JANUARY – FEBRUARY 2026
CHINA
New law bolsters VAT regime
China’s State Council enacted the Value-Added Tax (VAT) Law, along with the VAT Law Implementation Rules, on 1 January 2026, to update key aspects of its VAT regime.
Baker McKenzie said the new rules adopted “the place of consumption” as the main criterion for VAT on services and intangibles, treating a transaction as occurring in China if it was consumed in China, or if the seller was domestic. The rules also set out scenarios for cross-border transactions, including foreign supplies to domestic customers, excluding overseas on-site consumption, and supplies directly connected to domestic goods, real estate or natural resources.
The rules redefine the VAT sales amount to include all monetary and non-monetary economic benefits and introduce a general anti-avoidance rule allowing tax authorities to adjust arrangements lacking a reasonable commercial purpose that reduce, defer or exempt VAT, or increase refunds.
Baker McKenzie added that, despite the VAT framework remaining largely unchanged, new sourcing rules for services and intangibles, mixed sales provisions, and VAT withholding for natural persons had an impact on taxpayers’ compliance and VAT obligations.
HONG KONG
New cybersecurity obligations enforced
The Protection of Critical Infrastructures (Computer Systems) Ordinance (Cap 653) (PCICSO) came into operation in Hong Kong on 1 January 2026 and imposes statutory cybersecurity obligations on designated critical infrastructure (CI) operators.
Tanner De Witt reported that the law aims to prevent service disruptions through three pillars: organisational governance; preventive technical safeguards; and incident reporting.
The ordinance covers essential sectors including energy, IT, banking, transport (land, air and maritime), healthcare, communications, and infrastructure operators hosting social or economic activities such as major sports and performance venues. While the PCICSO focuses on system security rather than personal data protection, which falls under the Office of the Privacy Commissioner for Personal Data, increased oversight by the Security Bureau is expected to drive higher regulatory activity in data privacy governance.
In the next three to five years, the emergence of new online gambling problems brought about by new technologies and new business models may necessitate the formulation of new judicial interpretations
Li Tianhang
Senior Partner
Hui Ye Law Firm
Shanghai
See full story HERE
INDIA
Proposal to raise FDI cap in insurance sector
India’s Department for Promotion of Industry and Internal Trade issued a note on 11 February 2026 to propose amendments to the Consolidated FDI (foreign direct investment) Policy, 2020, in relation to foreign direct investment in the insurance sector.
JSA reported that the note covered higher foreign investment and related conditions. It also allows up to 100% foreign investment in the paid-up equity of an Indian insurance company under the automatic route, subject to approval by the Insurance Regulatory and Development Authority of India.
The note reiterates governance requirements, including that at least one person holding the title of chair, managing director or CEO must be a resident Indian citizen. Foreign portfolio investment in an Indian insurance company will also need to comply with the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations. Increases in foreign investment must follow the Reserve Bank of India pricing guidelines under the Foreign Exchange Management Act.
FDI in the Life Insurance Corporation of India is allowed up to 20%. The 100% FDI cap for insurance intermediaries is also reaffirmed, alongside conditions for majority foreign-owned intermediaries.
INDONESIA
Corporate compliance gets clearer roadmap
The Criminal Procedure Code (KUHAP), passed by the House of Representatives on 18 November 2025, was promulgated on 2 January 2026 to reshape criminal enforcement for corporations.
ATD Law, in association with Mori Hamada, reported that the new KUHAP law introduced a court-approved Deferred Prosecution Agreement framework as an alternative route for resolving corporate criminal cases. Eligible companies can seek to suspend prosecution if the court approves the agreement and the company meets the prescribed conditions. The law also clarifies how an individual’s conduct can be attributed to a company and how corporate fault is established. It broadens and strengthens corporate sanctions, including fines that can be increased based on annual profit. It recognises successor liability, meaning mergers and restructurings may not eliminate potential criminal exposure.
ATD Law in association with Mori Hamada reported that corporations should treat this reform as a wake-up call to reassess governance structures, compliance controls, investigation readiness and transaction risk allocation in Indonesia.
