Inside this issue: Message from Chairman

1

Welcome to the inaugural issue

of the ASEAN Plus Newsletter.

ASEAN Plus is our response to clients who need clear and practical country expertise across Asia. With close to 1000 lawyers from leading Asian firms, at ASEAN Plus, we understand the cultural nuances and importance of maintaining great relationships in Asia. ASEAN Plus firms offer the best of local business and cultural knowledge with international capabilities for our clients. Each ASEAN Plus law firm is truly a firm that knows Asia.

Through our collective efforts, we have succeeded in projecting our reach and influence beyond individual national borders. This collective capability is an important feature of each ASEAN

Plus law firm. We hosted a very successful ASEAN Summit this year; an event which we will continue to host in the years to come to help our clients and SMEs reach out into the ASEAN Economic Community. The AEC is a market place of 622 million people which attracted US$120 billion of FDI in 2015. As a single market, there will be keen interest from investors within and outside ASEAN.

We started this newsletter to enhance our outreach to clients and friends in the region. Our objective is to share new developments with everyone who is interested in Asia or who is already doing business in Asia.

Asia is a huge marketplace for business. While the AEC presents opportunities, the

Message f rom Chai rman

Join t Feature– RHTLaw TaylorWessing & HPRP

ty Law also gives an opportunity to the tax payer to submit revisions against his first declaration. The tax payer is given up to three opportunities to make such revisions during the tax amnesty period. Such revisions will have to be confined to (i) declaring additional or a reduction of assets that have not been declared in previous declarations, (ii) alterations to the Redemption Rates calculations due to a cancellation of the tax payer’s intention to (a) repatriate and invest the assets into Indonesia; or (b) retain the onshore assets. If any Indonesian taxpayer elects not to declare such assets and the tax authorities subsequently discover them, criminal sanctions as well as more onerous tax rates may be imposed on them.

The Tax Amnesty Law is the Indonesian government’s attempt

to address several issues including a fiscal deficit, existing tax gaps and increasing tax revenue through the repatriation of assets currently kept outside Indonesia. The aim is to help the country accelerate economic growth, restructure its economy and fund much needed infrastructure development in the country. In addition to concessionary redemption rates for individual taxpayers who voluntarily declare their previously undeclared assets, the Tax Amnesty Law also provides for concessionary redemption rates for Indonesian businesses which voluntarily declare their previously undeclared assets. However, these concessionary redemption rates are only applicable to small and medium sized Indonesian companies (i.e. companies with annual revenue of 4.8 billion rupiah and below as at 31

December 2015).

The voluntarily disclosed information will not be used or admitted as evidence in any criminal prosecutions and cannot form the basis of any tax investigations made against the declarant taxpayer for periods up to the end of the latest fiscal year. The voluntarily disclosed information will be used solely for the purpose of calculating the one-off tax penalty. It will not be shared with others and there will be no further enquiry by any party under any laws in Indonesia, unless directed so by the disclosing taxpayer. All governmental agencies involved in the implementation of the tax amnesty are also prohibited to disclose, disseminate, and/ or forward any data and information related to and declared by the tax subject.

continued to page 2

Volume 1, Issue 1

October 2016

Inside this issue:

Message from

Chairman

1

Joint Feature 1

Singapore 2

Indonesia, South

Korea & Vietnam

3

Thailand , Philippines &

Hong Kong

4

Malaysia, Taiwan,

Indochina

5

Quick Glance 6

About APG 6

ASEAN PLUS GROUP NEWSLETTER

On 1 July 2016, Indonesian lawmakers enacted the Tax Amnesty Law. Tax amnesty will be effective from 1 July 2016 – 31 March 2017.

In principle, all Indonesian tax subjects are eligible to apply for tax amnesty except in the following circumstances where the tax subject is: >> being investigated for any tax related offences and such investigations have been declared by the Indonesian State Attorney as complete or are pending the court process; or >> involved in a tax-related

criminal sanction process.

