreement showing that the party has more than 50% of voting rights
    • the articles of association or an agreement showing the party's authority to set the financial and operational policy of the company
    • documents or information showing the party's authority to appoint or replace the majority of the members of the company's board of directors and board of commissioners.
    • documents or information showing the party's authority to control majority votes at the board of directors and board of commissioner's meetings so that they can control the company.
    • restating the requirement that the takeover announcement must disclose the beneficial owner of a new controller.
    • stating the required information to be included in the Mandatory Tender Offer ("MTO") announcement made by the new controller, such as:
    • a statement from the new controller that it has sufficient funds to conduct the MTO, as well as information on the source(s) of the funds; and
    • a plan of development for the company.
    • permitting to conduct an MTO by a third party appointed by the new controller, to act for and on behalf of, provided that more than 50% of the share capital of such third party is controlled, whether directly or indirectly, by the new controller. The appointed party must implement all MTO procedures as stipulated in OJK Rule No. 9/2018.
    • limiting MTO exemptions for takeovers of listed companies through a Rights Issue or an increase of capital without pre-emptive rights. With respect to the Rights Issue, the exemption from conducting a MTO is only applicable if the takeover occurs as a result of the existing shareholder exercise their rights in accordance with their portion. The exemption is also applicable if the takeover occurs in the event of the issuance of new shares without pre-emptive rights in order to improve the financial condition of the company.
    The Online Single Submission: Indonesia's Latest Effort to Improve the Ease of Doing Business

    On 21 June 2018, the Government of the Republic of Indonesia issued Government Regulation No. 24 of 2018 on Electronic Integrated Business Licensing Services ("GR No. 24/2018"). GR No. 24/2018 seeks to improve the ease of doing business and increase investment in Indonesia. It also reflects the Government's direction to shift from its pre-commencing supervision system to post-commencing supervision. This is done by reducing the number of required business licenses and permits, as well as simplifying their application processes.


    One of the mandates of GR No. 24/2018 is to establish the so-called Online Single Submission ("OSS") portal, an online platform that integrates the process of applying for multiple regulatory permissions in one place. The OSS portal became operational on 9 July 2018.


    The OSS system is meant to cater to all types of private sector business, with a few exceptions stated in BKPM Regulation No.6 of 2018 on Guidelines and Procedures for Investment Licensing and Facilities ("BKPM No. 6/2018"). The new BKPM No.6/2018 revokes and replaces the previous BKPM Regulation No. 13 of 2017 on the same matter. With this new regulation, it is now clear that licenses in geothermal, mining, oil & gas and property sectors and licenses for the establishment of certain foreign company representative offices still require applicants to use the existing BKPM online system, namely the SPIPISE system.


    It was reported that the minimum equity requirement for a foreign investment company ("PT PMA") to register on the OSS system is IDR2.5 billion.


    It is hoped that the establishment of the OSS system will help further improve Indonesia’s ranking in the World's Ease of Doing Business Index. Currently, Indonesia's ranking is 72nd, a dramatic leap from 129th in 2011.


    Click here to read our client update when the OSS portal became operational.

    LAO PDR

    New Decree Offers Tax Incentives and Other Benefits to Investors in Lao SEZs

    The Government has issued the Decree on Special Economic Zones ("SEZs") No.188/GOV, dated 07 July 2018 ("Decree"), which provides tax incentives to investors in Lao Specific and Special Economic Zones.


    Based on the Decree, SEZ developers engaged in road construction, electricity and water supply and drainage systems will be awarded value-added tax ("VAT") exemption. SEZ developers engaged in other construction activities are mandated to pay 50 percent of the VAT rates as stipulated in the VAT law.


    Those investing in industries such as tourism, industrial production, services, health, education and real estate will enjoy a 16-year profit tax exemption in "zone 1" locations or the poor and remote zones with socio-economic infrastructure unfavorable to investment. They will enjoy an  8-year profit tax exemption if they invest in "zone 2" locations or zones with socio-economic infrastructure favorable to investment. After the stipulated period, they will need to pay 35% of profit tax rates as provided for in the taxation law.


