Legal & Regulatory
By: Winnindo Business Consult
Editor: Mourme Taruna Halim
Representative offices (ROs) are an attractive way for foreign investors to get a feel for a given market in Asia, as they are the easiest type of foreign investment structure to set up. The defining characteristic of ROs are their limited business scope – ROs are generally forbidden from engaging in any profit-seeking activities – but they are excellent investment vehicles for foreign companies to better understand a country prior to full market entry, or as a communication channel between that country and HQ.
The set-up procedures and structure of an RO varies across Asia. Over the past few years, Asia Briefing has detailed how ROs function across different Asian markets, including in China, Vietnam, and India. In this article, we examine representative offices in Indonesia.
By Elizabeth Leclaire
Foreign investment in China’s lucrative e-commerce market has again been expanded by China’s Ministry of Industry and Information Technology (MIIT). Complete foreign ownership of e-commerce enterprises, previously accessible only to companies within the Free Trade Zones, is now permitted across the whole of China.
As of Friday, June 19th, 2015, WFOEs involved in online data and transaction processing may own up to 100 percent of company shares. MIIT’s new policy broadly expands foreign investor power, as the previous shareholder cap for foreign investors in e-commerce was limited to 50 percent.
The newest issue of Asia Briefing magazine, titled “China, India & Vietnam – Setting Up in Asia’s Investment Hotspots“, is out now and available as a complimentary download in the Asia Briefing Bookstore.
- Comparing Asia’s FDI Caps and Restrictions
- Setting up an Office in China, India and Vietnam
- China, India & Vietnam Tax Comparisons
In Vietnam, an official company seal or chop is used for legally authorizing documentation. A seal gives legal validity to any documents or papers issued by companies, organizations or agencies. Any paper or document showing an official act of a company that contains only a signature of its general director is still considered insufficient. Indeed, the use of seal in any organizations or companies in Vietnam is essential.
Under the Government decree No.58/2001/ND-CP and No.31/2009/ND-CP, issued in August 2001 and April 2009, respectively, each company or organization is permitted to use only one seal. In case the company or organization needs another seal with content identical to the first one, such second seal must have a specific mark that is distinctive from the original one. Ink for all seals must be red. The Ministry of Public Security has the right to grant seal engraving permits, uniformly prescribe specimens of all seal types, and manage seal engraving activities.
2014 was a formative year for Chinese territorial disputes with other nations in Asia. Tensions with Japan and The Philippines reached near breaking point, with signs of instability creeping into the entire Asian region. Yet behind these media-capturing headlines, trade has been booming. All in all, last year was a mixed bag when it came to assessing China’s relations with the rest of Asia, including in its own backyard of Hong Kong. What can be expected in 2015?
By Benedict Lynn
In the second of this two part article examining how the Foreign Corrupt Practices Act (FCPA) will affect key nations in Asia-Pacific, we focus this week on ASEAN. In part one, we provide a detailed explanation of what FCPA is, what it entails, and its implications for foreign businesses in China and India.
The 10 member states that make up ASEAN are among the most populous and fastest growing economies in the world. Thanks to an abundance of cheap labor, the region is fast replacing China as a global manufacturing hub and the land is rich in natural resources. The December 2015 deadline for the ASEAN Economic Community (AEC), which aims to turn the 10 nation bloc into a single market and production base, is just around the corner.
By Benedict Lynn
The Foreign Corrupt Practices Act (FCPA) is a piece of U.S. federal law that aims to achieve accounting transparency and clamp down on corruption. Its remit is extensive and includes both U.S. companies and companies incorporated in the U.S., along with their officers, directors, employees, stockholders, and agents. The act prohibits payment to foreign officials, which it broadly defines as being: “any officer or employee of a foreign government or any department, agency, or instrumentality thereof.”
Although in place since the late 1970’s, the act has been particularly prolific over the last year. The American government has already settled a number of corporate FCPA enforcement actions, including the US$384 million settlement in January with Alcoa Inc for the bribery of officials of a Bahraini state-controlled aluminum smelter.
As foreign investment into the Asia-Pacific region has increased dramatically over the last decade, so too has the scrutiny and enforcement efforts of the FCPA. The act’s investigators are likely to be even more active in the coming year, with the U.S. Department of Justice claiming that the investigations will be conducted more “swiftly, efficiently, and effectively”. As we approach the new year, we take a look in this two-part article at how the FCPA might affect key nations in the Asia-Pacific, focusing this week on China and India, next week on ASEAN.
RELATED: How the Foreign Corrupt Practices Act is Affecting Asia – Part 2
BEIJING – In a major boost for its domestic anti-graft campaign, China has received the backing of all 21 APEC members to return to China thousands of corrupt officials who have fled abroad.
The anti-graft law will cover officials guilty of bribery, money laundering and illegal trade. The ruling Communist Party of China (CPC) disciplinary watchdog announced that the network will consist of law enforcement personnel from each APEC member. According to a report from Chinese state-run Xinhua news agency, it will include liaison personnel, a chairman and a secretariat.
Op-Ed Commentary: Samuel Wrest
Over the last month, Visa regulations in the Asia-Pacific region have undergone some major changes. Several key nations have implemented new schemes aimed at improving foreign investment, limiting immigration and increasing tourism. With business travel in the Asia-Pacific up 7 percent over last year and now outstripping the rest of the world, changes to the region’s numerous Visa systems are invariably acutely felt. In this article, we highlight some of the more important schemes that have recently been introduced.
SINGAPORE – The Monetary Authority of Singapore (MAS) has proposed new measures to improve investor protection, including extending current regulatory safeguards to cover non-conventional investment products and making it mandatory for all investment products to be rated according to their complexity and risk.
A consultation paper released by MAS earlier this week noted the increase in the number of complex non-conventional products offered to retail investors and the way that such schemes are structured in order to assign ownership of underlying physical assets to investors which, as a result, takes them out of the regulatory boundary of the Securities and Futures Act (SFA) and the Financial Advisers Act.