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ARBITRATION ASIA

Regional Round-Up

Your Snapshot of Key Legal Developments in Asia

Issue 1 - Jan/Feb/Mar 2018

COVER STORY

    CAMBODIA
    CHINA
    INDONESIA
    LAO PDR
    MALAYSIA
    MYANMAR
    PHILIPPINES
    SINGAPORE
    THAILAND
    VIETNAM

    CAMBODIA

    Lèse Majesté in Effect
    On 27 February 2018, the Amendment to the Cambodian Criminal Code was passed with the inclusion of a new criminal act – the act of insult (in verbal, physical, written, drawing, or object form) to Majesty the King – to the existing Article 437. The new article imposes criminal liability on both physical persons and legal entities.

    The punishment for violation by physical persons includes a 1- to 5-year imprisonment and a fine of up to KHR 10,000,000 (approx. US$2,500). The punishment for violation by legal entities include a fine of up to KHR 50,000,000 (approx. US$12,500), together with one or more additional penalties including its dissolution, placement under the court surveillance, prohibition from carrying on certain activities, closure, seizure of its property in connection with the crime, and broadcasting the sentencing decisions in print media and audio-visual communication forms. This Amendment came into effect immediately after it was passed.
    New Public Holiday on the 20th of May
    On 21 February 2018, the Ministry of Labour and Vocational Training issued Prakas No.084/18 on Public Holiday on National Day of Remembrance ("Prakas 084/18"). Prakas 084/18 establishes a new public holiday on the 20th of May every year, allowing all employees of all enterprises or establishments as prescribed under Article 1 of the Labour Law to have one day of paid public holiday. Should any public holiday fall on Sunday, the employees shall be given one extra day off on the following day.

    Strengthening Inspection on the Use of Foreign Labour in Cambodia
    On 19 February 2018, the Ministry of Interior and the Ministry of Labour and Vocational Training issued Inter-Ministerial Prakas No.719 on Strengthening of Labour Inspection on the Use of Foreign Labour in Cambodia ("Prakas 719"). Prakas 719 aims to regulate inspection works related to the use of foreign labour.

    According to Prakas 719, the Foreign Labour Mixed Inspection Group has jurisdiction to inspect the use of foreign labour in enterprises, establishments, casinos, and entertainment clubs, and foreigners who come to invest or work in Cambodia. Moreover, foreign owners, directors, investors, and workers are mandated to cooperate in providing necessary documents.
    Market Interest Rates for Fiscal Year 2017
    On 15 February 2018, the General Department of Taxation ("GDT") released Notification No. 2126, which provides for the "market rates" for determining the caps on interest rate deductions for borrowings in Khmer Riel ("KHR") and United States Dollar ("USD') for financial year 2017.

    Thus, any interest expense related to respective borrowings in KHR and USD which exceeds the market interest for financial year 2017 shall be a non-deductible expense for 2017 Tax on Income calculation after the adjustment of the allowed interest rate pursuant to paragraph 3 of GDT's Instruction No. 151 dated 22 January 2014.
    Reclassification of Taxpayers in Cambodia
    The Ministry of Economy and Finance has issued Prakas No.025 on the Reclassification of Taxpayers under the Self-Assessment Regime (or the Real Regime of Taxpayers) dated 24 January 2018 ("Prakas 025").

    Prakas 025 aims to replace the classifications of taxpayers defined in the previous Prakas No.1819 on the Classification of Taxpayers under the Self-Assessment Regime (or the Real Regime of Taxpayers) dated 25 December 2015. It sets out new criteria for the classification of taxpayers between the small, medium and large categories.
    Implementation of Tax on Salary Changes
    With reference to the 2018 Law on Financial Management on changes to the monthly Tax on Salary ("TOS") bands, the Ministry of Economy and Finance issued Instruction No.002 dated 15 January 2018 ("Instruction 002") providing a summary and working examples of how these changes will be implemented.

    Pursuant to Instruction 002, commencing on 1 January 2018, all resident enterprises including government institutions, organisations and other enterprises have an obligation to withhold and pay the TOS for resident employees at the designated rates.
    The Management of Community-based Kindergartens
    On 29 December 2017, the Royal Government of Cambodia issued Sub-Decree No.245 on Management of Community-based Kindergarten ("Sub-Decree 245") with the aim of setting out the management of community-based kindergartens at commune, Sangkat administration with quality, effectiveness, and sustainability.

    Children from the age of three to six years are to be provided with opportunities to receive equal and inclusive education services with this management in place. The management includes, but is not limited to, the creation and the closing of community-based kindergartens,  and the annexation of such kindergartens to any public institution. It also includes the mechanisms, procedures, and conditions that must be set out by the Ministry of Education, Youth and Sport ("MOEYS") in recruiting new teachers. Sub-Decree 245 also seeks to set community-based kindergarten development programs as the priority of MOEYS.
    Digital Signature Regulated
    On 29 December 2017, the Royal Government of Cambodia issued Sub-Decree No.246 on Digital Signature ("Sub-Decree 246"). Sub-Decree 246 intends to rule and enforce the usage of digital signature in all transactions within the Kingdom of Cambodia in a highly secured and efficient way.

    Sub-Decree 246 seeks to delegate to the private sector the governing works in relation to digital signature, such as designing the mechanism of electronic signature, and the issuance of the digital signature certificate to the digital signature users. The private persons who obtain the license from the Ministry of Posts and Telecommunications of Cambodia ("    MPTC") shall become the Certifying Authorities. Any electronic mail with a digital signature certified by a Certifying Authority shall have the same legal effect as a written letter. For all online transactions, there shall be the practice of attaching a digital signature in accordance with Sub-Decree 246, unless provided otherwise.

    MPTC is authorised to monitor the use of digital signature, and to issue the digital signature certificate to the ministries, institutions, national and sub-national authorities. The General Department of Information and Communication Technologies assists the MPTC with the management and issuance of licenses on Digital Signature Certification ("Licenses") to the Certifying Authorities, as well as the supervision and surveillance over such Licenses.
    Registration of Debt Securities
    On 27 December 2017, the Securities and Exchange Commission of Cambodia ("SECC") issued Prakas No.016/17 on the Implementation of Listing Rules of Debt Securities ("Prakas 016/17") to implement the rules related to listing of bonds in the Cambodia Securities Exchange ("CSX").