    Factories that aim to produce for 100% export will enjoy VAT exception and pay 50% of VAT rates as stipulated in the laws.


    A foreigner who purchases properties in SEZs amounting to US$100,000 or more will be given a 10-year multiple-entry visa. This privilege is extended to his wife and children. The multi-entry visa may be extended.


    SEZs were established in Laos in 2002. There are currently 12 such zones. Based on the latest report from the SEZ Promotion and Management Office, there are approximately 377 domestic and overseas investors in the zones, covering an area of 19,612 hectares with a total registered capital of US$8 billion.

    New Law to Regulate Railway Development and Management

    Policy-makers have drafted a law that provides guidelines for the development and management of a railway network. This is to maximise the benefits of rail transport and drive socio-economic development.


    Under article 4 of the draft law, local and foreign companies are encouraged to invest in railway development and commercial operation in various forms, such as public-private partnerships and concessions.


    The draft law outlines the process that railway developers must undergo, including carrying out surveys and feasibility studies, and coming up with designs. They must also comply with other relevant procedures to ensure the proper development, management and commercial operation of a rail network. The draft law also offers early and reasonable compensation for people who will be relocated as a result of the development of a railway system.


    The draft law, which is being canvassed to gather public feedback, is expected to be submitted to the National Assembly for debate and approval at the end of this year.


    The Government, which currently owns just 3.5 km of the rail track that links Vientiane with Thailand's Nong Khai province, plans to develop a rail network to convert it from being a landlocked place to one that is linked within the region. The construction of a 417-km railway connecting Vientiane to the Chinese border is on track and is expecting its completion in 2021. Plans for other railways are also in the pipeline, with the aim of connecting parts of Laos to neighbouring countries.


    The Government believes that a railway network is crucial to attract foreign investment and promote production-based industries and services. Local businesses welcome this initiative, highlighting that their competitive edge is currently being undermined by the high cost of road transport. With an efficient railway network in place, they are able to lower their overhead and operating expenses.

    MALAYSIA

    RM1,050 Minimum Wage Nationwide from 1 January 2019

    The Prime Minister's Office ("PMO") has announced that, from 1 January 2019, the Malaysian Government will implement a standardised new minimum wage of RM1,050 per month or RM5.05 per hour nationwide (including Sabah and Sarawak). The decision to raise the minimum wage was made after considering the recommendations submitted by the National Wages Consultative Council (MPGN) following its review of the Minimum Wage Order 2016. Pursuant to the Minimum Wage Order 2016, the minimum wage per month in Peninsular Malaysia is RM1,000, while that in Sabah, Sarawak and the Federal Territory of Labuan is RM920.


    In its announcement, the PMO explained that the increase in the minimum wage was in line with the economic situation of the country. The PMO also pointed out it would be more appropriate to have a periodic increase – as opposed to a drastic increase – in salary so as not to jeopardise the operations of the businesses, especially the small and medium enterprise owners, which would eventually lead to retrenchment.

    Motion to Repeal the Anti-Fake News Act 2018 Rejected by Senate

    On 12 September 2018, the Dewan Negara (Upper House of Malaysian Parliament or the Senate) sitting rejected the Anti-Fake News (Abolition) Bill 2018, notwithstanding the motion was earlier passed in the Dewan Rakyat (Lower House of Malaysian Parliament or the House of Representatives) to repeal the controversial Anti-Fake News Act 2018.


    This was announced by Senate President Tan Sri S. A. Vigneswaran, after block voting saw 28 members of the Senate vote against it while 21 voted in support and three others abstained.


    The Anti-Fake News Act 2018, which was purportedly enacted to address fake news and related matters, was pushed through by the former ruling government, Barisan Nasional, and passed in Parliament on 2 April 2018 despite protests from then opposition lawmakers.


