For more information, contact:

Brett Cowell
[email protected]

Thomas Hill
[email protected]

Australian Foreign Investment and Merger Approvals: Understanding FIRB and ACCC Requirements

Australia has a mandatory notification regime both for acquisitions of Australian land, entities and assets by foreign persons and for acquisitions and mergers that are of a size that may have adverse effects on competition in Australia. Both notification regimes are subject to certain monetary thresholds.

Understanding whether Foreign Investment Review Board (FIRB) approval, Australian Competition and Consumer Commission (ACCC) clearance, or both are required is an important consideration when structuring and timing an acquisition in Australia.

When is FIRB approval required in Australia?

The Australian Foreign Acquisitions and Takeovers Act 1975 regulates foreign acquisition of Australian land, entities and assets. The Federal Treasury and the Australian Taxation Office administer the regime and are advised by the Foreign Investment Review Board (FIRB).

Prior to foreign persons acquiring Australian land, securities in entities, or assets above certain monetary thresholds, they are required to receive no-objection notifications from Treasury. This is colloquially referred to as “FIRB approval”.

The monetary thresholds are based on the type of asset being acquired and its significance to national security or the national interest. Thresholds also differ based on the origin of the investor due to certain Free Trade Agreements.

Investors that are foreign governments or have foreign government involvement require FIRB approval for all acquisitions, regardless of monetary value.

Which Australian assets are most restricted for foreign investors?

The most restricted assets in Australia are residential land assets. There is currently a general prohibition on acquisitions of established dwellings in Australia by foreign investors, with very limited exceptions. Most applications for established residential assets in Australia will be rejected.

Other sensitive assets include:

• national security land;
• national security businesses;
• media businesses;
• mining tenements; and
• undeveloped commercial land.

These each generally carry a $0 monetary threshold, meaning actions in these areas may require FIRB approval regardless of the value of the proposed acquisition.

“National security” in this context typically means that the acquisition involves defence or defence-related products or services, as well as critical infrastructure.

Applying for FIRB approval

Applications are made through the Foreign Investment Portal and can be made by an investor directly or by an adviser.

Application fees are dependent on the value of the acquisition. For example, acquisitions of AUD$50 million or less attract an AUD$15,600 fee and acquisitions of AUD$100 million or less attract an AUD$31,300 fee, unless the acquisition is of agricultural or residential land, which have higher fees relative to acquisition value.

FIRB approvals typically take between four and six weeks. However, the timeframe for approval depends on a number of factors, including the nature of the investor, the asset being acquired and whether the proposed transaction raises national interest or national security considerations.

What happens if a foreign investor does not comply with FIRB requirements?

Non-compliance with Australia’s foreign investment regime can attract significant penalties, including monetary fines and forced divestment. More serious contraventions may also carry terms of imprisonment as a maximum penalty.

When is ACCC merger clearance required in Australia?

Competition law in Australia is administered by the Australian Competition and Consumer Commission (ACCC).

Under the Australian Competition and Consumer Act 2010 (Act), acquisitions are prohibited where they would have the effect, or be likely to have the effect, of substantially lessening competition in any market.

Prior to 1 January 2026, transaction parties could voluntarily notify a transaction to the ACCC and obtain either in-principle advice, on a non-binding basis, that their transaction would not breach the Act, or a merger authorisation that authorised the transaction and provided immunity from prosecution under the relevant provisions of the Act.

Since 1 January 2026, a new mandatory notification regime has applied. Transacting parties are now required to notify a transaction to the ACCC where certain monetary thresholds are met.

The ACCC reviews the transaction and its likely effects on markets in Australia and may approve the proposed transaction, with or without conditions, or reject it.

The ACCC merger notification thresholds

The most common monetary threshold is where the merger parties have combined Australian revenue of at least AUD$200 million and either:

• the target’s Australian revenue is at least AUD$50 million; or
• the global transaction value is at least AUD$250 million.

There are additional thresholds applying to acquisitions by very large entities of smaller targets, as well as separate cumulative thresholds for creeping or serial acquisitions.

Accordingly, parties considering an Australian acquisition should assess the ACCC notification requirements early in the transaction process rather than relying solely on the size of the immediate acquisition.

What happens after an acquisition is notified to the ACCC?

If a transaction is required to be notified to the ACCC, the review generally takes place in two parts.

Phase 1 ACCC review

Phase 1 includes publication of details of the notification on the acquisitions register and a 15-business-day period for third parties to comment on the proposed acquisition.

Phase 1 reviews typically take approximately six weeks in total.

Phase 2 ACCC review

If, during Phase 1, the ACCC considers that the acquisition could be likely to substantially lessen competition, it may require a Phase 2 assessment.