    Prakas 016/17 sets out conditions and procedures for the listing of debt securities. Any person intending to issue debt securities shall first apply to have his / its credit rating examined, by submitting necessary corporate and securities documents like certified credit rating reports, or profitability and cash flow ratio reports. The SECC will decide and notify the applicant of its decision within 10 working days.

    In addition, after debt securities are issued to the subscribers, the applicant for the listing of debt securities shall apply to officially register the debt securities with the SECC within seven working days.

    According to the Prakas, the registered debt securities may be de-registered on various grounds, including: (i) the applicant's violation of SECC's conditions for listing of debt securities; (ii) failure to submit annual reports after each fiscal year to the SECC; (iii) decline of credit rating; and (iv) the amount of listed debt securities has fallen below KHR 500,000,000 (US$12,500).
    Reduction of Fees on Derivatives Trading Operation for 2018
    On 26 December 2017, the Securities and Exchange Commission of Cambodia ("SECC") issued Prakas No.015/17 on Fee Reduction for Derivatives Trading Operation for 2018 ("Prakas 015/17") to determine the fee on derivative trading operations for 2018 in accordance with the Law on the Issuance and Trading of Non-Government Securities.

    According to Prakas 015/17, the fee on derivatives trading operation that the derivative brokers must pay to the SECC at a rate of 0.3% of the principle investment amount has now been reduced to KHR 4000 or US$1 per trading unit (Lot) for 2018.
    Authorisation Required for Branches of Central Counterparty Companies and Derivative Brokers
    On 26 December 2017, the Securities and Exchange Commission of Cambodia ("SECC") issued Prakas No.014/17 on the opening of branches of central counterparty companies and derivative brokers ("Prakas 014/17"), to set out conditions and procedures for the authorisation to open such branches.

    Any company intending to open a branch of central counterparty company and derivative broker must submit the required application form and attachments to the SECC.

    The company shall ensure that its branch of central counterparty company or derivative broker conducts such business separately from its other businesses, by having an information system equipment, a separate human resources department, and appropriate information barriers in the branch.

    The authorisation to open a branch is valid for one year. Any request to extend the validity of the authorisation must be made at least 30 days prior to its expiry date.
    Double Taxation Agreements Signed
    On 9 December 2017, four Double Taxation Agreements ("DTAs") were ratified by Royal Krams. The DTAs aim to clarity how an income derived in one state by a resident of the other state is taxed. It also aims to reduce the possibility that a specific income could be subject to double taxation.

    The four DTAs were bilateral agreements between Cambodia and Brunei, China, Singapore, and Thailand. So far, only the DTAs with Singapore and Thailand have entered into force.

    It is worth noting that in the absence of any procedures, DTAs come into operation only when the General Department of Taxation formally announces the enforcement of specific DTAs. According to the GDT Announcements, Cambodia's DTAs with Singapore and Thailand are fully enforceable and are applicable from 1 January 2018.

    CHINA

    Foreign-funded Enterprise Registration to be Streamlined
    China will streamline its foreign business registration by implementing the "One Window, One Form" (单一窗口、单一表格) policy, according to the notice jointly released by the Ministry of Commerce of the PRC ("MOFCOM") and the Sate Administration for Industry and Commerce ("SAIC") on 28 February 2018. This new policy is expected to be implemented from 30 June 2018 on a nationwide basis.

    Currently, foreign-funded enterprises have to prepare two sets of documents and go through procedures with MOFCOM and SAIC separately for registration and filing, and some of the filing items are duplicate. Under the reform of cutting through the red tape in China, the foreign enterprises investing into industries which are not subject to special administrative measures are able to submit "one form" to one single government department for registration after 30 June 2018. At the same time, the data exchange and information sharing between different government authorities will be strengthened.  "One Window, One Form" policy streamlines the registration process and reduces enterprises' time costs, but foreign-funded enterprise should also be aware that the strengthened data exchange and information sharing between different government bureaus also demands the enterprises’ more care with regulatory compliance.

    INDONESIA

    Supreme Court and Ministry of Foreign Affairs sign MoU Giving Additional Guidance on Judicial Assistance in Overseas Civil Matters
    On 20 February 2018, the Supreme Court of Indonesia and the Ministry of Foreign Affairs (Kementerian Luar Negeri / "MoFA") signed Memorandum of Understanding No. PRJ/HI/102/02/2018/01, No. 01/NK/MA/2/2018 (the "MoU") which renews the prior MoU concerning Judicial Assistance in Civil Matters dated 19 February 2013. The renewal of such MoU is important due to the increasing number of requests from Indonesian courts to send court documents in civil matters (i.e, court summons, notice of decision) to foreign courts and vice versa. The important points to take note of include:
    • Supreme Court Document Verification – Given that a recipient country may have its own requirements for judicial assistance in civil matters, the Supreme Court Registrar must first examine and verify the documents from the Court of First Instance before forwarding them to MoFA. In some recipient countries, failure to translate the documents would cause the documents to be denied and returned to the requesting country.
    • Time Limit – Prior to the new MoU, it took two to three months to summon a party domiciled abroad. It was also difficult for the parties to know the status of the request. The new MoU and the Cooperation Agreement between the Supreme Court and MoFA is silent as to the time frame within which judicial assistance in overseas civil matters are carried out. Despite this, parties may refer to MoFA's Rogatory Online Monitoring website ("Rom Website") to track the process of court summons or document requests.
    • Fees – The previous practice was for the disputing parties to pay only the fees incurred in sending documents from the court to MoFA. The new MoU now requires the disputing parties to pay all fees needed to process the document, i.e. fees to be incurred from sending letters to overseas parties, to transmitting the documents from overseas to the Indonesian court.
    Click here to read our client update.
    Alternative Methods to Calculate Gross Turnover in the Tax Audit
    The Minister of Finance ("MoF") issued new guidelines for the calculation of gross turnover during a tax audit, under MoF Regulation No. 15/PMK.03/2018 ("Reg 15/2018"), dated 13 February 2018, concerning Alternative Methods to Calculate Gross Turnover. This is an implementing regulation to Article 14, paragraph (5) of Law No. 7 of 1983, as last amended by Law No. 36 of 2008 regarding Income Tax (“Article 14, paragraph (5), Income Tax Law”).