    The current government, Pakatan Harapan, in its election manifesto promised to repeal the Act. According to the Pakatan Harapan Government, fake news may be dealt with under existing laws such as the Penal Code, the Printing Presses and Publications Act 1984, and the Communications and Multimedia Act 1998.

    Sales and Services Tax Replaces Goods and Services Tax with Effect from 1 September 2018

    From 1 September 2018, the Sales and Services Tax ("SST") has replaced the Goods and Services Tax ("GST"). The SST was reintroduced after the Malaysian Government repealed the GST in early August.


    The SST is a single-stage tax, where the sales ad valorem tax is charged upon taxable goods manufactured and sold by a taxable person in Malaysia, as well as upon taxable goods imported into Malaysia. Service tax is charged on taxable services provided in Malaysia and not on imported or exported services.


    A taxable person is one that manufactures taxable goods or provides taxable services with an annual turnover exceeding MYR500,000. A taxable person is also a person who provides taxable services (e.g. hotel, insurance, club, gaming, telecommunication, legal, accounting, architectural, security, etc) in the course of its business in Malaysia and is liable to be registered or is registered under the Service Tax Act 2018.


    A tax of between 5% and 10% is imposed on the sale of goods. The service tax is set at 6%. The GST, which covered a broader range of items and services compared with the SST, was set at 6 per cent.


    A total of 5,443 consumer items have been exempted from the new sales tax. This is 10 times the number of exempted goods under the GST. Among the exempted goods are live animals, unprocessed food, vegetables, medicines, machinery and chemicals.

    Public Consultation Paper No. 1/2018 on the Implementation of Data Breach Notification

    In August 2018, the Personal Data Protection Commissioner published the Public Consultation Paper No. 1/2018 entitled "The Implementation of Data Breach Notification" (the "Public Consultation Paper") which, upon coming into force, would be applicable to organisations that are required to register under the Personal Data Protection Act 2010 ("PDPA") and those that process personal data or have control over or authorise the processing of any personal data (i.e. registered data users under the PDPA).


    Pursuant to the Public Consultation Paper, the Commissioner intends to implement a data breach notification mechanism in Malaysia, where data users are required to notify and inform the relevant authorities and affected parties when a data breach has occurred within the organisation. Organisations will be required to report on:

    • the details about the data breach (e.g. summary of event and circumstances, estimated number of affected data subjects);
    • the containment and control measures by the data user;
    • the details and requirements with regards to the notification; and
    • the details on the organisations' training and guidance in relation to data protection prior to the data breach incident.

    The period for submissions has since passed. It is likely that a data breach notification regime will be rolled out within the next 6 to 12 months.

    MYANMAR

    Prohibition of Multi-Level Marketing-Ministry of Commerce Notification 48/2018

    Multi-Level Marketing ("MLM") has often been viewed as an unethical way of conducting business because it enriches  the higher up distributers in a pyramid-selling scheme at the expense of those at the lower levels, who are mostly people from the lower-income bracket.


    Myanmar has long been in need of a law which prohibits this practice. Under the recent Notification 48/2018 issued by the Ministry of Commerce ("MOC") on 18 September 2018, MOC has deemed MLM as an 'Essential Service' pursuant to Section 4(c) of the Essential Goods and Services Act 2012 and has subsequently banned the practice of MLM. Any person found guilty of practicing MLM shall be liable for 6 months to 3 years of prison time and/or a fine under the Essential Goods and Services Act 2012.

    Streamlined and More Transparent Corporate Compliance Processes under the Companies (Electronic Registry System and Miscellaneous Matters) Regulations 2018

    A new online registry system called Myanmar Companies Online ("MyCO") has been launched with the coming into force of the new Myanmar Companies Law 2017 ("MCL") on 1 August 2018. This is aimed at streamlining company filings and making corporate compliance processes more transparent.