Through the Tax Amnesty Law, the Indonesian tax authorities are offering Indonesian taxpayers to voluntarily declare any previously undeclared assets which they own and to pay a one-off tax penalty at a concessionary redemption rate. The Tax Amnes-

diversity of the different legal systems presents challenges. We are here for you.

Azman Jaafar Deputy Managing Partner Head, Corporate Practice RHTLaw Taylor Wessing LLP Chairman, ASEAN+

2

continued from page 1

For ongoing tax crime investigations of Indonesian taxpayers, by voluntarily disclosing information about his/her undeclared assets, it will translate into a discontinuation of investigations being conducted on that individual.

The efficacy of the Tax Amnesty Law is yet to be tested and its take-up rate remains to be seen. From the perspective of the Indonesian tax authorities, it may be that achieving their

objectives through the Tax Amnesty Law would be much easier than the Automatic Exchange of Information (“AEOI”) pro-cess, given that the taxpay-ers would in this case come forward, volunteer the information, pay the relevant (discounted) dues and in some cases also repatriate assets back to Indonesia.

For the AEOI process (when it is implemented), the Indonesian tax authorities will need to rely on the

information provided to them by a foreign tax authority and will thereafter have to locate the errant taxpayers in order to prosecute them to recover any unpaid taxes.

Given that there will be a gap of some 17 months between the lapsing of the Tax Amnesty Law to the first exchange of information under the AEOI commitment made by Indonesia, there is a possibility that the Indonesian government may extend the end date of the

Singapore– RHTLaw TaylorWessing

The perceived lack of political clout in relation to the South China Sea dispute should not be confused as a lack of political will to pursue the agenda of economic integration. Asean leaders recognise the economic benefits that regional integration will bring to its people. It is only a question of when - and not if - the AEC will be fully implement-ed. To this end, Asean has given itself to the year 2025 to achieve the vision of a highly integrated and cohesive regional economy.

SMEs in Singapore should remain confident of the positive outlook in the region. The Asean leadership has shown its com-mitment in pursuing deeper re-gional integration by constantly seeking ways to improve connectivity. Action plans issued by the Asean leadership are increasingly more detailed and definitive. Efforts in engaging the private sector, in response to survey findings which showed a general lack of awareness of the AEC within the business community, have also increased.

The Asean leadership views the development and progress of SMEs to be an essential aspect of the regional integration agenda. To this end, Asean has already implemented action plans to support Asean SMEs. Recent initiatives include the Asean Technology and Business Incubator and the Asean SME Guidebook.

The Asean focus on the development of SMEs complements our national initia-tives to support Singaporean SMEs, by both government and non-government bodies. The provision of financial support to SMEs has always been a key item in the Singapore government's Budget

Non-government entities are also stepping up support for SMEs as part of their corporate social

responsibility. For example, OCBC Bank has been very active in supporting its SME customers through financial and non-financial initiatives.

While there is still more to be done to lower non-tariff barriers in the AEC, the virtually zero-tariff environment today provides the impetus for Singapore SMEs to move production to Asean member states with lower production costs. With the streamlining of customs procedures, the costs of outsourcing will be reduced further.

SMEs engaged in the high-value services and investment sectors would benefit from the progressive implementation of initiatives towards freer movement of capital and services. In addition, improving infrastructure and education levels, and a rising middle class in emerging Asean economies are also motivating SMEs to expand into the region.

One of the fast-emerging markets in Asean today is Vietnam, where a "tech boom" is manifested by the rise in the number of high-technology parks and the emergence of a thriving tech startup sector. If these trends continue, Vietnam will soon realise its ambition to be the "Silicon Valley" of South-east Asia.

Likewise, Myanmar, considered to be among the "last frontier" economies in Asia, has pursued political and economic reforms that are fast attracting foreign investment. Indonesia, the largest economy in South-east Asia,

Other macro-economic factors are also sharpening the international investment focus on the Asean region. Rising manu-facturing costs in China are driving foreign investors

ASEAN’s regional integration: Look beyond the South China

Sea

by Azman Jaafar

Business Times, Aug 30, 2016

Recent developments have not been too kind to Asean's efforts towards regional economic integration, but small and medium enterprises (SMEs) in Singapore should not lose faith in the region and the vision of the Asean Economic Community (AEC).