    Article 14, paragraph (5), Income Tax Law and its elucidation provide that when a taxpayer's real gross income and net income cannot be accurately calculated due to his failure to meet his legal obligations to keep these records ("    pencatatan") or accounting books ("pembukuan"), or his failure to present them to an auditor with sufficient supporting evidence, the auditors will calculate his net income ("penghasilan neto") using the Deemed Profit Norm, and the Gross Turnover ("peredaran bruto") on other bases to be set out under MoF Regulations to be issued in due course. Reg 15/2018 introduces alternative methods to calculate a taxpayer's gross turnover during a tax audit. These methods include:
    • Cash and non-cash transactions: The tax auditor will calculate the gross turnover under this method based on the available data and / or information of cash and non-cash transaction within a tax year.
    • Sources and uses of funds: The gross turnover is calculated based on available data and/or information in a tax year related to the sources and / or uses of funds.
    • Units and / or volume: The gross turnover is calculated based on available data and / or information related to the total units and/or volume of business produced in a tax year.
    Click here to read our client update.
    New Regulation to Streamline Procedural Requirements for Investment Companies
    The Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal or "BKPM") recently updated its regulations to streamline procedural and licensing requirements for investment companies. Regulation No. 13 of 2017 on Guidelines and Procedures for Investment Facilities and Licensing ("Regulation 13") came into operation on 2 January 2018 for BKPM, and will take effect on 2 July 2018 for regional investment coordinating bodies. The new guidelines are relevant to all current foreign and domestic investors and investment companies, as well as prospective investors interested in pursuing Indonesian interests.

    Regulation 13 repealed and replaced various Regulations which were perceived to be cumbersome and disorganised. It also introduced new provisions that clarify existing uncertainty in the market.

    Click here to read our client update.
    MEMR Issues Four Revoking Regulations to Ease Regulatory Burdens on Businesses
    The Ministry of Energy and Mineral Resources ("MEMR") recently issued four revoking regulations in the energy and mineral resources sector.  The four revoking regulations are:
    • MEMR Regulation No. 6 of 2018 on the revocation of regulations in the oil and gas sector (which revokes 11 regulations)
    • MEMR Regulation No. 7 of 2018 on the revocation of regulations in the electricity sector (which revokes 4 regulations);
    • MEMR Regulation No. 8 of 2018 on the revocation of regulations in the minerals and coal sector (which revokes 7 regulations); and
    • MEMR Regulation No. 9 of 2018 on the revocation of regulations in the new and renewable energy, and energy conservation sectors (which revokes 5 regulations).
    The objective of the revocation is to increase the investment opportunity and stimulate economic growth by, among others, simplifying the licensing process of businesses. This is part of the Government’s deregulation program in energy and mineral resources sector to create more competition within the industry.

    LAO PDR

    Industry and Commerce Office Issues Notification on the Implementation of the Decree on Petroleum Business
    On 9 March 2018, the Industry and Commerce Office of the Ministry of Industry and Commerce ("MOIC") issued Notification No. 0529/PDO.DTD/Cabinet/MOIC ("Notification") on the implementation of a decree on Petroleum Business for the Lao Petroleum and Gas Association in Lao PDR and the Directors of Petroleum Business Operation. Through the Notification, Decree on Petroleum Business Activity No. 331/PM, dated 27 October 2017 ("Decree") was officially promulgated. The Decree applies to the Petroleum Import and Export companies, Domestic Sale-Distribution companies, gas stations and similar companies. The key provisions of the Decree include:
    • Businesses that are registered and operating under Regulation No. 1785/IC.DTD, dated 7 September 2009 ("Regulation No. 1785/IC.DTD") need to expressly state that they will continue operating as Petroleum Import and Export companies, Domestic Sale-Distribution companies, or companies engaged in the rental of petroleum warehouse and petroleum transportation services. If there are any changes to their businesses, the relevant companies must propose to amend their business certificates with the Business Registrars of MOIC under Law on Enterprise No. 46/NA, dated 26 December 2013, Investment Promotion Law No. 14/NA, dated 17 November 2016 and the Decree.
    • Companies commencing a petroleum distribution business in 2018 are given 6 months to carry out the plan of petroleum distribution in accordance with Regulation No. 1785/IC.DTD. The petroleum distribution plan shall be confirmed at the end of the 6-month period if it is determined that they have complied with the standard condition set out in the Decree.
    The Law on Protection of Manufacturers Affected by Goods Importation No. 27/NA, dated 30 October 2017 Enters into Force in March
    The Lao National Assembly ("LNA") issued the Law on Protection of Manufacturers Affected by Goods Importation ("Applicable Law") and has adopted the resolution of such Applicable Law No. 059/NA, dated 30 October 2017. Subsequently, it issued the Decree of the President of Lao PDR on the Promulgation of the Applicable Law No. 287/POR, dated 7 December 2017, which came into operation in March 2018. The Applicable Law seeks to protect the local manufacturing sector from the rapid rise of importation of goods and products into the market. The measures set out in the Applicable Law include the imposition of tariffs and quotas on imported products to reduce the strain on Lao manufacturers that are struggling to survive the growing competition brought about by goods importation.
    Lao Government Issues Decree on Labor Dispute Resolution
    The Government of Lao PDR has issued Decree on Labor Dispute Resolution No. 76/GO, dated 28 February 2018 (“Decree”). The Decree sets out rules and procedures to settle labor disputes in an effective manner. It aims to protect the rights and interests of both the employers and employees.

    The Decree came into operation after 15 days from the time it was published on Lao’s Official Gazette.  The Decree was published on the Official Gazette on 14 March 2018.
    Tax Department Issues Regulation on New Excise Tax Rates for 2018
    The Tax Department of the Ministry of Finance has issued Regulation No. 169/TD dated 11 January 2018 on implementing new excise tax rates on fuel, alcohol, tobacco and certain types of services for 2018. The excise tax on super grade gasoline has risen from 35 percent to 39 percent. The excise tax rates on regular gasoline and diesel have also been raised to 34 percent and 24 percent, up from 30 percent and 20 percent, respectively.

    In addition to the excise tax adjustment on fuels, the Government also imposed a new tax rate of 45 percent on alcoholic beverages (containing 20° of alcohol or lower) and cigarettes.  Entertainment venues such as nightclubs (dancing halls), discotheques and karaoke bars have also been subject to the excise tax change.

    The new tax rates are as follows:

    No.

