Top Business Law Updates in Asia 2025
BANGLADESH
VAT Act updated
On 9 January, the interim government amended the Value Added Tax (VAT) Act of 2012, tightening registration rules and raising VAT and supplementary duty rates.
DFDL reported that amid a backlash due to inflation and an economic slowdown, some rates were revised on 22 January.
The key changes include a lower threshold for VAT registration, now mandatory for businesses with an annual turnover exceeding BDT5 million (USD41,300), down from the previous BDT30 million. Additionally, businesses earning between BDT3 million and BDT5 million must enlist for VAT, whereas the previous requirement applied to those with a turnover of BDT5 million to BDT30 million, subject to a 4% turnover tax.
CHINA
Change in AML goes into effect
For the first time in 18 years, China has amended its anti-money-laundering law, with effect from 1 January, replacing the law introduced in 2006. According to the Standing Committee of the National People’s Congress, while most of the amendments under the new law do not introduce new regulatory requirements, several changes have been included.
Among the changes is the establishment of the principle of extraterritorial application, which extends the law’s remit to cover any foreign money laundering and terrorism financing activity outside China that poses a threat to the country’s sovereignty, security and financial order, as well as to the rights and interests of its citizens, legal entities and other organisations.
CROSS-BORDER
Singapore, Malaysia sign SEZ agreement
On 7 January, Singapore and Malaysia signed the Johor-Singapore Special Economic Zone (JS-SEZ) Agreement, following a 2024 memorandum of understanding.
Rajah & Tann reported that the JS-SEZ spans nine flagship areas, including the Iskandar Development Region and Pengerang, to promote cross-border economic collaboration. Key initiatives include investments in 11 sectors such as manufacturing, green energy and the digital economy, targeting 100 projects over a decade to boost economic growth and job creation. Renewable energy development and trading are prioritised, supported by the Invest Malaysia Facilitation Centre – Johor to streamline business setups.
Measures to enhance the movement of people and goods include improved visas, customs clearance and transport links. Incentives include special corporate tax rates, tailored business incentives and reduced taxes for knowledge workers. The agreement aims to solidify bilateral economic ties and attract high-value investments, fostering regional growth.
SOUTH KOREA
AI act introduced
The plenary session of the Korean National Assembly voted to introduce the Act on Artificial Intelligence Development and Establishing a Foundation of Trust (AI Act) on 26 December 2024.
Yulchon reported that the act makes South Korea one of the first jurisdictions after the EU to establish comprehensive legislation regulating AI. The act outlines provisions for ensuring AI transparency and safety, managing high-impact AI systems and conducting fact-finding investigations on AI service providers.
HONG KONG
Treasury shares regime introduced
On 8 January, Hong Kong’s Legislative Council passed the Companies (Amendment) Bill 2024, introducing a treasury shares regime for listed companies incorporated in Hong Kong.
According to Johnson Stokes & Master, this allows companies to repurchase shares and hold them as treasury shares for resale, aligning with the Stock Exchange of Hong Kong’s amended listing rules from June 2024. The amendment ordinance will take effect on 17 April 2025. From that date, companies will be able to hold, sell, transfer or cancel repurchased shares, with the sales or transfers treated as share allotments.
The bill introduces an implied consent mechanism for electronic communication. Members and debenture holders are deemed to consent to receive information via a website if company articles or debenture instruments include such provisions. A one-time notification will activate this mechanism.
Businesses have repeatedly raised concerns about the uncertainty and unpredictability regarding the range of and timing for actions resulting from the Trump administration
Anne Petterd
Head of the Asia-Pacific
International Trade Practice
Baker McKenzie
Sydney
See full story HERE
INDIA
Data protection rules issued
On 3 January, India’s Ministry of Electronics and Information Technology released the draft Digital Personal Data Protection Rules, a key step in establishing India’s personal data protection framework.
IndusLaw reported that these rules align with the Digital Personal Data Protection Act of 2023, offering clarity and structure while avoiding undue complexity. The draft rules, which are open for public consultation until 18 February, propose phased implementation.
The Data Protection Board will be set up immediately after the final version is published, while other compliance provisions will take effect later. A transition period of about two years will be given for stakeholders to comply with the act and the rules, as under the General Data Protection Regulation.
INDONESIA
Luxury goods VAT raised
The Indonesian government has, following the finance minister’s issuance of Regulation No. 131/2024 on value-added (VAT) tax treatment on 31 December 2024, raised the VAT rate from 11% to 12% from 1 January.
According to Baker McKenzie, the VAT increase applies to areas including the import and the delivery of taxable luxury goods such as motorised vehicles. However, for the delivery and the import of taxable goods and services other than luxury ones such as motorised vehicles, the VAT payable remains at 11%.
The VAT increase results from the enactment of Law No. 7 of 2021 on tax regulations harmonisation (HPP Law) in October 2021, which set the timeline for the VAT rate to be adjusted from 11% from April 2022 to 12% from 1 January 2025.
