18 Feb ASEAN Today – Regional Legal and Business News – January 2022
ASEAN Today – Regional Legal and Business News for January 2022 including an Immigration Update on the Test and Go Scheme and Corporate Law News on the Reduction of Registration Fee for Transfer and Mortgage of Immovable Property
ASEAN Economic Community News
Positive Regional Outlook
The COVID-19 pandemic has caused global investment activities to fall off, and ASEAN, the largest recipient of foreign direct investment (FDI) in the developing world, went from US$182 billion of FDI in 2019 to US$137 billion in 2020. However, experts say the outlook for ASEAN looks promising and that the region is poised to become the world’s fourth largest economy. They believe that the coordinated pandemic response efforts, implementation of the Regional Comprehensive Economic Partnership (RCEP), digital transformation, and public-private cooperation will drive inclusive growth and development in the region. Throughout the pandemic, ASEAN has remained an attractive investment destination. ASEAN’s share of global FDI rose from 11.9% in 2019 to 13.7% in 2020, while the intra-ASEAN share of FDI in the region increased from 12% to 17%. According to the first report by the ASEAN Development Outlook (ADO), the total combined GDP of 10 ASEAN countries in 2019 was US$3.2 trillion and made ASEAN the fifth-largest economy in the world and that it should become the fourth largest by 2030. Additionally, the report says that 61% of ASEAN’s total population of about 700 million people are under the age of 35 and the majority of young people are embracing digital technologies in their daily activities.
As the ASEAN Economic Community continues to grow, so do the energy demands arising from the region’s rapid growth. The current ASEAN Energy Outlook says that ASEAN’s energy demand will increase substantially by 146% by 2040 and that the region’s energy security issues and the increase in greenhouse gas emissions also need to be addressed. The ASEAN Energy Ministers recently endorsed the regional energy blueprint, ASEAN Plan of Action for Energy Cooperation (APAEC) Phase II: 2021 – 2025, in which the ASEAN member states agree that innovation is a highly crucial component in balancing the region’s energy transition, security, and sustainability. The APAEC sets out strategies enabling relevant stakeholders to tap into the potential of innovations for achieving a regional aspirational target, including 32% energy intensity reduction and a 23% share of Renewable Energy (RE) in the energy mix by 2025.
ASEAN Patent News
The ASEAN Patent Examination Co-operation (ASPEC) is a regional patent work-sharing program amongst all the ASEAN Member States except Indonesia and was launched in 2009. Under the program, an Intellectual Property Office (IPO) from one participating country can use the search and examination results from the IPO in another participating country as reference. However, there is no obligation for an IPO to automatically approve the patent application. The program allows applicants from participating countries to obtain corresponding patents faster and more efficiently. The ASPEC program also potentially reduces the duplication of search and examination work and the work done on a corresponding application serves as a useful reference in producing quality reports. ASPEC operates in the English language in all participating IPOs and is free-of-charge to the applicant. However local search and examination fees will still apply. If the IPO was the International Searching Authority for an international application under the Patent Cooperation Treaty (PCT), the International Preliminary Examination Report that issued on the PCT application can be used. Starting June 15, 2021, applicants can now request accelerated patent prosecution under the ASPEC program using a copy of a written opinion having at least one claim determined to be allowable or a copy of the International Search Report and Written Opinion if a PCT application.
No Tax on Foreign-Sourced Income
The Malaysian government has backtracked on their plan to tax residents on their foreign-sourced income and will now provide a tax exemption for individual taxpayers on their income sourced from abroad. The foreign-sourced income tax exemption covers dividends received by companies and limited liability partnerships, and all types of income received by individual taxpayers. The income tax exemption becomes effective on January 1, 2022, and runs until December 31, 2026. The government believes that the tax exemption on dividends will encourage more investments to be remitted to Malaysia and improve the country’s standing as a destination for regional HQs.
100% Ownership of Public Services
The Philippines amended its Public Service Act and will now allow 100% foreign ownership of public services including telecommunications, airlines, shipping, and railways. The amended act clearly defines the definition of public utility and public services as only firms at least 60% owned by Filipinos are allowed to operate as a public utility. The definition of public utility has been narrowed to electricity distribution, electricity transmission, airports, seaports, water pipeline distribution and sewerage, tollways and expressways, and public utility vehicles. Now, there are no restriction on foreign ownership for industrial undertakings not classified as public utilities. However, the amended act contains safeguards that prohibit foreign state-owned enterprises from owning capital in a public service classified as critical infrastructure.