JAPAN
Tax reform eases PE exemption rules for foreign LPs
The Liberal Democratic Party and the Japan Innovation Party agreed on the outline of Japan’s 2026 Tax Reform Plan on 24 December 2025 setting out changes affecting foreign business. According to Anderson Mori & Tomotsune’s report, the reform plan eases permanent establishment (PE) exemption rules for foreign limited partners in certain investment limited partnerships (LPs).
Where an LP forms a specified committee of limited partners, the ownership threshold would rise to “less than 50%” from “less than 25%”. It would also broaden exclusions from “business execution” to cover approvals of conflict-of-interest transactions, and abolish the requirement that the investor have no income attributable to other PEs.
Under the plan, a wind-up of a foreign corporation will be subject to controlled foreign company rules only on its passive income if certain requirements are met, effective on or after 1 April 2026. The income threshold for amounts not subject to progressive tax rates will decrease to about JPY330 million (USD2.1 million), and the minimum national tax rate will rise to 30%, effective from 2027.
SINGAPORE
Infocomm media approvals tightened
Singapore’s Ministry of Digital Development and Information and the Infocomm Media Development Authority (IMDA) jointly announced proposed amendments to the Info-Communications Media Development Authority Act on 6 January 2026 to introduce a stricter approval regime for M&A and ownership changes in the information and communications media sector.
According to Hogan Lovells, the proposed amendments expand merger controls by requiring IMDA approval for any person, licensed or not, acquiring 30% or more of a media entity. They also remove prior approval for pro forma transactions, replacing it with a notification requirement. A two-tier appeal route would also allow IMDA reconsideration and ministerial appeal.
Hogan Lovells reported that while the IMDA’s 2022 Code of Practice for Competition in the Provision of Telecommunication and Media Services has already achieved harmonisation within the limits of the legislation in force at the time, the proposed bill seeks to further strengthen and align the regulatory enforcement of competition issues across the telecoms and infocomm media sectors.
TAIWAN
AI Basic Act takes effect
The AI Basic Act, passed by Taiwan’s cabinet on 23 December 2025, came into effect on 14 January 2026. The act aims to build a smart nation, promote human-centric AI R&D and industry growth, and safeguard rights, digital equality and sustainable development.
According to Lee and Li, the National Science and Technology Council will be the central competent authority, with local governments as local authorities and sector regulators retaining jurisdiction.
Taiwan’s cabinet will form a National AI Strategy Special Committee to co-ordinate policy and create a National AI Development Programme.
The act also defines AI by its autonomous capabilities and sets out seven principles, including privacy, safety, transparency, fairness and accountability. It mandates risk mitigation, special protection for minors, warnings for designated high-risk AI and frameworks for liability, remedies, compensation and insurance.
After promulgation, relevant authorities are expected to review existing laws, issue interpretive guidance, and develop implementing regulations including definitions of high-risk AI and related labelling requirements.
IN NUMBERS
USD 10.9bn
The deal value of KKR and Singtel’s acquisition of ST Telemedia Global Data Centres
See full story
MALAYSIA
Sectors brace for carbon tax
The Malaysian government has reaffirmed plans to introduce a carbon tax in 2026, primarily targeting the iron, steel and energy sectors.
KPMG reported that while the specific mechanism remained undefined, the tax was expected to increase industry costs, which might result in higher prices for consumers and SMEs.
To mitigate this impact, the Green Technology Financing Scheme (GTFS) and other green incentives are intended to fund the adoption of sustainable alternatives and ease the transition to a low-carbon economy.
Wong & Partners added that, for efficient implementation, the carbon tax framework would align with the upcoming National Carbon Market Policy and National Climate Change Bill.
MYANMAR
New export rules aim to boost trade
The Ministry of Finance and Revenue in Myanmar issued new procedures, on 23 December 2025, allowing companies to temporarily export raw materials and semi-finished goods for overseas processing before reimporting the finished products for domestic sale. The procedures will come into effect on 1 February 2026.
According to Tilleke & Gibbins, the new procedures govern the temporary export of goods for foreign repair or manufacturing and their subsequent reimportation. Under this framework, duties and taxes are levied only on the value added abroad, provided the goods remain identifiable, rather than on the item’s total value.
It also exempts the initial export from advance income tax, ensuring costs are focused solely on foreign improvements.