    Re-registration


    The implementing regulations of MCL, the Companies (Electronic Registry System and Miscellaneous Matters) Regulations 2018, mandate existing companies and entities to re-register via MyCO from 1 August 2018 to 31 January 2019. To re-register, companies can now submit a single document, called "constitution", instead of submitting two documents – Memorandum of Association and Articles of Association ("M&AOA") – as previously required. Existing M&AOAs which are not replaced with a constitution will effectively be converted into one. A template constitution is available at the Directorate of Investment and Company Administration ("DICA") website for companies that do not need a uniquely drafted constitution.


    Online re-registration is free of charge. A company may also opt to re-register with the DICA office by submitting a complete set of hardcopies of its constitution and paying a filing fee of MMK50,000. A company that fails to re-register within the stipulated registration window will only be restored after payment of a prescribed penalty.


    Formation or Incorporation


    The documentary requirements under the MCL for the formation or incorporation of companies will be less onerous than those under the previous procedures. One of the key benefits of the MCL is that a permit to trade is no longer required, and private limited companies are allowed to be set up with a single member or shareholder.


    Foreign investors may invest up to 35% in a Myanmar public or private company. If foreign ownership in a Myanmar-incorporated company is more than 35%, the entity is considered a foreign company under the MCL which must comply with the relevant provisions of the law.


    Corporate compliance filing


    Ongoing compliance requirements such as annual filings, secretarial filings (e.g. appointments of directors, change of registered office, principal place of business and shareholdings) have been made much easier, by filling a “notice” to the Registrar via MyCO using the standard forms.

    Issue of the Arbitration Rules under Notification 643/2018 by the Supreme Court of the Union

    Pursuant to Section 57 of the Arbitration Law 2016 ("ABL"), the Supreme Court of the Union has issued the Arbitration Rules ("ABR") on 31 July 2018. ABR will serve as a by-law to the ABL. It has provided clarity on the appointment of Arbitrators for both International and Domestic Arbitration.


    It further sets out attributes that Arbitrators must have in order for disputing parties to appoint them as Arbitrators. In addition, the ABR has provided the regulations in assigning jurisdiction for relevant courts to confirm interim decisions and decision of the Arbitration Tribunals, and manage appeals.


    ABR also sets out provisions and procedures for the enforcement of both Domestic and International Arbitral Awards pursuant to the ABL.

    Issue of Ministry of Commerce Newsletters 2/2018 and 3/2018

    The Ministry of Commerce ("MOC") has issued two Newsletters following the issue of MOC Notification 25/2018 in relation to the Liberalization of Wholesale/Retail by foreign and joint venture companies.


    Newsletter no. 2/2018 was issued on 26 July 2018. It sets out the Standard Operating Procedures regarding the implication of the notification and application for Wholesale/Retail Registration Certificate at the MOC. In addition to the procedures, provisions and details for application, the Newsletter also includes the categorisation of the different types of companies for registration in relation to post- or pre-incorporation.


    Newsletter no.3/2018 was issued on 26 July 2018. It sets out a "priority list" of 24 categories of goods which investors would be allowed to trade with a Wholesale/Retail Registration Certificate. This list, however, is not exhaustive and subject to be changed from time to time depending on the requirements of Myanmar. This means more categories of goods may be added.

    PHILIPPINES

    House of Representatives Approves TRABAHO Bill

    The House of Representatives on 10 September 2018 approved on third and final reading House Bill No. 8083, otherwise known as the Tax Reform for Attracting Better and Higher Quality Opportunities ("TRABAHO") Bill. The TRABAHO Bill aims to lower corporate income taxes ("CIT") so as to attract foreign investment into the country.


    Legislators gave their final nod to the bill just six (6) days after it was approved on second reading.  Voting 187-14-3, only fourteen (14) lawmakers voted against the TRABAHO Bill.