New Product Labeling Rules
Vietnam issued Decree No. 111/2021/ND-CP in December 2021 which amends the rules on the labeling of goods and becomes effective on February 15, 2022. The new decree will impede tax evasion and fraud and requires individuals and companies that produce, export, or import good to record and determine the origin of the goods. All labels must be accurate, truthful, and comply with legal provisions on the origin of goods imported to, exported from, and manufactured in Vietnam, or any country participating in international agreements with Vietnam. Goods labeled in compliance with the previous decree and manufactured, imported, or circulated before February 15, 2022, can continue to be circulated until the product’s expiry date.
Raw Commodity Exports
Indonesia announced that it has revoked more than 2,000 mining, plantation, and forest-use permits due to non-compliance or because the permits had been unused, a further tightening oversight of the nation’s natural resources. Indonesia also banned coal exports for January 2022, imposed restrictions on palm oil shipments by requiring mandatory domestic market obligations, and proposed a potential export tax on nickel pig iron. Experts say that Indonesia may be preparing to disrupt its raw commodity exports to aid in the development of its domestic processing and refining sectors. However, the country is highly dependent of the revenues from its raw commodity sales.
Intellectual Property Acts Amended
Singapore updated the country’s Patents Act, Trade Marks Act, Registered Designs Act, Plant Varieties Protection Act, and Geographical Indications Act 2014 earlier this month. The amended acts will help make the intellectual property (IP) registration process more streamlined and efficient and encourage greater use of intangible assets by companies in Singapore. The changes will allow the partial acceptance of national trademark applications even when a portion of the trademark is being rejected. By allowing partial acceptance, a trademark can be registered for the categories of goods and services in which there are no objections. The changes will also improve the public’s access to patent documents.
THAILAND LEGAL REVIEW
Test and Go Scheme Resumes
Thailand will resume its Test & Go scheme effective February 1, 2022, where fully vaccinated Travelers will be able to enter under the Test & Go scheme as long as they take Covid tests on Day 1 and Day 5 after arriving Thailand. With Test & Go, travelers will be free to go anywhere in Thailand after staying in a SHA++ hotel for one night and passing their first test on Day 1 and then staying in a SHA++ hotel with a partner hospital on Day 5 while waiting for the results of the second test on Day 5.
For travelers who have already applied for Thailand Pass for the Sandbox scheme, they can switch to the Test & Go scheme. However, they must apply for a new Thailand Pass when registration re-opens on February 1, 2022. Although, some people may receive the QR Code right away, it can take up to 7 days.
Proof of prepayment for 2 separate nights of accommodation at government-approved hotels, such as SHA Extra Plus (SHA++), or AHQ on Day 1 and Day 5, and the expenses for 2 RT-PCR tests on Day 1 and Day 5 are required when applying for a Thailand Pass QR Code. The prepayment for Day 1 must include accommodation, a test, and a prearranged transfer from the airport to the hotel. Travelers can book two different hotels for their accommodation on Day 1 and Day 5. However, on both Day 1 and Day 5, they must stay within their room until they receive the RT-PCR test result.
Corporate Law News
Reduction of Registration Fee for Transfer and Mortgage of Immovable Property
The fee for the registration of transfer and mortgage of immovable property made at the same time will be reduced from 2% to 0.01% (Transfer fee) and from 1% to 0.01% (Mortgage fee). To be eligible for such reduction, compliance with the following conditions is required:
1. Immovable property includes:
– Residential buildings in the category of detached house, semi-detached house, and terraced house
– Commercial buildings
– Land with residential or commercial buildings thereon
2. Registration of transfer and mortgage shall be made between January 18, 2022, and December 31, 2022
3. Purchase price and appraisal price shall be no more than THB 3 million and mortgage loan limit shall be no more than THB 3 million
4. This reduction applies to a purchaser who is an ordinary person with Thai nationality only
The material contained herein is only provided for information purposes. No part thereof may be deemed to constitute legal advice or the opinions of this law firm or any of its attorneys. Whilst every effort has been made to verify the contents of the material contained herein, we do not represent, warrant, undertake, or guarantee that the information contained in this newsletter is correct, accurate, or complete. Legal advice must be sought before acting on any information contained herein.