    General Goods

    Comparative Rate


     

    1

    Fuels:

    • Super
    • Gasoline
    • Diesel
    • Kerosene (for airplane)
    • Lubricant, hydraulic, grease, break oil

    January 2018 onwards:

    • 39%
    • 34%
    • 24%
    • 14%
    • 9%

      

    2

    Alcohol or alcoholic beverage:

    • Alcohol or alcoholic beverage containing 20° of alcohol and over
    • Alcohol or alcoholic beverage containing 20° of alcohol or lower

    2018-2019

    • 50%

    • 45% 

      

    3

    Tobacco:

    • Cigar
    • Cigarette or pack of cigarette
    • Instant tobacco   

    2018-2019

    • 45%
    • 45%
    • 25%

     

    Services

     

      

    4

    Entertainment:

    • Dancing hall
    • Discotheque
    • Karaoke

    2018-2019

                20%

     

    MALAYSIA

    e-Lelong and Construction Adjudication in the Rules of Court
    The Malaysian Courts' Rules Committee has issued the Rules of Court (Amendment) 2018 amending the Rules of Court 2012 ("Amended Rules"), which contains the rules governing High Court and Subordinate Courts proceedings in Malaysia.

    The highlight of the Amended Rules concerns mainly 2 areas: (i) the new web-based platform for Court auctions known as     e-Lelong; and (ii) the procedures in respect of applications to set aside, stay and enforce adjudication decisions in respect of the Construction Industry Payment and Adjudication Act 2012.

    Click here to read our client update.
    Securities Commission Malaysia Issues Guidelines on Listed Real Estate Investment Trusts
    With the aim of expanding the scope of permitted activities that can be undertaken by Real Estate Investment Trusts ("REITs"), the Securities Commission Malaysia ("SC") issued the Guidelines on Listed REITs ("Listed REITs Guidelines"), which took effect on 9 April 2018. Under the Listed REITs Guidelines, a listed REIT is now allowed to undertake property development activities. Listed REITs are also now allowed to acquire real estate through lease and income support arrangements.

    Following the issuance of the Listed REITs Guidelines, all requirements relating to listed REITS within SC's existing Guidelines on REITs have been superseded. Moving forward, SC’s Guidelines on REITs will apply to unlisted REITs only.
    Comprehensive and Progressive Agreement for Trans-Pacific Partnership
    The Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("CPTPP") was signed on 8 March 2018 by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam (in the absence of the US) in an effort to boost regional trade liberalisation. The CPTPP incorporates all provisions of the original Trans-Pacific Partnership save for a limited number of provisions which the CPTPP countries have agreed to suspend. These provisions will remain suspended until such time that the CPTPP countries decide to revive them by consensus. Some of the notable suspended provisions affect intellectual property rights, trade in services, environment and the scope of investor-state disputes.

    The CPTPP will bring about benefits such as the substantial elimination of tariff and non-tariff barriers for goods, improved access to services markets and greater legal protections for foreign direct investments. It also presents a new opportunity for companies to trade with other CPTPP countries (especially with those where a free trade agreement does not currently exist) and to increase investments across the trans-pacific region. The CPTPP will come into force after at least half of the CPTPP signatories ratify it. It is worth noting that while the CPTPP does not currently include the US, the door remains open for the US to join the CPTPP with the consent of other members.
    Anti-Fake News Act 2018 Comes into Force on 11 April 2018
    The Anti-Fake News Bill, tabled in Malaysian House of Representatives on 26 March 2018, was passed on 3 April 2018. It came into force on 11 April 2018.

    The Anti-Fake News Act 2018 ("    Act") is intended to "deal with fake news and related matters", whereby "fake news" has been broadly defined to include "any news, information, data and reports, which is or are wholly or partly false, whether in the form of features, visuals or audio recordings or in any other form capable of suggesting words or ideas".

    Under the Act, it is an offence to maliciously create, offer, publish, distribute, circulate or disseminate fake news, the penalty being a fine not exceeding RM500,000, imprisonment for up to 6 years, or both. Malaysian Courts are also empowered under the Act to issue a court order for the offender to make an apology to persons affected by the fake news.

    The Act creates offences for providing financial assistance, whether directly or indirectly, to the spreading of fake news, as well as an offence for failure to remove any publication containing fake news. Every offence punishable under the Act is a seizable offence.

    Existing laws which address fake news, such as the Communications and Multimedia Act 1998 are not repealed. According to statements by the Malaysian Communications and Multimedia Commission, the existing laws should be read together with the new law, and that the new law is necessary to cater to current needs, as well as to address loopholes in existing laws.
    Section 233 of the Communications and Multimedia Act Held Constitutional by the High Court
    After posting a doctored image of a magazine cover featuring the Prime Minister of Malaysia on his Facebook page in April 2016, a Malaysian Member of Parliament (MP) was charged with two counts of initiating and sharing two links of "fake communication" with the intention to offend others under section 233 of the Communications and Multimedia Act 1998 ("CMA").

    Section 233(1)(a) of the CMA essentially prohibits the publication of content deemed to be "    obscene, indecent, false, menacing or offensive in character with intent to annoy, abuse, threaten or harass another person", any person found guilty of which would be liable, upon conviction, to a maximum fine of RM50,000 and / or a maximum one-year jail term.

    Pursuant to these charges, an application was filed in the High Court of Malaya to challenge the constitutionality of Section 233 of the CMA on grounds that the section is "too broad" and is a violation of the rights enshrined in Article 10 of the Federal Constitution of Malaysia, which guarantees freedom of expression.

    On 24 January 2018, the High Court of Malaya dismissed the application, ruling that Section 233 of the CMA is constitutional and does not violate the Federal Constitution. In dismissing the application, the High Court judge ruled that freedom of expression is not absolute to those charged under section 233 of the CMA.
    The MCMC and their Service Provider sued over Massive Data Breach Involving Personal Data of Millions of Malaysians
    As reported in our previous TMT Regional Update, a massive scale data breach occurred in October 2017 whereby the personal data of millions of Malaysians were listed for sale on an online public forum by an unknown source, and regulatory authorities including the Malaysian Communications and Multimedia Commission ("MCMC"), the Personal Data Protection Commissioner’s office ("PDPC") and Malaysian police force were investigating the breach.

    In a twist of events, police investigations have traced the data breach to Nuemera (M) Sdn Bhd, i.e. the company engaged by MCMC to handle the Public Cellular Blocking Service ("PCBS") on behalf of MCMC. PCBS was launched by MCMC in 2014 to block lost or stolen mobile phones using its unique International Mobile Equipment Identity ("IMEI") number.

    Pursuant to these revelations, a civil suit has been filed against both MCMC and Nuemera by politician Fahmi Fadzil, who acts as the communications director for the People's Justice Party (Parti Keadilan Rakyat or "PKR").