JAPAN
Proposed taxation reforms approved
On 27 December 2024, the Japanese government approved the 2025 Tax Reform Proposals, including adjustments to the tax burden in response to rising prices and working-hour changes, with draft legislation to be presented to the Japanese parliament early this year.
According to the Ministry of Finance, the key proposals include increasing income tax exemptions, adjusting employment income deductions and introducing special exemptions for dependents aged 19 to 22. There are also measures to support child-rearing, including expanded tax credits for housing loans and life insurance premiums.
To boost regional economies, tax incentives for SMEs will be expanded, with adjustments to corporate tax rates. The reform also includes measures to promote investment in startups and enhance Japan’s asset management environment, such as extending the Angel Tax System and raising the upper limit of the minimum trading unit for ETFs in the regular investment frame of the Nippon Individual Savings Account.
IN NUMBERS
211bn USD is Japan’s net foreign direct investment in 2024, according to the nation’s Ministry of Finance
MALAYSIA
Online Safety Bill passes
The Malaysian parliament has passed the Online Safety Bill 2024, aiming to enhance online safety by regulating harmful content and imposing obligations on licensed application service providers (ASPs) and content application service providers (CASPs).
Skrine Advocates & Solicitors reported that the bill targets harmful content such as child sexual abuse, financial fraud and incitement to violence. The bill mandates that ASPs and CASPs implement measures like user safety tools, mechanisms for reporting harmful content, and online safety plans. It also empowers the Malaysian Communications and Multimedia Commission (MCMC) to issue directives and assess compliance. MCMC will also act when users report harmful content. According to Skrine Advocates & Solicitors, the Online Safety Committee will provide advisory support, while the Online Safety Appeal Tribunal will handle disputes. The bill is awaiting royal assent and publication in the Federal Gazette before it becomes law.
MYANMAR
Rules for share transfers updated
The Directorate of Investment and Company Administration has issued new documentation requirements for Myanmar-registered companies making changes to their shares or directors, as of 8 January 2025.
According to Tilleke & Gibbins, to process share transfers a company must submit an application form along with a board resolution approving the transfer, and a signed share-transfer agreement with proof of stamp duty payment. To process director changes, a company must submit an application form along with the new director’s ID or passport, a shareholder resolution approving the change, and the new director’s consent to act, or a signed resignation for departures.
PHILIPPINES
Law promoting natural gas signed
To achieve a stable domestic supply of natural gas, which has been affected by the volatility of import sources, President Ferdinand Marcos Jr signed into law on 15 January the Philippine Natural Gas Industry Development Act, according to the 19th Congress of the Philippines.
The law, which is intended to promote the development of the country’s natural gas industry, includes provisions to ensure transparency and fair pricing for customers, while designating natural gas as a form of transition fuel for a change to renewable energy as part of an effort to address the country’s long-term power supply challenges.
SINGAPORE
Bill passed on workplace fairness
Singapore’s Workplace Fairness Bill passed on 8 January, strengthening the city state’s efforts to promote fair and harmonious workplaces.
According to the Ministry of Manpower (MOM), the bill enhances protections against workplace discrimination while preserving flexibility for employers to meet business needs. It prohibits adverse employment decisions based on protected characteristics such as age, nationality, gender, race, religion and disability, addressing more than 95% of discrimination complaints.
The bill also requires firms to implement grievance handling processes to foster communication and amicable resolution of workplace issues.
MOM emphasises education to promote compliance and introduces calibrated enforcement measures for severe breaches. By fostering trust and collaboration, the bill seeks to create equitable workplaces that support Singapore’s social cohesion and economic resilience.
THAILAND
Updates on foreign land ownership in pharma firms
The Board of Investment (BOI) on 9 December 2024 updated its regulations allowing certain foreign companies with investment promotion privileges to own land under specific conditions. According to Tilleke & Gibbins, the revised rules apply to companies with a minimum paid-up registered capital of THB50 million (USD1.4 million).
Eligible companies can own land for two purposes: office use, and residential purposes for operational-level workers. Office land ownership is capped at 8,000 square metres, while residential land for workers is limited to 32,000sqm. Residential facilities must include common amenities such as parking and kitchens, adhere to BOI approval and be within 10 kilometres of the business operation. These updates aim to enhance investment incentives while regulating foreign land ownership for specific business and residential needs.
VIETNAM
New electricity law in effect
Following the adoption of a new electricity law by Vietnam’s National Assembly at the end of November 2024, the country is set to see the inclusion of new-energy generation sources including solar, wind, ocean and geothermal in an expanded definition of renewable energy starting from 1 February, according to Vietnam-based Frasers Law Company.
Intended to advance the country’s general legislative framework for developing power generation projects using different energy sources, the new law, known as Electricity Law 2024, covers the development of renewable energy including offshore windpower and the prioritisation of large-scale power generation projects for the formation of power plant clusters or renewable energy centres. It facilitates the development of offshore wind power projects by specifically regulating investment incentives.
It is unclear if ongoing offshore wind power projects already permitted for wind measurement or geological and hydrological investigations will be subject to approval under the new electricity law.
link