Tilleke & Gibbins reported that these new procedures were a major reinvigoration of Myanmar’s customs regime, and introduced a uniform and transparent approval system.
PHILIPPINES
Filing rules enhance corporate transparency
In December 2025, the Securities and Exchange Commission (SEC) of the Philippines issued the Beneficial Ownership Disclosure Rules of 2026 to strengthen corporate transparency and improve the accuracy and timeliness of beneficial ownership disclosures.
The SEC reported that the updated regulation, which came into effect on 1 January 2026, introduced a more detailed approach to identifying beneficial owners, categorising them from “A” to “I” based on ownership interests, voting rights and levels of control.
Category A covers individuals who hold at least 20% of a corporation’s outstanding voting rights or capital. The rules apply not only to traditional corporations but also to partnerships, one-person corporations and foreign entities registered to operate in the Philippines.
The new framework also provides clearer compliance timelines. Newly registered corporations must disclose beneficial ownership details at the time of incorporation, while existing entities must update this information when filing their next general information sheet. To reinforce compliance, the SEC has implemented stricter penalties for non-compliance and misreporting.
SOUTH KOREA
Amendment grants attorney-client privilege
The National Assembly of the Republic of Korea passed an amendment to the Attorney-at-Law Act on 29 January 2026 to introduce the concept of attorney-client privilege, which grants attorneys and clients the right to protect confidential legal communications and related materials.
Kim & Chang reported that this amendment, expected to take effect in early 2027, formally granted attorneys and their clients, including prospective clients, the right not to disclose confidential communications made for the purpose of providing or receiving assistance. It also allows attorneys and clients to refuse disclosure of documents or materials prepared in connection with litigation, investigations or regulatory examinations in matters for which the attorney has been retained.
The firm said more guidelines and related litigation were likely to follow to further define the scope and applicability of the additional protections. The amendment will be promulgated after a one-year grace period. However, its protections will apply retroactively to attorney-client communications and related work produced.
THAILAND
BOI tightens residential land ownership
The Royal Thai Government Gazette published the Thailand Board of Investment’s (BOI) amended criteria for BOI-promoted companies to own land for residential use on 6 January 2026. The changes introduce new procedures for land ownership applications.
Tilleke & Gibbins reported that the BOI had tightened the rules and established the e-Land system to process land applications for offices and worker housing. Applications are reviewed virtually and any requested amendments or supplementary documents must be submitted within seven business days. Otherwise, the application is automatically rejected and removed from the system.
Additional eligibility limits apply to operational-worker residences, which cannot be in housing estates, condominium units, or classified as houses or commercial buildings. Tilleke & Gibbins noted that the amended criteria build on the BOI’s 2024 land-ownership rules for foreign companies by adding further eligibility conditions for residences for operational-level or unskilled workers.
VIETNAM
New construction law removes red tape
The National Assembly of Vietnam passed the Law on Construction on 10 December 2025 to streamline administrative procedures, decentralise management, promote digital transformation and adopt international contractual practices in the construction sector.
Nishimura & Asahi reported that under the new framework, which would take effect on 1 July 2026, projects would be categorised by investment type, and local People’s Committees would have enhanced authority and responsibility for managing construction quality and urban order.
The Law on Construction also introduces international practices previously absent from the old framework, including International Federation of Consulting Engineers-style Dispute Adjudication Boards and Dispute Avoidance/Adjudication Boards. It reinforces the role of arbitration by prioritising domestic arbitration for public and public-private partnership projects, while international mechanisms are permitted only when compliant with treaties, officially approved and agreed on contractually.
Nishimura & Asahi said the Law on Construction reflected Vietnam’s efforts to modernise the legal structure of the construction sector by tackling existing legislative and practical issues. Although these reforms are promising, further government direction is necessary for effective implementation.
MARCH – APRIL 2026
CAMBODIA
New rules set on business closures
Cambodia’s Accounting and Auditing Regulator (ACAR) issued formal procedures on 10 March for enterprises and non-profit organisations ceasing operations.
DFDL reported that the directive, under the Non-Bank Financial Services Authority, aims to ensure legal compliance and resolve prior incomplete notifications or previous misunderstandings of statutory obligations.