Phase 2 involves a more in-depth assessment of the acquisition by the ACCC. It is intended that only a relatively small number of matters will require a Phase 2 assessment.

A Phase 2 assessment can take up to an additional 12 weeks.

The application fee for a Phase 1 notification is AUD$56,800.

If a Phase 2 assessment is required, the fee ranges from AUD$475,000 for transactions valued at AUD$50 million or less.

Parties may also apply for a notification waiver.

A waiver provides a streamlined application process aimed at acquisitions that do not raise material risks to competition or consumers. Notification waiver applications cost AUD$8,300.

The timeframe for granting a notification waiver is typically 25 business days, or approximately five weeks.

All transactions notified to the ACCC, including waiver applications, are included in a public register.

How the new Australian merger regime operates in practice

While the mandatory merger notification regime has not been in place for long, many transactions have been successfully dealt with through waiver applications and the large majority of transactions notified to the ACCC have only required a Phase 1 assessment.

This highlights the importance of considering the potential competition implications of a proposed transaction at an early stage so the appropriate notification pathway can be incorporated into transaction planning.

What if an acquisition falls below the ACCC notification thresholds?

Transactions that fall below the mandatory notification thresholds are still subject to the provisions of the Act prohibiting acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market.

Parties to a transaction that falls below the mandatory thresholds can therefore still voluntarily notify their acquisition to the ACCC for clearance where competition concerns may arise.

Penalties for breaching Australian competition laws

Non-compliance with Australian competition laws can attract significant consequences, including monetary penalties and forced divestment. More serious contraventions may carry terms of imprisonment as a maximum penalty.

Do you need FIRB approval, ACCC clearance or both?

FIRB and ACCC requirements address different regulatory considerations and can both apply to the same transaction.

Foreign investors and parties to mergers or acquisitions involving Australian businesses or assets should therefore consider both regimes at an early stage of the transaction. FIRB and ACCC approval requirements can have a material impact on transaction structure, conditions precedent, regulatory risk and the timing of completion.

For advice on the FIRB and ACCC implications of a proposed acquisition, merger or investment in Australia, please contact Brett Cowell, Director, or Thomas Hill, Senior Associate, in Cowell Clarke’s Corporate Team. Our team can assist with assessing notification requirements, transaction structuring and navigating the relevant regulatory approval processes.

For more information, contact:

Brett Cowell
[email protected]

Thomas Hill
[email protected]

Australian Foreign Investment and Merger Approvals: Understanding FIRB and ACCC Requirements

Australia has a mandatory notification regime both for acquisitions of Australian land, entities and assets by foreign persons and for acquisitions and mergers that are of a size that may have adverse effects on competition in Australia. Both notification regimes are subject to certain monetary thresholds.

Understanding whether Foreign Investment Review Board (FIRB) approval, Australian Competition and Consumer Commission (ACCC) clearance, or both are required is an important consideration when structuring and timing an acquisition in Australia.

When is FIRB approval required in Australia?

The Australian Foreign Acquisitions and Takeovers Act 1975 regulates foreign acquisition of Australian land, entities and assets. The Federal Treasury and the Australian Taxation Office administer the regime and are advised by the Foreign Investment Review Board (FIRB).

Prior to foreign persons acquiring Australian land, securities in entities, or assets above certain monetary thresholds, they are required to receive no-objection notifications from Treasury. This is colloquially referred to as “FIRB approval”.

The monetary thresholds are based on the type of asset being acquired and its significance to national security or the national interest. Thresholds also differ based on the origin of the investor due to certain Free Trade Agreements.

Investors that are foreign governments or have foreign government involvement require FIRB approval for all acquisitions, regardless of monetary value.

Which Australian assets are most restricted for foreign investors?

The most restricted assets in Australia are residential land assets. There is currently a general prohibition on acquisitions of established dwellings in Australia by foreign investors, with very limited exceptions. Most applications for established residential assets in Australia will be rejected.

Other sensitive assets include:

• national security land;
• national security businesses;
• media businesses;
• mining tenements; and
• undeveloped commercial land.

These each generally carry a $0 monetary threshold, meaning actions in these areas may require FIRB approval regardless of the value of the proposed acquisition.

“National security” in this context typically means that the acquisition involves defence or defence-related products or services, as well as critical infrastructure.

Applying for FIRB approval

Applications are made through the Foreign Investment Portal and can be made by an investor directly or by an adviser.

Application fees are dependent on the value of the acquisition. For example, acquisitions of AUD$50 million or less attract an AUD$15,600 fee and acquisitions of AUD$100 million or less attract an AUD$31,300 fee, unless the acquisition is of agricultural or residential land, which have higher fees relative to acquisition value.

FIRB approvals typically take between four and six weeks. However, the timeframe for approval depends on a number of factors, including the nature of the investor, the asset being acquired and whether the proposed transaction raises national interest or national security considerations.