The Brexit vote in the United Kingdom and anti-globalisation rhetoric from the United States may have indirectly affected Asean's integration efforts by making the political conditions for integration more challenging. Asean's recent struggle to find common ground in the South China Sea dispute has raised questions about the unity and political will of Asean leadership

Despite the challenges, there is a silver lining in these develop-ments. We must understand that Asean is a unique regional grouping unlike the European Union (EU). Asean member states retain national sovereign-ty. Asean does things the "Asean Way", with consultation and consensus as its central pillars. Without unanimous agreement, no decision or action will be made or taken by Asean.

Despite criticisms, the Asean Way has been credited with fostering close economic and socio-political cooperation in a region that is far more diverse in culture, religion and ethnicity than any other part of the world. Over the course of time from its inception in 1967, Asean has emerged as the most successful regional economic cooperation outside of the EU with trade growing from US$123.8 billion in 1995 to US$609 billion in 2013.

Volume 1, Issue 1

southwards. The uncertainty in Europe following Brexit, and the possibility of the establishment of mega-regional free trade areas through the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership have also put Asean under the spotlight.

Singapore SMEs are well placed to draw on the potential of the AEC, given the strong reputation that goes with the Singapore brand and Asean. Singapore SMEs need to constantly monitor regional trends and develop-ments so as to capitalise and leverage them. Economic integration will bring about not only greater opportunities and market access but also unprecedented levels of competition within the region. Singapore SMEs must constantly innovate and review their strategies, or risk falling behind.

While the concrete steps have been taken towards deeper economic integration at the government-to-government level, it may take a longer time for the reality on the ground to reflect the effects of the establishment of the AEC. The private sector is a key driver of Asean economic growth and integration. SMEs form the backbone of the Singapore economy.

The road to regionalisation can be very painful for SMEs without adequate professional support. To facilitate the various initiatives, professional advisers must also be ready and willing to support the integration agenda. The ability to deliver multi-jurisdictional practical and specialized advice to our SMEs will give them the edge in their expansion into Asia.

Tax Amnesty Law. In the meantime, it is likely that the Indonesian government will continue to put in place all that is required to get it ready to meet its commitments for the purposes of implementing AEOI in 2018. This would send a clear signal to the Indonesian taxpayers that the Tax Amnesty Law may be their last chance at regularizing any legacy accounts before AEOI kicks in.

3

Widely called the Kim Young-ran Act after the official who first proposed it, the law sets the maximum amount one can spend on a meal provided to an official, reporter, teacher or his or her spouse at KRW 30,000 (USD 27). Presents may not exceed KRW 50,000 (USD 45) in value and traditional cash gifts at social events are set at KRW 100,000 (USD 90). Speaking fees are capped between KRW 200,000 (USD 180) and KRW 500,000 (USD 450), depending on rank. The law also prohibits targeted individuals from receiving more than KRW 3 million won (USD

South Korea’s new anti-corruption law proceeding on

schedule

After South Korea’s Constitutional Court rejected challenges from the local Bar on July 28 and the Cabinet gave approval on September 6, the Anti-Corruption and Bribery Prohibition Act is set to take effect this month. Police will grant no grace period, deeming the time between the National Assembly’s March 27, 2015, adoption and the coming Sep-tember 28 implementation sufficient for compliance.

South Korea– DR & AJU

Indonesia– Hanaf iah Ponggawa & Par tners

(Persero) Tbk (“Jasa Marga”), an Indonesian state owned enter-prise which is engaged in plan-ning, building, operating and maintaining toll roads, requires substantial funding to continue its expansion of the toll roads in the government program for 1,000 kilometers of new toll roads. To this end, Jasa Marga will enlarge its capital structure by an equity increase through a rights issue of IDR 1.8 trillion (equivalent to USD 136 million) with Rp1.250 trillion additional capital from the Government, which issue is scheduled for completion at the end of 2016.