    The legal counsel for Fahmi Fazil have stated that the case will be based on breach of trust by MCMC for failing to guarantee the personal safety and personal information of the 46.2 million mobile subscribers. The leaked data included personal information such as individuals' names, mobile numbers, addresses and national identification numbers.

    Click here to read our TMT Regional Update referred to above. The report is found on page 6 of the Update.
    Yet Another Massive Data Breach, Personal Details of More than 220,000 Malaysian Organ Donors and their Next-of-Kin Leaked Online
    Following the massive-scale data breach involving 46 million Malaysian mobile phone users in October 2017, the online public chat forum, Lowyat.net reported in January 2018 that files containing personal details of more than 220,000 pledged organ donors had been leaked online as early as September 2016. The source of this latest leak has not been identified as of yet.

    The recent data breach has far-reaching implications as it involves not only personal information of pledged organ donors, but also personal information of the nominated next-of-kin of the pledged organ donors. The presence of relationship information (e.g. spouse, sibling or parental) is said to increase the risk that victims of the data breach will be exposed to "social engineering" attacks, i.e. a form of manipulation to trick people into divulging confidential information by making use of the relationship information to gain the confidence of would-be victims.

    In March 2018, Deputy Communications and Multimedia Minister Jailani Johari provided an update on the status of investigations into the two data breaches. According to the Minister, regulatory authorities including the Malaysian Communications and Multimedia Commission ("MCMC"), Department of Personal Data Protection ("JPDP"), the Attorney-General's Chambers of Malaysia ("AGC"), and the National Cyber Security Agency ("Nacsa"), were still investigating the matter under Section 4 of the Computer Crimes Act 1997 ("CCA") (which creates an offence for unauthorized access to computer material with intent to commit or facilitate commission of a further offence), and Section 130 of the Personal Data Protection Act 2010 (for the offence of unlawful collection of personal data).
    Bank Negara Malaysia Issues Policy Document on Anti-Money Laundering and Counter Financing of Terrorism for Digital Currencies
    On 27 February 2018, the Central Bank of Malaysia (Bank Negara Malaysia or "BNM") issued a policy document titled Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) – Digital Currencies (Sector 6) (the "Policy Document").

    Digital currencies are not presently recognised as legal tender in Malaysia. Nonetheless, the Policy Document has been issued to ensure that effective measures are in place against money laundering and terrorism financing risks associated with the use of digital currencies and to increase the transparency of digital currency activities in Malaysia.

    The Policy Document sets out, amongst others, the minimum requirements and standards that reporting institutions (i.e. any person offering services to exchange digital currencies) must observe when carrying out any one or a combination of these types of activities: (i) exchanging digital currency for money; (ii) exchanging money for digital currency; or (iii) exchanging one digital currency for another digital currency, whether in the course of carrying on a digital currency exchange business or otherwise.

    BNM has highlighted that the reporting obligations imposed on the digital currency exchanges ("DCEs") is the first step towards making digital currency activities more transparent in Malaysia, but it does not in any way connote the authorisation, licensing, endorsement or validation by BNM of any entities involved in the provision of digital currency exchange services.
    No Ban or Regulation on Cryptocurrency Trading at Present, but Traders are Still Subjected to Malaysian Tax Laws
    In January 2018, the Second Finance Minister of Malaysia, on behalf of the Central Bank of Malaysia (Bank Negara Malaysia or "BNM") confirmed that BNM will not be enforcing a blanket ban on the trading of cryptocurrencies, as the Malaysian Government views digital currencies as part and parcel of Malaysia's "digitalisation roadmap" and a ban would curb innovation and creativity in the financial sector, particularly financial technology.

    Notwithstanding that digital currencies are not currently regulated in Malaysia, the Inland Revenue Board of Malaysia ("IRB") has confirmed that cryptocurrency traders are still subjected to Malaysian tax laws. In imposing a freeze on the bank account of London based cryptocurrency exchanger Luno, the IRB stated that the freeze was to enable the IRB to determine whether the cryptocurrency company had complied with the requirements of the Income Tax Act 1967 ("ITA"), as cryptocurrency businesses are subjected to Malaysian income tax by virtue of the Section 3 of the ITA. Section 3 of the ITA provides that tax shall be charged upon the income of any person accruing in or derived from Malaysia.

    In a separate statement by IRB CEO Datuk Seri Sabin Samitah, the IRB has also confirmed that all property transactions in Malaysia using cryptocurrency will still be liable for real property gains tax ("RPGT"), as taxes should be paid even when property transactions are carried out with digital currencies.
    Securities Commission Malaysia and the Central Bank of Malaysia caution Initial Coin Offering Schemes
    As at the date of this update, participation in Initial Coin Offering ("ICO") schemes (i.e. fundraising activities / investment schemes through the issuance and sale of digital tokens in exchange for investors paying for these tokens through cryptocurrencies) is neither prohibited nor regulated in Malaysia.

    However, in early January 2018, the Securities Commission Malaysia ("SC") issued a cease and desist order to CopyCash Foundation (a Singapore-based blockchain startup) to immediately cease and desist all its proposed activities including a purported plan to launch an ICO in Malaysia, after the SC found that there was a reasonable likelihood that disclosures in CopyCash Foundation's white paper and representations to potential investors would contravene relevant requirements under Malaysian securities laws.

    Following this event, the SC, together with the Central Bank of Malaysia (Bank Negara Malaysia or "BNM") issued a joint cautionary statement on ICO schemes in Malaysia, stressing that ICO schemes may involve activities that are subject to laws administered by the SC and BNM, and that carrying on such activities without proper authorisation will be an offence, whereby both authorities will not hesitate to take action against any offenders.
    New Corporate Rescue Mechanisms Rules Come Into Force on 1 March 2018
    The provisions contained in the Companies Act 2016 ("CA 2016") and the accompanying Corporate Rescue Mechanisms Rules 2018 on corporate voluntary arrangements ("CVA") and judicial management ("JM"), two new corporate rescue mechanisms in Malaysia, came into force on 1 March 2018. Prior to this date, a distressed company could only propose a scheme of arrangement with its creditors (which required court approval) and this is retained in CA 2016, with some changes.

    A CVA, available only to private companies, is a composition in satisfaction of a company's debts or scheme of arrangement of a company's affairs. A director, judicial manager or liquidator may propose a CVA. Directors remain in control of the company and a nominee, being an independent insolvency practitioner, supervises the implementation of the arrangement.