To formalise a closure, entities must submit an administrative letter and service fee to the ACAR at least 60 days before their annual financial statement submission deadline.
To secure final cessation approval, entities must resolve all financial reporting. This requires maintaining proper accounting records, completing required independent audits, and filing all current and delinquent financial statements.
Entities that fail to notify the ACAR on time will remain operationally active with continuing legal obligations.
CHINA
State Council reshapes offshore compliance
China’s State Council enacted the Regulations on the Security of Industrial and Supply Chains on 7 April, followed by Regulations on Countering Foreign Improper Extraterritorial Jurisdiction a week later, to help streamline and systematise the existing regulatory framework.
According to Morgan Lewis, the decrees may increase risks for offshore operations. The supply chains decree asserts jurisdiction over foreign business conduct that possesses an appropriate connection to the Chinese mainland.
The newly established Malicious Entity List also targets organisations that advocate or promote foreign sanctions, even if they do not directly implement them.
A single routine corporate action – such as terminating a supplier to satisfy foreign export controls – may simultaneously trigger Chinese supply chain investigations and severe extraterritorial countersanctions.
A Morgan Lewis advisory noted: “China has transitioned from ad hoc countermeasures to a comprehensive, multi-agency countersanctions legal framework capable of addressing commercial conduct, regulatory compliance decisions, and cross-border legal conflicts.”
HONG KONG
Employers face higher MPF contributions
Hong Kong’s Mandatory Provident Fund Schemes Authority (MPFA) is reviewing MPF contribution income levels, which have remained unchanged for 13 years.
Currently, both employers and employees are required to contribute 5% of the employee’s salary to the MPF.
Lewis Silkin reported that the review, announced on 23 March, proposes raising the maximum monthly income level from HKD30,000 (USD4,231) to HKD40,000 (USD5,107) to increase mandatory MPF savings for higher income employees by increasing the portion of income on which mandatory contributions are calculated.
Under the same proposal, the minimum threshold would also go from HKD7,100 (USD906) to HK$10,000 (USD1,276) to increase the income floor for mandatory employee contributions, so lower income employees are not required to contribute.
For higher earners, this would raise the monthly contribution cap from HKD1,500 to HKD2,000, representing a 33% increase in mandatory employer contributions.
Employees earning above the maximum income level would see personal contributions rise by HKD500. Conversely, the increased minimum threshold would exempt more low-income workers from mandatory contributions, easing their financial burden.
“From an employer’s standpoint – particularly for those with a significant number of employees earning above the threshold – this may translate to material increases in payroll-related costs,” advised Lewis Silkin. “Industry leaders have already expressed concern that such an adjustment could impact cash flow, especially for SMEs, against a backdrop of uneven economic recovery.”
Industry leaders have urged the MPFA to consider phasing in any increases to ease the immediate financial burden. A final report is expected to be submitted by mid-2026.
INDIA
SEBI introduces mutual fund locks
The Securities and Exchange Board of India (SEBI) introduced a voluntary debit freeze facility for mutual fund investors on 6 March to strengthen digital security.
The SEBI said the facility, effective from 30 April, would allow investors to lock both dematerialised and non-dematerialised (statement of account) folios so that no mutual fund units could be debited until the folio was unlocked.
Registrars and transfer agents (RTAs) would initially offer the facility through the interoperable online MF Central platform, which was created to streamline mutual fund transactions and service requests. Access will be limited to know your customer-compliant (registered and validated) investors with both a valid email ID and mobile number.
The Association of Mutual Funds in India (AMFI), after consultation with the SEBI, will prescribe the process for locking and unlocking folios, including procedures for different investor types. The AMFI will also define the financial and non-financial transactions permitted during the lock-in period. All asset management companies and RTAs must disclose the opt-in process and transaction impact on their websites and statement of additional information.
INDONESIA
Bank Indonesia revamps payment system
Bank Indonesia (BI), the central bank, enforced the new Payment System Industry Regulation on 31 March consolidating rules into a single framework covering payment service providers (PSPs), infrastructure operators and support partners.
Assegaf Hamzah & Partners said the central bank was “creating a single framework that brings together the country’s entire payment ecosystem, including service providers, infrastructure operators and supporting partners”.