In addition to the increase of

capital and the company’s capacity for business expansion, the funds of the rights issue will be used to enhance the company’s ability to receive financing from banks and other financial institutions.

In this Jasa Marga corporate action, the HPRP Capital Market team, led by Partner Erwin Kurnia Winenda, and assisted by Ishak Ricardo Pasaka (Senior Associate), Yohanes (Associate), and Antonio Adiel Nugra-ha (Associate), has been ap-pointed by Jasa Marga to be its capital market legal advisor. HPRP has been requested to assist Jasa Marga in legal aspects of its right issue in

HPRP Engaged by Jasa Marga to Provide Legal Assistance

on Rp1.8 trillion Rights Issue

The Government and Parliament of the Republic of Indonesia have approved the Amended State Budget for 2016 (APBN-P 2016) in which the government will increase its capital in 21 state owned enterprises, including 4 state owned enter-prises which are listed on the Indonesian Stock Exchange (IDX). The capital increase will be used for expansion of the enterprises to support infrastructure development in Indonesia. One of the state owned enterprises which are listed on IDX, PT Jasa Marga

Volume 1, Issue 1

accordance with capital market regulations, regulations of the Financial Services Authority and the standards for capital market transactions.

HPRP’s financial services practice group has been successfully assisting many financial transactions, both local and international. Recently the team assisted with various transactions related to natural resources, infrastructure and real property. Please contact [email protected] or [email protected] for further details.

2,703) in gifts annually, whether or not any influence peddling is proven. Penalties reach KRW 3 mil. (USD 2,703) in fines or

three years in prison and apply to Koreans and non-residents. Controversially, the law exempts National Assembly members and is at times vague about who specifically is targeted.

RHTLaw TaylorWessing Vietnam on Smithsonian Entrepreneur Incubator

training

On 24 August 2016 RHTLaw TaylorWessing Vietnam co-facilitated a training session to share experiences on the strategies of starting-up right in Vietnam. The goal was to acquaint trainees on the different strategies in establishing businesses the right way. The trainees were briefed on the relevant aspects of the Law on Enterprises, Law on Investment and Law on Intellectual Property.

Of interest to the trainees were the practical aspects of starting up businesses and especially the role that the licensing authorities played in the process. Three different case studies were shared to illustrate and reinforce the points made and these were very well received. Trainees were given the opportunity of

raising issues to clarify their understanding of how business was carried out in Vietnam. Finally, we presented the practical and legal aspects relevant to start-ups in the pro-tection of intellectual property rights which they would develop and which would be crucial to their success. It was clear from the training course that globaliza-tion posed new challenges never before faced in Vietnam and so the goal and focus of the training was to equip the trainees with the basic knowledge and under-standing of the challenges they would face in their careers and how these could be resolved. This was the best takeaway for the trainees.

The Smithsonian Entrepreneur Incubator training program is organized by HATCH! Their mission is to promote effective entrepreneurship. HATCH! has become the go-to resource for entrepreneurship in Vietnam

since 2012 and has supported nation-wide, over 100 companies and over 10,000 entrepreneurs. In 2016, HATCH! expanded its reach through continued ecosystem building, sustainable co-working spaces and rigorous incubation programs. RHTLaw Taylor-Wessing Vietnam is therefore proud to be involved in this aspect of Vietnam’s development and keen to assist in and promote this crucial and vital

Vietnam– RHTLaw TaylorWessing Vie tnam

space. The training program was also organized by HATCH! in association with The American Center – US Embassy in Hanoi. The program commenced in July 2016 and will continue till October 2016. This training offers unique experiences to learn key skills to start businesses the right way. Participants of this training class are on-going and potential entre-preneurs.