    A JM is essentially a temporary Court-supervised rescue plan where an external administrator (the judicial manager) manages, rescues or disposes the business of a company to maximise returns. A JM application can be made by the company, its shareholders, directors or any creditor and only if: (i) the company or its creditors consider that the company is or will be unable to pay its debts; and (ii) there is a reasonable probability of rehabilitating the company or of preserving its business as a going concern, or that otherwise the interests of creditors would be better served than by resorting to winding up.

    CVA and JM are not available to certain regulated entities.
    CAT Affirms MyCC's Decision to Impose Financial Penalty on MyEG for Abuse of Dominance in the Market for the Sale of Mandatory Foreign Workers’ Insurance
    On 28 December 2017, the Malaysian Competition Appeal Tribunal ("CAT") affirmed the Malaysian Competition Commission’s ("MyCC") decision which found MY E.G. Services Berhad ("MyEG") had infringed section 10 of the Competition Act 2010 as it had abused its dominant position in the market for the sale of mandatory foreign workers' insurance by applying discriminatory terms. As MyEG failed to cease its infringing conduct, due to the daily penalty of RM7,500 commencing from 25 June 2016, the fine ballooned from the initial proposed penalty of RM307,200 by MyCC in its proposed decision on 6 October 2015 to RM2,272,200 upon issue of MyCC's decision on 24 June 2016, to RM6,412,200 when the case was ultimately decided upon by CAT.

    MYEG was also ordered to: (i) cease and desist immediately from imposing different conditions to equivalent transactions in the processing of mandatory insurances for online foreign worker permits renewal applications; and (ii) provide an efficient gateway for all its competitors in the market for the sale of the mandatory insurances, which would allow the other competitors to compete at the same level, within sixty (60) days from the date of the CAT's decision. 

    MyEG's subsidiary, MY E.G. Commerce Sdn Bhd, an insurance agent of RHB Insurance Berhad sold mandatory insurances for the renewal of foreign worker permits. Its customers would enjoy speedier and easier processes (including automatic verification and no uploading requirements) when purchasing the mandatory insurances through MyEG's portal, compared to purchases made from other insurers which required additional steps. MyCC viewed such additional steps constituted different conditions to equivalent transactions and this was affirmed by CAT. In CAT's view, this was tantamount to MyEG applying pressure on end users to purchase mandatory insurances from RHB Insurance Berhad via MyEG's subsidiary.

    MyEG and its subsidiary intend to file a judicial review of the CAT's decision and to apply for a stay against the decision.

    MYANMAR

    Reduction of Company Registration Fees
    In 2016, the Directorate of Investment and Company Administration ("DICA") reduced the company registration fees for private companies from MMK 1,000,000 to MMK 500,000 in order to facilitate business and ensure easier incorporation. In March 2018, the DICA announced that the registration fee for private companies would be further reduced from MMK 500,000 to MMK 250,000 with effect from 1 April 2018.
    Standard Criteria for Investment Activities which Require Relevant Ministry Recommendations
    In March 2018, the Myanmar Investment Commission ("MIC") issued standard criteria for the types of business activities which require recommendations from the Ministry of Industries, the Ministry of Information ("MOI") and the Ministry of Home Affairs, subject to MIC Notification 15/2017 (i.e. list of restricted and prohibited business activities).

    For example, FM radio program broadcasting enterprises and cable TV enterprises must only have 30% foreign equity, and foreign investors must obtain permission from the Union Government and feedback from MOI.

    Businesses engaged in pharmaceutical production with the use of narcotic drugs and psychotropic substances, and distribution of their products must meet certain criteria such as: (i) Myanmar citizenship of proprietors; (ii) possession of sufficient land; and (iii) location of workplace or industry outside the suburbs.

    Detailed criteria can be found here.
    Myanmar Internal Revenue Department Rolls Out Online Tax Payment System
    The Internal Revenue Department rolled out its online tax payment system in February 2018. The online system aims to reduce delays resulting from manual filing and clearing of checks with local banks. It will also streamline the tax payment procedures with the Myanmar Economic Bank.

    The online tax payment system will apply to taxpayers registered under the Large Taxpayers Office, the Medium Taxpayers Office, and those registered under township tax offices. The taxes covered by the online payment system are: Income Tax (Corporate, Capital Gains, and Personal), Commercial Tax, Special Goods Tax, and Withholding Tax. Stamp duty is not covered by the online payment system.

    The use of the online tax payment system is optional at the moment as it is still at the pilot stage.
    Trademark Bill 2017 Submitted to Parliament
    The latest version of the Myanmar Trademark Bill ("Bill"), published in the third quarter of 2017, was submitted to Parliament in January 2018 for the Upper House's consideration. The Bill introduces a first-to-file trademark system in Myanmar, where a first-to-use is currently adopted.

    One of the provisions of the Bill relates to the re-registration of existing trademarks. Existing trademark owners who have recorded their trademark rights at the Office of Registration of Deeds will be required to file new applications to enjoy trademark protection under the new trademark framework. Chapter 7 of the Bill sets out the information and documents required for filing trademark applications, such as: (i) the name and address of the person or legal entity applying for registration; (ii) clear and complete representation of the mark; and (iii) names and types of goods and services requested for registration in accordance with international trademark classification. Each registered trademark will be valid for an initial term of 10 years, renewable for an additional term of 10 years. Chapter 6 of the Bill sets out the types of Trademark which cannot be registered.

    The publication of the Bill, alongside the Patents Bill, Copyright Bill, and the Industrial Designs Bill marked the first development in the intellectual property sphere initiated by the National League of Democracy government since it assumed office in April 2016.

    PHILIPPINES

    Philippines Withdraws from the ICC
    The Philippines became the 177th member country of the International Criminal Court ("ICC") in 2011 after the Senate ratified the Rome Statute, the Court's founding treaty. The Statute has been ratified by 123 nations so far. On 19 March 2018, the ICC was officially notified by the United Nations that the Republic of the Philippines had, on 17 March 2018, deposited a written notification of withdrawal from the Rome Statute. President Rodrigo Duterte claims to have pulled out of the ICC because the ICC allegedly "ignored due process" when it started a preliminary examination of allegations of extrajudicial killings in his administrative war on drugs.