    From the current base rate of 30%, the TRABAHO Bill seeks to gradually lower the corporate income tax to 20% by 2029, or 2% per year beginning 2021.


    The current CIT rate of 30 % is one of the highest in Southeast Asia and is perceived as preventing the country from attracting foreign investment.


    House of Representative Ways and Means Committee Chairman Dakila Cua, the sponsor of the TRABAHO Bill, said it also aims to modernise the country's tax incentives regime to ensure it is "targeted, time-bound, and effective." It seeks to grant income incentives for a maximum of five years, except in projects located in lagging areas and areas recovering from armed conflict or major disasters, projects in agri-business outside major urban areas, or projects relocated from major urban areas. These exceptions may enjoy an additional two years of incentives.


    The TRABAHO Bill must now be approved by the Senate and later on by a bicameral conference committee before it can be forwarded to the President for his signature and becomes a law.

    House of Representatives Approves 100-day Paid Maternity Leave Bill

    The House of Representatives on 4 September 2018 approved on third reading House Bill No. 4113, otherwise known as the 100-Day Maternity Leave Law ("House Bill 4113"). House Bill 4113 increases the paid maternity period to 100 days for female workers in the public and private sectors. Currently, women who give birth through normal delivery are allowed to take 60 days of maternity leave, while those who deliver by caesarean section are given 78 days of maternity leave.


    House Bill 4113 also grants mothers an option to extend their maternity leave for an additional 30-days without pay. It also provides that Social Security System members who have paid at least three monthly contributions in the 12-month period prior to the semester of their childbirth or miscarriage shall be paid their daily maternity benefit.


    House Bill 4113 now needs to be reconciled with the Senate version of the bill (which was approved on third and final reading last year) through a bicameral conference before it can be signed into law by President Rodrigo Duterte.  This is because the Senate version of House Bill 4113 proposes a longer paid maternity leave of 120 days and also proposes a 30-day paid leave for fathers, as opposed to House Bill 4113 which does not increase the current 7-day paid leave for fathers.

    Islamic Banking Bill Hurdles House Panel

    The House of Representatives Committee on Banks and Financial Intermediaries ("Committee") on 14 August 2018 approved an unnumbered substitute bill, Islamic Banking Bill ("Bill"), seeking to expand the Islamic banking system in the Philippines for greater financial inclusion.


    The Committee Chairman, Rep. Ben Evardone of Eastern Samar, said the Bill's passage would complement the Bangsamoro Organic Law, a law providing for the establishment of an autonomous political entity known as the Bangsamoro Autonomous Region, replacing the Autonomous Region in Muslim Mindanao ("ARMM").  The Bangsamoro Organic Law was ratified by both the Senate and the House of Representatives on 23 July and 24 July 2018, respectively, and was signed into law by President Rodrigo Duterte on 26 July 2018. 


    The Bill defines "Islamic banking business" as a banking business whose objectives and operations do not involve interest (riba) which is prohibited by the Shari'ah, and which conducts its business transactions in accordance with Shariáh principles.


    Under the Bill, the Monetary Board of the Bangko Sentral ng Pilipinas ("BSP"), the central bank of the Philippines, may authorise the establishment of Islamic banks. It may also authorise conventional banks to engage in Islamic banking arrangements through a designated Islamic banking unit within the banks.


    It provides that foreign Islamic banks may be authorised to carry out banking operations in the Philippines under any of the modes of entry provided under Republic Act No. 7721 or "An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines and for Other Purposes".


    The BSP shall have supervision and regulatory powers over the operations of Islamic banks, which shall be licensed and regulated in the same manner as universal banks.

    Passage of Unified Health Care Bill to Improve Health Service Delivery in the Philippines

    The Department of Health ("DOH") recently stated that the passage of the Universal Health Care Bill ("UHC Bill") would "correct the inefficiencies in the current health system as it will empower community health units in the provision of quality health care to every Filipino".