4

Investment Restrictions in Specific Laws Governing Adjustment Companies, Lending Companies, Financing Companies and Investment Houses cited in the Foreign Investment Negative List and for Other Purposes”, lapsed into law on July 17, 2016. This law lifted the nationality requirements for adjustment, lending and financing companies, and invest-ment houses.

Prior to RA No. 10881, foreign nationals may only own up to forty percent (40%) of capital in

No More Restrictions on Foreign Ownership in Philippines’ Finance

Companies

To further promote foreign investments in the Philippines, foreign nationals are now allowed to own up to one hundred percent (100%) equity in adjustment, lending and financing companies, and investment houses in the coun-try.

Republic Act (RA) No. 10881, entitled “An Act Amending

adjustment companies, forty-nine percent (49%) of the voting stock in lending companies, and sixty percent (60%) of the voting stock in financing companies and investment houses.

However, nationality restrictions on certain transactions are still applicable to these entities. For example, finance companies incorporated in the Philippines with more than forty percent (40%) foreign equity cannot own land in the Philippines.

Aside from the Philippine

Phi l ipp ines: Vi l la raza & Angangco

Thai land– Siam Ci ty Law Off ices

“Improve and Develop our Practice”. This was very well received by our lawyers and they had a very good presentation by the partners on developing their career pathway. Both our Managing partner and our senior partner gave an impressing inter-view on the development of the Thai legal sector, covering issues such as corporate law and general legal approaches, for the Asean Economic Community (“AEC”), with AsiaWeek’s special report. In addition to that our partner Mr Vira Kammee delivered a presentation relating to real

estate in the prestigious LawAsia Annual Conference in Sri Lanka as well as being a key note speaker at a local university on the subject of “Challenges and Opportunities of being an Asean Lawyer”.

Current Business Trends Thailand’s growth remains quite promising in that there is focus on expanding its infrastructure, with the construction of the High Speed Train system which is expected to be gradually operat-ed and would be in full operation by 2021. Another issue of significant is the increase in production of consumer products with the aim is to increase export of domestic products to CLMVT countries. Events We have had a very successful in house seminar for lawyers on

Volume 1, Issue 1

New Partner We have a new partner joining us in the 4th quarter of this year Ms. Sorraya Boonsongprasert who is conversant with Transfer Pricing (TP) and will be joining our Tax team in October.

Securities and Exchange Commission, adjustment companies are also regulated by the Philippine Insurance Commission while lending and financing companies, and investment houses are also regulated by the Bangko Sentral ng Pilipinas or the central bank of the Philippines.

Hong Kong corporate law firm HM Chan & Co announced an official association with International law firm, Taylor

Wessing on 11 July 2016

HM Chan & Co is a Hong Kong corporate law firm established in May 2015 by professionals with years of experience in handling international transactions. The firm specialises in helping clients at all stages of the business life cycle - from development and seed funding of start-ups via private equity or venture capital investment, to growth and restructuring through public or private M&As, and fund raising through IPOs, secondary listings or equity or debt financing. The team also assists listed companies in their post-listing regulatory and compliance

matters, restructurings and investments while delivering a wide range of advice on corporate, M&A, capital markets and regulatory and compliance matters to clients.

Through the association, Taylor Wessing and HM Chan & Co continue to deliver corporate advisory work with a focus on assisting clients in multi-jurisdictional transactions, a core competence of the team. The combined team comprises Hong Kong and German qualified lawyers fluent in English, German, Cantonese and Mandarin, who understand the commercial and financial context of deals and can therefore better help clients achieve their goals in a timely manner.

Hong Kong– H.M. Chan & Co.

5

Intellectual Property Practitioner of the Year, Taiwan.