Key changes include the TIKMI (transaction, interconnection, competence, risk management and IT infrastructure) assessment framework, which evaluates PSPs.
While PSPs are required to submit self-assessments, BI will still determine the final results and reserves the right to appoint an independent assessor. Initial TIKMI outcomes will be set within one year of the effective date.
PSPs are also now classified as either primary or non-primary, and further grouped into PJPs (penyedia jasa pembayaran, or payment service providers) and PIPs (payment infrastructure providers).
For PJPs, BI has introduced activity bundling, which imposes stricter risk management and capital requirements. To comply with the new rules, PSPs had to submit a strategic business plan and BI-approved payment system business plan by 30 April.
JAPAN
Strict oversight for solar projects
Japan is stepping up oversight of solar projects to ensure responsible development and mitigate negative environmental impacts.
The Ministry of Economy, Trade and Industry (METI) announced on 9 March that it will discontinue feed-in tariff (FIT) and feed-in premium (FIP) subsidies for commercial ground-mounted solar power plants, starting in fiscal year 2027.
White & Case reported that support would continue for commercial rooftop and residential solar installations. The decision stems from the multi-ministerial Mega Solar Countermeasure Package, adopted in late 2025, which sets three core pillars – strengthening laws on inappropriate projects (improving environmental, forestry and safety rules), enhancing collaboration with local authorities, and prioritising community-integrated energy.
“The Japanese government is taking steps to strengthen oversight of solar projects, aiming to promote their responsible and efficient development,” said White & Case.
The stricter rules “highlight the government’s move to tighten regulations on large-scale solar projects, which have been subject to significant public scrutiny”.
MYANMAR
Foreign investment rules updated
The Myanmar Investment Commission (MIC) issued two updates in March that affect investors making new investments or carrying out MIC-approved projects.
Tilleke & Gibbins reported that the first update, issued through MIC notifications, clarifies the minimum conditions for investment in promoted sectors to qualify for tax exemption or relief under the Myanmar Investment Law.
Investors must contribute at least 35% of the total investment amount in cash, as stated in the relevant proposal or endorsement application.
If the investment includes a foreign loan, the investor must obtain approval from the Central Bank of Myanmar, submit a loan repayment schedule, and provide evidence that both the loan
proceeds and the investor’s capital contribution were remitted in cash through an authorised dealer bank.
The second update, set out in an MIC news bulletin, confirms that the renminbi is now accepted as foreign investment capital for MIC permits and endorsement applications, in addition to US dollars. RMB funds may be remitted through banks authorised to handle foreign currency RMB transfers, using the same process currently applied to USD.
Tilleke & Gibbins said these changes might influence how investment capital was structured, remitted and assessed for tax incentives.
PHILIPPINES
Foreign ownership limits adjusted
Philippine President Ferdinand Marcos Jr signed an executive order on 13 April promulgating the 13th Regular Foreign Investment Negative List.
The Official Gazette of the Republic of the Philippines said the order defines foreign participation limits categorised into list A (constitutional mandates) and list B (security, health and small business protections).
Under the updated list, mass media, co-operatives, private security and small-scale mining remain reserved for Filipinos, with zero foreign equity.
Ownership is capped at 25% for recruitment and defence construction, 30% for advertising, and 40% for sectors in public utilities, natural resources and private lands.
Telecoms permit up to 100% foreign ownership given reciprocity, reflecting recent public service liberalisation that also applies to specific renewable energy projects.
Meanwhile, list B retains restrictions on sensitive industries such as firearms, gambling and micro-enterprises.
MALAYSIA
Digital currency funds enter market
The Securities Commission Malaysia (SC) issued the sixth revision of its guidelines on exchange-traded funds (ETFs) on 2 March, enabling the offering of digital currency ETFs.
Skrine said the revised guidelines, which took effect on the issuance, added definitions for digital currency as prescribed securities under the Capital Markets and Services Order 2019, and digital currency ETFs, which were identified as ETFs that invest in one or more digital currencies and aim to track a benchmark linked to those digital currencies.
A new appendix outlines key requirements for digital currency ETFs, including that the benchmark must be based on traded spot (cash market) prices and reflect the price movements of the underlying digital currencies. Eligible digital assets require at least a one-year track record on a Financial Action Task Force-aligned platform and meet strict standards for anti-money laundering and counter-terrorist financing compliance, liquidity, utility and security.