    The UHC Bill provides for the automatic inclusion of all Filipinos in the National Health Insurance Program of the Philippine Health Insurance Corporation ("PhilHealth"), a government-owned and controlled corporation ("GOCC") attached to the DOH created to implement universal health coverage in the Philippines.  This will benefit many impoverished Filipinos as the funding will ensure full coverage of cost for medical package and basic amenities.


    According to Health Secretary Francisco Duque III, the UHC Bill aims to address the disorganisation in the delivery of health care services under the current system, as there will be designated primary care providers for all Filipinos who shall act as gatekeepers and coordinators of care. The current practice is that people with the simplest health issues go to hospitals when such illnesses can be attended to at the barangay / community health stations which are delivery units closest to the communities. In this regard, a National Health Workforce Support System will be established to ensure continuous supply and deployment of human resources particularly to undeserved areas.


    There will be a Health Technology Assessment Council to determine the safety and feasibility of investments for health care. It is hoped that this will avoid healthcare issues similar to the Dengvaxia controversy, where several children who were administered with a dengue vaccine died allegedly from complications attributed to the vaccine.


    While the House of Representatives has passed its version of the bill, the counterpart measure in the Senate is still pending in the committee level. The two bills would have to be reconciled and approved by a bicameral committee before it is submitted to the President for his signature to become a law.

    SINGAPORE

    Report of the Select Committee on Deliberate Online Falsehoods

    The Select Committee on Deliberate Online Falsehoods has released a 176-page report containing recommendations to tackle deliberate online falsehoods, and the guiding principles behind its proposals.


    The Government has accepted in-principle the Select Committee's recommendation for a multi-pronged response to tackle the challenges and risks posed by deliberate online falsehoods and will study the Committee's report closely and work with stakeholders to roll out the non-legislative and legislative measures recommended by the Committee over the next few months.


    These measures will be geared towards: (i) nurturing an informed public; (ii) reinforcing social cohesion and trust; (iii) promoting fact-checking; (iv) disrupting online falsehoods; and (v) dealing with threats to national security and sovereignty.


    Click here for more details.

    Guidelines on the Use, Collection and Disclosure of NRIC Numbers in Singapore

    On 31 August 2018, the Personal Data Protection Commission issued the finalised Advisory Guidelines on the Personal Data Protection Act for NRIC and other National Identification Numbers ("Guidelines").  These finalised Guidelines take into account feedback received during a public consultation in November 2017, where feedback was sought on the collection, use and disclosure of NRIC numbers (or copies of NRIC) and retention of physical NRICs by organisations.


    The Guidelines set out the circumstances in which organisations will be permitted to collect, use and disclose NRIC numbers (or copies of NRICs).  It also provides guidance on what alternative identifiers that organisations can adopt when implementing identifiers in new systems and replacing the NRIC number with new identifiers in existing systems.


    The Guidelines will come into effect on 1 September 2019.


    Click here to read our client update.

    Mareva Injunctions in Aid of Foreign Court Proceedings

    In China Medical Technologies, Inc (in liquidation) and another v Wu Xiaodong and another [2018] SGHC 178, the Singapore High Court considered the court's power to grant a Mareva injunction in aid of foreign proceedings. The Court also laid out the threshold requirements for when the Court's power to grant such an injunction would arise, and the factors to be considered in deciding whether to grant the injunction.


    Click here to read our client update.

    MAS Issues Revised Code of Corporate Governance

    On 6 August 2018, the Corporate Governance Council ("Council") submitted its final recommendations on revisions to the Code of Corporate Governance ("Code") to the Monetary Authority of Singapore ("MAS"). The recommendations took into account feedback received after a public consultation in January 2018.


    MAS has accepted all the Council's recommendations and has issued the revised Code. Singapore Exchange has also reviewed the Council's recommendations and has made amendments to the Listing Rules.