Amendments to Laws

On June 17, 2016, the Taiwan Fair Trade Commission (TFTC) published the amendments to the Guidelines on Handling Cases Involving Trade Associations and Other Organizations, which took effect on same date. The amendment not only adjusts relevant content according to the Taiwan Fair Trade Act, but also revises the list of activities conducted by trade associations or other organizations that may constitute cartel activities based on the TFTC’s previous case precedents. Other activities that

Awards & Achievements

Since July 2016, Lee & Li has received the awards of TMT News – Top 25 in IP – 2016; APAC Insider 2016 Legal Awards – Award for Excellence In Chinese Patent & IP Law – Taiwan; APAC Insider 2016 Legal Awards – Best Full-Service Law Firm – Taiwan; Corporate Vision’s Dispute Distinction awards – Regional Dispute Distinction Awards 2016; Acquisition International’s Distinguished in Dispute Resolution – Distinguished in Dispute Resolution 2016; Global 100 - 2016 Patents Law Firm of the Year - Taiwan; Wealth & Finance Most Outstanding Law Firm of 2016, Taiwan; and 2016

may result in a restrictive impact on competition are also added.

The amendment to the Mergers and Acquisitions Act (the "New Mergers and Acquisitions Act") came into effect on January 8, 2016. Under the New Mergers and Acquisitions Act, a company is given more options for paying consideration for share exchanges or de-mergers (spin-offs); in other words, a company may use cash or other types of assets as consideration for share exchanges or de-mergers (spin-offs) without having to issue any new shares, which aims to encourage M&A activities in Taiwan.

Taiwan: Lee and L i

Malays ia– Azmi & Associa tes

Companies Bill Passed in

Parliament

4th April 2016 marks the start of a sea change in the Malaysian corporate scene, with the passing by the Parliament of the Companies Bill 2015 (“New Companies Act”).

Volume 1, Issue 1

brought into force within a year or so, in order to allow for relevant regulations, rules and guidelines to be set in place.

The business landscape in Malaysia will certainly change from the implementation of the New Companies Act.

The New Companies Act seeks to modernize company law in Malaysia making it in line with the company laws from other developed jurisdictions, to cater for the increasingly challenging business environment.

It is believed that the New Companies Act itself will only be

The New Companies Act was drafted to achieve 4 basic objectives:

VDB Loi was formed in Phnom Penh (Cambodia) early in 2012 by founding partner Jean Loi, a tax and regulatory specialist with over 12 years of experience in Indochina, Myanmar and Singapore. The Firm has ex-panded regionally and it now has offices in Phnom Penh, Vienti-ane, Yangon and Nay Pyi Taw.

APG pleased to announce that VDB Loi, a leading firm with offices in Myanmar, Cambodia and Laos, has joined our

ASEAN Plus Group.

This latest addition is consistent with ASEAN Plus Group’s aim to be the 1st choice among clients for providing quality, responsive and integrated legal advice in the ASEAN+ countries.

VDB Loi offers a unique combination of highly experienced transactional lawyers and specialist tax advisers.

This combination is unique and highly effective for transactions in M&A, FDI, mining & resources, real estate, energy and infrastructure, telecom and top-end tax structuring.

Indochina– Laos, Cambodia & Myanmar: VDB Loi

6

Six Battery Road

#10-01

Singapore 049909

Phone: +65 6381 6868

Fax: +65 6381 6869

We aim to be the 1st choice among clients for providing quality, responsive

and integrated legal advice in the ASEAN+ countries.

The APG firms have a strong presence in Asia with offices located in Singapore, Indonesia, Vietnam, Korea, Philippines, Thailand, Taiwan, Malaysia, Laos, Cambodia, Myanmar and Hong Kong. Our APG is a group of full -service and well- established law firms, with strong

local knowledge and international expertise.

Collectively the group represents top Asian companies, ranging from early stage business-

es to some of the foremost conglomerates and brands in the world. We are able to handle

the most complex regional and cross border transactions and to give clients seamless ac-

cess to integrated legal service in this region.

A S E A N P l u s G r o u p

The M ember F i rms

For more details, please visit

www.aseanplusgroup.com

Quick Glance

Adapted from:

Fact Sheet– ASEAN Economic

Community

Jakarta: ASEAN Secretariat,

April 2016