According to Skrine, with the additional requirements for digital currency ETFs now incorporated into the guidelines, and the exchange unveiling its listing rules, “it will not be long before these ETFs make their debut”.
Thailand
Revised law expands investor base
The Securities and Exchange Commission of Thailand (SEC) has revised its institutional investor framework and expanded the criteria for qualifying investment capital on 1 March.
Chandler Mori Hamada reported that the SEC broadened the II category to include digital asset business operators, approved investment planners and investment consultants, whereas previously only securities and derivatives operators and investment analysts qualified.
The Thai SEC also expanded the investment capital requirement used to determine sophisticated investor status such as angel, ultra-high-net-worth and high-net-worth individuals.
The calculation now includes both direct and indirect investments, such as those held through private funds, provident funds and unit-linked insurance policies in securities, derivatives, investment tokens and government tokens. Previously, the criteria only featured direct investments in securities and derivatives.
The inclusion of digital asset business operators, investment planners and investment consultants expands the customer base eligible for products intended for the II category.
Chandler Mori Hamada also said the SEC aimed to treat investment tokens and G-tokens more like traditional securities under a “same activity, same risk approach”, while broader financial standing assessments better reflected investors’ positions and expanded access to products.
SINGAPORE
MAS issues climate transition policies
The Monetary Authority of Singapore (MAS) issued climate-related transition planning guidelines for banks, asset managers and insurers on 5 March to focus on the financial impact of climate change on institutions and their customers as the economy shifts toward lower carbon activities.
The guidelines will come into effect in September 2027, after an 18-month transition period.
According to Shook Lin & Bok, the MAS expects financial institutions (FIs) to implement transition planning into overall strategy and risk management to address their own climate- related financial risks, while supporting customers and investees in managing theirs, strengthening financial stability.
FIs need to align internal behaviour through performance metrics, remuneration policies and incentives. Processes must also be in place to manage legal and reputational risks from public climate commitments.
Implementation is intended to be pragmatic and iterative, recognising current data and methodology constraints. Over time the MAS expects FIs to expand beyond climate to broader environmental risks, including biodiversity loss.
Shook Lin & Bok noted that FIs were expected to not indiscriminately withdraw credit, investment or insurance from higher risk clients. Instead, they should engage them in a risk-proportionate way to encourage credible risk management and reduce the risk of a disorderly transition and stranded assets.
SOUTH KOREA
Digital assets gain protection
The National Assembly passed the revised Special Act on the Prevention of Loss Caused by Telecommunications-based Financial Fraud and Refund for Loss on 12 March.
The Financial Services Commission (FSC) said the revised law subjects virtual asset exchange service providers to the same anti-vishing (voice phishing) regulatory framework as traditional financial institutions. These providers must now verify transaction purposes, monitor suspicious activities, freeze suspected accounts, and join the AI-based Anti-phishing Sharing and Analysis Platform to share real-time data.
The amendment also officially recognises virtual assets as eligible for vishing-related loss relief. This ensures victims can receive support whether their digital assets are directly extorted, or stolen money is laundered into cryptocurrency.
To assist victims unfamiliar with digital asset trading, providers are now permitted to liquidate recovered virtual assets and issue loss refunds in cash on the request from a victim.
VIETNAM
New decree to secure data protection
The Vietnamese government’s decree on Technical Means for Detecting Administrative Violations, issued in February 2026, came into effect on 1 April.
NPLaw said the decree regulated the list, management and use of technical equipment, as well as procedures for collecting and using data from such equipment to detect administrative violations.
Data may be submitted to competent authorities in person at agency offices or incident locations, or electronically via email, portals or websites, the Vietnam Electronic Identification (VNeID) application, other mobile applications, and officially announced hotlines.
It can also be sent through postal services or lawful data sharing via digital platforms or integrated systems.
Individuals and organisations providing data are also entitled to confidentiality of personal information under personal data protection laws, and may request written or electronic notification of the verification and handling results.
They must, however, provide accurate contact information when required, ensure the authenticity and integrity of submitted data and co-operate with authorities on request.