    According to the ICC, withdrawing from the Rome Statute is a sovereign decision that is subject to Article 127 of the Rome Statute. Under the same statute, a withdrawal becomes effective one year after the deposit of the notice of withdrawal to the UN Secretary-General. As to the effect of withdrawal, it has no impact on proceedings that are already on-going prior to the date on which the withdrawal became effective.  Thus, ICC retains its jurisdiction over crimes committed during the time the State was still a party to the Rome Statute.
    House of Representatives Approves Divorce Bill on Final Reading
    On 19 March 2018, the House of Representatives approved House Bill No. 7303 – An Act Instituting Absolute Divorce and Dissolution of Marriage in the Philippines ("Absolute Divorce Bill") with a vote of 134-57-2. The Absolute Divorce Bill seeks to provide spouses in "irremediably failed marriages" to secure an absolute divorce decree under limited grounds. It will also allow divorced spouses to marry again.

    The grounds for the dissolution of marriage under the Absolute Divorce Bill include: (i) the existing grounds for legal separation under Article 55 of the Family Code; (ii) the grounds for annulment of marriage under Article 45 of the Family Code; (iii) separation in fact of the spouses for at least five years; (iv) legal separation of the spouses by judicial decree for at least two years; (v) psychological incapacity under Article 36 of the Family Code; (vi) irreconcilable marital differences and conflicts; and (vii) gender reassignment of one of the spouses.

    While the measure has support in the House, it has no counterpart in the Senate. In order for a law to be passed, both houses should pass similar measures.
    Two Lawmakers Call on House of Representatives for the Immediate Passage of Expanded Maternity Leave Bill
    On 12 March 2018, in light of the National Women's Day Month celebration, two lawmakers called on the House of Representatives for the immediate passage of the Expanded Maternity Leave Bill ("Bill"). House Committee on Women and Gender Equality Head Bernadette Herrera-Dy and Ifugao Representative Teddy Baguilat expressed hope that the Bill, which has languished in previous Congresses, would be approved in the 17th Congress.

    The Bill proposes 100-day maternity leave for employees in the public and private sectors, with an option to extend for an additional period of 30 days without pay. The maternity leave shall be granted to employees in every instance of pregnancy, miscarriage, or abortion regardless of frequency. The Bill seeks to amend the existing law which allows women to take only 60 or 78 days of paid maternity leave. This is 38 days short of the 98 days stipulated in Convention 183 of the International Labor Organization, which the Philippines has committed to.

    The Senate version of the Bill had been approved on third and final reading on 6 March 2017. Click here to read our previous update on this.

    Once the House of Representatives version of the Bill is approved, it will go through the Conference Committee constituting members from both the House of Representative and the Senate for consolidation of the versions / threshing out of differences on any provision of the Bill. It will then be submitted to the President for his approval.
    Philippines Raises Thresholds for Compulsory M&A Notifications
    The Philippine Competition Commission ("PCC") has raised the thresholds for required notifications of mergers and acquisitions ("M&A").

    Under the Philippine merger control regime, a transaction will trigger pre-merger reporting requirements to the PCC if they satisfy two tests: Size of Person and Size of Transaction. In a memorandum circular issued on 5 March 2018, the PCC raised the new thresholds to 5 Billion Pesos for the Size of Person and 2 Billion Pesos for the Size of Transaction, up from 1 Billion Pesos each.

    The new thresholds took effect 15 days from 5 March 2018.

    Click here to read our client update.
    Senate Concurs to 5 IMO Conventions on Marine Environmental Protection, and 2 FAO Agreements to Prevent Illegal Fishing
    On 5 March 2018, the Senate, voting 19-0, approved resolutions adopting seven maritime treaties. The Department of Foreign Affairs ("DFA") announced that the Senate has concurred to the accession by the Philippines to five Conventions of the International Maritime Organization ("IMO"), and two Food and Agriculture Organization ("FAO") Agreements (collectively, the "Agreements"). These Agreements are: Anti-Fouling Systems Convention 2001; Protocol of 1997 to the International Convention for the Prevention of Pollution from Ships, 1973 as modified by the Protocol of 1978; Protocols of 1978 and 1988 to the Safety of Life at Sea Convention 1974; Protocol of 1988 to the Load Line Convention 1966; and the FAO Compliance Agreement and Agreement on Port State Measures to Combat Illegal, Unreported and Unregulated ("IUU") Fishing.

    Senator Loren Legarda, the Chair of the Senate Committee on Foreign Relations, emphasized in her sponsorship speech the importance for the Philippines to become a Party to the Agreements, which support the implementation of UN Sustainable Development Goals through the protection of the marine environment, dealing with climate change, and promotion of safe navigation and sustainable fishing practices.

    DFA will deposit the Instruments of Ratification to the IMO and the FAO.

    SINGAPORE

    Singapore Exchange to Allow Dual Class Share Listings, Proposes Safeguards
    Having received broad support for dual class share ("DCS") structures following a February 2017 public consultation on a possible listing framework for DCS structures (“February 2017 consultation”), the Singapore Exchange ("SGX") will allow the listing of companies with DCS structures. Issuers who wish to list with a DCS structure must meet the Mainboard listing criteria under Chapter 2 of the SGX-ST Listing Rules (Mainboard) ("Mainboard Rules"), and other additional requirements under the proposed DCS listing framework ("Framework").

    On 28 March 2018, SGX issued its response to feedback received on the February 2017 consultation, and at the same time, commenced its second consultation in respect of the Framework. This second consultation sets out proposed amendments to the Mainboard Rules to codify the Framework, and details of proposed safeguards. Key proposals relate to: (i) the admission and related criteria for listing; (ii) various safeguards against entrenchment risks and expropriation risks; and (iii) measures to enhance clarity to investors.

    The public consultation ends on 27 April 2018.

    Click here to read our client update.
    Consultation on Draft GST Guides on Taxing Imported Services by way of Reverse Charge and Taxing Imported Services by way of an Overseas Vendor Registration Regime
    The Inland Revenue Authority of Singapore ("IRAS") consulted on draft goods and services tax ("GST") guides published in regards to businesses and individuals buying services from overseas providers. IRAS is proposing to implement a reverse charge mechanism to tax business-to-business ("B2B") supplies of imported services, and implement a new Overseas Vendor Registration Scheme to tax business to consumer ("B2C") supplies of digital services.

    The public consultation ended on 20 March 2018.

    Read the draft Guides here.
    Employment Act to be Broadened to Cover More Employees
    On 5 March 2018, the Minister for Manpower announced in Parliament that key changes will be made to the Employment Act to cover more employees in Singapore with effect from 1 April 2019.

