On 28 March 2024, the Significant Investments Review Act 2024 (“Act“) and subsidiary legislation under the Act, the Significant Investments Review Regulations 2024 and Significant Investments Review (Reviewing Tribunal) Rules 2024, came into force.
The Act sets out a new investment management regime that applies to both local and foreign investors, for entities that are critical to Singapore’s national security interests.
The term “national security” is not defined within the Act; however, Minister for Trade and Industry Gan Kim Yong clarified in Parliament that national security will cover areas critical to Singapore’s sovereignty and security, including its economic security and the continued delivery of essential services.
Salient aspects of the Act are briefly summarised below.
Provisions which Apply Only to Designated Entities
Entities that are critical to the national security interests of Singapore but are not caught by the existing sectoral legislation may be designated under the Act (“Designated Entities“).
Designated Entities will be subject to, among others, the following ownership and control requirements:
(a) A person who becomes a 5% controller of the Designated Entity must notify the Minister for Trade and Industry (“Minister“).
(b) A person must seek the Minister’s approval before becoming a 12%, 25%, or 50% controller, an indirect controller, or acquiring as a going concern (parts of) the business or undertaking of the Designated Entity.
(c) A person who intends to sell his/her stakes in the Designated Entity which would result in him/her ceasing to be a 50% or 75% controller of the Designated Entity must seek the Minister’s approval before doing so.
(d) Designated Entities must seek approval for the appointment of key personnel.
(e) Designated Entities must not, among others, be voluntarily wound up or dissolved without the Minister’s consent.
The requirements do not apply retrospectively, but to new transactions or control changes after designation of the entity. Transactions that occur without the necessary approvals will be rendered void.
Entities that are being considered for designation have been contacted by the Ministry of Trade and Industry (“MTI“). Entities that are to be designated will be issued a Designation Order and their designation status will be notified in the Government Gazette and listed on the Office of Significant Investments Review website. Designated Entities will remain designated until the designation is cancelled.
Entities that have Acted Against Singapore’s National Security Interests
The Act also allows for “call-in” powers. The Minister can review ownership or control transactions involving an entity, even if the entity has not been designated, when two conditions are satisfied: (i) the entity has acted against Singapore’s national security interests; and (ii) the ownership or control transaction occurred within the two-year period prior to the act against national security.
Reconsideration, Appeals and Assistance
Parties may submit a reconsideration application against decisions by the Minister. The reconsideration application must be submitted within 14 calendar days of the decision.
If parties wish to appeal against the Minister’s reconsideration decision, they may submit an appeal to an independent Reviewing Tribunal. The appeal must be submitted within 30 calendar days of the reconsideration decision.
An Office of Significant Investments Review has been set up under MTI as a dedicated one-stop touchpoint to engage affected stakeholders and provide them with guidance and clarifications.
Click on the following links for more information:
Available on the Singapore Statutes Online website at www.sso.agc.gov.sg:
Available on the MTI website at www.mti.gov.sg:
Rajah & Tann publications:
- November 2023 Rajah & Tann Legal Update titled “Significant Investments Review Bill Tabled in Parliament – New Investment Management Regime for Entities Critical to Singapore”
- December 2022-January 2024 Rajah & Tann NewsBytes article titled “Passing of Significant Investments Review Bill – Updating of Singapore’s Investment Management Tool Kit”
Disclaimer
Rajah & Tann Asia is a network of member firms with local legal practices in Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Our Asian network also includes our regional office in China as well as regional desks focused on Brunei, Japan and South Asia. Member firms are independently constituted and regulated in accordance with relevant local requirements.
The contents of this publication are owned by Rajah & Tann Asia together with each of its member firms and are subject to all relevant protection (including but not limited to copyright protection) under the laws of each of the countries where the member firm operates and, through international treaties, other countries. No part of this publication may be reproduced, licensed, sold, published, transmitted, modified, adapted, publicly displayed, broadcast (including storage in any medium by electronic means whether or not transiently for any purpose save as permitted herein) without the prior written permission of Rajah & Tann Asia or its respective member firms.
Please note also that whilst the information in this publication 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 legal advice or a substitute for specific professional advice for any particular course of action as such information may not suit your specific business and operational requirements. You should seek legal advice for your specific situation. In addition, the information in this publication does not create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on the information in this publication.