    The revised Code will take effect for companies in respect of annual reports relating to financial years commencing 1 January 2019 onwards.  The revised Listing Rules will also take effect on 1 January 2019 except for revisions relating to the nine-year tenure for independent directors and the requirement for independent directors to comprise at least one-third of the board, which will take effect on 1 January 2022.


    Click here to read our client update.

    THAILAND

    Proposed Amendments to the Labour Protection Act

    On 20 September 2018, the National Legislative Assembly ("NLA") admitted for consideration the draft Labour Protection Act amendment. The responsible sub-committee has also been appointed by the NLA on the same day.  The following are a sample of the key amendments proposed under the draft amendment.

    • Employees are entitled to business leave up to 3 days with wages paid, which is not available under the existing laws.
    • A period of statutory maternity leave is extended from 90 days to 98 days, and such leave may be taken before the delivery.
    • Maximum rate of statutory severance pay is increased from 300 days' wages (for continuous employment exceeding 10 years) to 400 days' wages (for continuous employment exceeding 20 years).
    • Employee's consent must be obtained in case of the change to corporate employer as a result of merger, acquisition, or transfer of ownership. The new employer must accept all rights and obligations of the previous employer in relation to the employee upon such change.
    Proposed Amendment of the Civil Procedure Code

    The Cabinet approved in principle a proposed amendment to the draft Civil Procedure Code on 11 September 2018. The draft amendment allows two parties to apply for the appointment of a negotiator to facilitate a settlement of their dispute, before a civil case is initiated and brought to the court.


    The parties would also be entitled to request the Court to render a judgement if the settlement can be reached during the negotiation process. This process is not available under existing laws and is expected to help reduce the number of cases in Court in the future.

    Update on Developments in Implementing the Trade Competition Act

    On 4 September 2018, the Cabinet approved 7 individuals to sit as Commissioners of the Trade Competition Commission, namely:

    1. Mr. Sutham Yoonaitham;
    2. Mr. Krissada Piampongsan;
    3. Mr. Somchart Soithong;
    4. Mrs. Aramsri Rupan;
    5. Mr. Wissanu Wongsinsirikul;
    6. Mr. Santichai Santawanpat; and
    7. Mr. Somkiat Tankittiwat.

    However, as reported in the Government Gazette on 1 October 2018, a new Commission will need to be appointed in replacement of Mr. Sutham Yoonaitham, who has been appointed a commissioner of the Energy Regulatory Commission. Applications will be open for the new position from 4 October to 5 November 2018.


    The process of considering draft subordinate laws, which are needed to implement the Trade Competition Act B.E. 2560 (2017) which took effect in October 2017, continues. On 27 August 2018, Thailand's Office of Trade Competition Commission ("OTCC") published six new draft notifications as follows:

    1. Draft Notification of Trade Competition Commission re: Criteria on Being a Business Operator with Market Dominance B.E. 2561;
    2. Draft Notification of Trade Competition Commission re: Criteria, Procedures and Conditions for Notification of the Outcome of a Merger B.E. 2561;
    3. Draft Notification of Trade Competition Commission re: Criteria, Procedures and Conditions for Request for Permission and Permission to Conduct a Merger B.E. 2561;
    4. Draft Notification of Trade Competition Commission re: Criteria for Considering the Acquisition of the Assets or Shares in order to Control Policy, Business Administration, Direction or Management that is a Merger B.E. 2561;
    5. Draft Notification of Trade Competition Commission on Criteria on Collecting or Bringing Goods as a Sample B.E. 2561; and
    6. Draft Notification of Trade Competition Commission re: Criteria, Procedures, Conditions, Processes and Guidelines for Consideration of the Amount of Settlement Fine B.E.

    The six drafts were available (in Thai) at http://otcc.dit.go.th/?page_id=5691 and open for comments by interested persons during the period from 27 August to 25 September 2018. The draft notifications may be further revised before they are approved and issued.