    Professional, managers and executives in Singapore earning more than S$4,500 will now be covered by the core provisions of the Employment Act, pending any further exemptions to be announced. Additionally, more employees will also be covered under the additional protections afforded to more vulnerable employees under the Employment Act.  The amendments will also streamline the forum for hearing employer-employee disputes.

    Click here to read our client update.
    Retail Investors in Malaysia, Singapore and Thailand to have Wider Access to Fund Managers Across the Three Countries
    The Securities Commission Malaysia, the Monetary Authority of Singapore, and the Securities and Exchange Commission of Thailand have signed a Memorandum of Understanding to enhance the ASEAN Collective Investment Schemes ("CIS") Framework.  The Framework enables fund managers operating in one jurisdiction to offer funds constituted and approved in that jurisdiction to retail investors in the other two jurisdictions under a streamlined authorisation process.

    The enhanced Framework took effect on 23 February 2018.

    Click here for more details.
    Public Consultation on Revisions to the Code of Corporate Governance and SGX Listing Rules
    The Corporate Governance Council ("CGC") has proposed amendments to the Code of Corporate Governance in a Consultation Paper published on 16 January 2018. As a result of the recommendations made by the CGC, the Singapore Exchange ("SGX") has also proposed amendments to the SGX Listing Rules, as set out in the consultation paper. These amendments aim to tweak and tighten existing rules so as to improve the corporate governance practices of companies listed in Singapore.

    The public consultation ended on 15 March 2018.

    Click here to read our client update.
    Cybersecurity Bill Passed
    On 8 January 2018, the Cybersecurity Bill ("Bill") was introduced in Parliament. The Bill takes into account the feedback received from a public consultation on the earlier draft Cybersecurity Bill ("Draft Bill").  The Bill seeks to establish a framework for the protection of critical information infrastructure against cybersecurity threats, the adoption of measures to prevent, manage and respond to cybersecurity threats in Singapore, and the regulation of providers of licensable cybersecurity services. The Bill was passed on 5 February 2018.

    Click here to read our client update.
    Recognition of Foreign Insolvency under the UNCITRAL Model Law
    The case of Re: Zetta Jet Pte Ltd and others [2018] SGHC 16 is the first reported decision from the Singapore High Court on the recognition of foreign insolvency proceedings under the UNCITRAL Model Law on Cross-Border Insolvency, providing a demonstration of how the courts will apply the new law.

    In its decision, the High Court declined to grant full recognition of US insolvency proceedings due to public policy reasons, as the US proceedings were in breach of a Singapore court injunction. However, the High Court granted the foreign insolvency representative limited recognition to set aside or appeal against the Singapore injunction.

    Click here to read our client update.

    THAILAND

    New Payment System Act
    A new law on e-payment businesses, the Payment System Act B.E. 2560 (2017) ("PSA"), comes into effect on 16 April 2018.

    One of the key objectives of the PSA is to systematise payment systems and e-payment businesses in Thailand by dividing these into 3 main payment business categories, which are:

    • Systematically Important Payment System;
    • Payment System under Supervision; and
    • Payment Service under Supervision.
    Depending on the category and the type of activities and / or services that will be provided, service providers may be required to either: (i) apply for a license; or (ii) complete a registration with the Bank of Thailand ("BOT").

    BOT has published an extensive list of draft notifications in order to implement the PSA. Examples of these draft notifications are: (i) the draft notification of the Ministry of Finance re: Determination of Payment Service under Supervision; and (ii) the draft Notification of BOT re: Regulations, Procedures and Conditions on the Permission and Registration on Payment Service under Supervision.

    BOT regularly holds seminars for existing operators on the implication of the new regulations on the payment system law.

    Operators in this area should continue to monitor developments.
    Update on the New Office of Trade Competition Board
    One of the key changes introduced by the recently enacted Trade Competition Act B.E.2560 (2017) ("New TCA"), which became effective on 5 October 2017, is the establishment of the Office of Trade Competition Board ("OTCB") as an independent organisation.

    The Minister of Commerce, Mr. Sontirat Sontijirawong, recently reported that the Ministry of Commerce ("MOC") is now working on the establishment of the OTCB and the transfer of relevant officials from MOC to this new office.  Members of the new Trade Competition Board will need to be appointed by July 2018, with the Secretary of the OTCB to be appointed within 180 days following the appointment of the new Board.  The Minister of Commerce was reported in Matichon as stating that the first Secretary of the Office of Trade Competition Board should therefore be appointed by late 2018 (    https://www.matichon.co.th/news/853764).

    During this transitional period, MOC has continued in its regulator role, most recently coming out to state that it will take enforcement action under the New TCA if Big C's mobile grocery stores represent unfair trade.  Big C operates mobile grocery stores on pickups, selling consumer goods in villages. "In this case, the ministry is closely monitoring the impact on traditional, small-scale retail businesses," Mr. Sontirat said, as reported in the Bangkok Post.

    VIETNAM

    New Decree 15/2018/ND-CP Guiding the Law on Food Safety
    On 2 February 2018, Decree 15/2018/ND-CP guiding the Law on Food Safety came into force. The new Decree supersedes Decree 38/2012/ND-CP.

    Among other changes, the new Decree now provides greater clarity as to when a food establishment / business may be exempt from obtaining a Food Safety Certificate. These establishments and businesses include small-scale food retail establishments, mobile food manufacturers and sellers, sellers of pre-packaged food and restaurants within hotels).
    New Decree 09/2018/ND-CP Governing Activities in the Sale and Purchase of Goods (and related activities) of Foreign-Invested Enterprises in Vietnam
    On 15 January 2018, the Government issued Decree 09/2018/ND-CP ("Decree") to replace the decade-old Decree 23/2007/ND-CP, which notably prescribed regulations and requirements on foreign-invested companies engaged in trading and trading-related activities. The Decree came into effect on the same date.

    Perhaps the most notable change introduced by the new Decree is the abolishment of the requirement by foreign-invested trading companies to obtain a Business License when they engage in export, import and whole distribution activities (except for certain restricted goods). The Decree specifies that the following business services are subject to the Business License requirement for foreign-invested companies: (i) retail distribution; (ii) logistics services not committed for market opening by Vietnam; (iii) rental of goods; (iv) commercial promotion; (v) commercial intermediary services; (vi) e-commerce services; and (vii) auctioning services.




    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.
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