    The New Anti-Corruption Act

    The Act Supplementing the Constitution Relating to the Prevention and Suppression of Corruption B.E. 2561 (2018) ("New Anti-Corruption Act") was published in the Government Gazette on 21 July 2018 and came into force on 22 July 2018.  The New Anti-Corruption Act repeals and replaces the Organic Act on Anti-Corruption B.E. 2542 (1999) ("Previous Act"), as amended, effectively reiterating the provisions of the Previous Act and making the scope of power of the National Anti-Corruption Commission ("NACC") clearer.


    Several key changes are summarised below:

    • Section 176 of the New Anti-Corruption Act now clearly states that liability under this Act would extend to a juristic person incorporated under foreign law conducting business in Thailand, whereas the Previous Act was silent on this issue.
    • The provisions on cooperation with foreign countries are more explicit in the New Anti-Corruption Act, which is intended to promote consistentcy with the United Nations Convention against Corruption. Under the New Anti-Corruption Act, the NACC is designated as the center for international cooperation against corruption according to international obligations and agreements on anti-corruption and the NACC may take action in response to a request for assistance from a foreign country regarding corruption matters. The request submitted to the NACC does not need to be made under the law on mutual legal assistance in criminal matters.
    • Where a foreign official, an international organisation official or any related person commits an offence under Sections 173 to 176 of the New Anti-Corruption Act, the NACC may consider forwarding such matter to the foreign authority to proceed with the case in accordance with the law of that country.
    • Where there is a request for assistance from foreign countries under the laws on mutual legal assistance in criminal matters to proceed the case against the foreign officials, international organisation officials or any persons who have committed an offence under Sections 173 to 177 of the New Anti-Corruption Act, the NACC has the power and authority to investigate, consider the matter and take any actions as requested. 

    Other key provisions of the Previous Act continue to have effect, namely:

    • The New Anti-Corruption Act repeats the language prohibiting a Government Official from accepting property or other benefit, except for a property or benefit eligible in accordance with the law, rule or regulation issued by virtue of the provision of law, unless it is an acceptance of property or other benefit on a customary basis according to the regulation prescribed by the NACC.  At present, the NACC Regulations issued under the Previous Act continue to apply.
    • The New Anti-Corruption Act also provides that, where an alleged offender or a defendant escapes during the prosecution or Court trial, the duration of time during which the alleged offender or defendant escaped should not be counted as part of the limitation period.
    • Where a person committing a bribery offence is a person related to a juristic person and commits such act for the benefit of such juristic person, such juristic person will also be liable unless the juristic person can prove that it maintains a proper internal control measure to prevent such act.

    VIETNAM

    New Decree Relating to Enterprise Registration

    On 23 August 2018, the Government promulgated Decree No. 108/2018/ND-CP ("Decree 108") amending and supplementing some articles of the Decree No. 78/2015/ND-CP relating to enterprise registration. Decree 108 took effect from 10 October 2018.


    The amendments relate to the processes and formalities for enterprise registration, notifications, disclosures, and the setting up of business locations.

    New Regulation on Vietnam Standard Industrial Classification

    On 6 July 2018, the Prime Minister of Vietnam promulgated Decision No. 27/2018/QD-TTg ("Decision No. 27") on Vietnam Standard Industrial Classification to replace, amend and supplement Decision No. 10/2007/QD-TTg dated 23 January 2007 and Decision No. 337/QD-BKH dated 10 April 2007. Decision No. 27 took effect from 20 August 2018.


    Some of the notable amendments in Decision No. 27 include the following:

    • A number of new sectors in level 4 and level 5 of classification have been supplemented.
    • Decision No. 27 provides further guidance and clear explanation on economic activities which are categorised in each sector.
    • Decision No. 27 also provides concepts and definitions pertaining to economic activities and economic sectors.




    Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
    rtial("asiaFooter"); } rtial("asiaFooter"); } rtial("asiaFooter"); } v> v>