What happens if a foreign investor does not comply with FIRB requirements?

Non-compliance with Australia’s foreign investment regime can attract significant penalties, including monetary fines and forced divestment. More serious contraventions may also carry terms of imprisonment as a maximum penalty.

When is ACCC merger clearance required in Australia?

Competition law in Australia is administered by the Australian Competition and Consumer Commission (ACCC).

Under the Australian Competition and Consumer Act 2010 (Act), acquisitions are prohibited where they would have the effect, or be likely to have the effect, of substantially lessening competition in any market.

Prior to 1 January 2026, transaction parties could voluntarily notify a transaction to the ACCC and obtain either in-principle advice, on a non-binding basis, that their transaction would not breach the Act, or a merger authorisation that authorised the transaction and provided immunity from prosecution under the relevant provisions of the Act.

Since 1 January 2026, a new mandatory notification regime has applied. Transacting parties are now required to notify a transaction to the ACCC where certain monetary thresholds are met.

The ACCC reviews the transaction and its likely effects on markets in Australia and may approve the proposed transaction, with or without conditions, or reject it.

The ACCC merger notification thresholds

The most common monetary threshold is where the merger parties have combined Australian revenue of at least AUD$200 million and either:

• the target’s Australian revenue is at least AUD$50 million; or
• the global transaction value is at least AUD$250 million.

There are additional thresholds applying to acquisitions by very large entities of smaller targets, as well as separate cumulative thresholds for creeping or serial acquisitions.

Accordingly, parties considering an Australian acquisition should assess the ACCC notification requirements early in the transaction process rather than relying solely on the size of the immediate acquisition.

What happens after an acquisition is notified to the ACCC?

If a transaction is required to be notified to the ACCC, the review generally takes place in two parts.

Phase 1 ACCC review

Phase 1 includes publication of details of the notification on the acquisitions register and a 15-business-day period for third parties to comment on the proposed acquisition.

Phase 1 reviews typically take approximately six weeks in total.

Phase 2 ACCC review

If, during Phase 1, the ACCC considers that the acquisition could be likely to substantially lessen competition, it may require a Phase 2 assessment.

Phase 2 involves a more in-depth assessment of the acquisition by the ACCC. It is intended that only a relatively small number of matters will require a Phase 2 assessment.

A Phase 2 assessment can take up to an additional 12 weeks.

The application fee for a Phase 1 notification is AUD$56,800.

If a Phase 2 assessment is required, the fee ranges from AUD$475,000 for transactions valued at AUD$50 million or less.

Parties may also apply for a notification waiver.

A waiver provides a streamlined application process aimed at acquisitions that do not raise material risks to competition or consumers. Notification waiver applications cost AUD$8,300.

The timeframe for granting a notification waiver is typically 25 business days, or approximately five weeks.

All transactions notified to the ACCC, including waiver applications, are included in a public register.

How the new Australian merger regime operates in practice

While the mandatory merger notification regime has not been in place for long, many transactions have been successfully dealt with through waiver applications and the large majority of transactions notified to the ACCC have only required a Phase 1 assessment.

This highlights the importance of considering the potential competition implications of a proposed transaction at an early stage so the appropriate notification pathway can be incorporated into transaction planning.

What if an acquisition falls below the ACCC notification thresholds?

Transactions that fall below the mandatory notification thresholds are still subject to the provisions of the Act prohibiting acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market.

Parties to a transaction that falls below the mandatory thresholds can therefore still voluntarily notify their acquisition to the ACCC for clearance where competition concerns may arise.

Penalties for breaching Australian competition laws

Non-compliance with Australian competition laws can attract significant consequences, including monetary penalties and forced divestment. More serious contraventions may carry terms of imprisonment as a maximum penalty.

Do you need FIRB approval, ACCC clearance or both?

FIRB and ACCC requirements address different regulatory considerations and can both apply to the same transaction.

Foreign investors and parties to mergers or acquisitions involving Australian businesses or assets should therefore consider both regimes at an early stage of the transaction. FIRB and ACCC approval requirements can have a material impact on transaction structure, conditions precedent, regulatory risk and the timing of completion.

For advice on the FIRB and ACCC implications of a proposed acquisition, merger or investment in Australia, please contact Brett Cowell, Director, or Thomas Hill, Senior Associate, in Cowell Clarke’s Corporate Team. Our team can assist with assessing notification requirements, transaction structuring and navigating the relevant regulatory approval processes.

For more information, contact:

Paula Boast
[email protected]

Dana Marshad
[email protected]

Inbound Investment Regulation: Middle East Capital Flows into Asia

As Gulf Cooperation Council (GCC) sovereign wealth funds and private investors increasingly direct capital towards Asian markets, the regulatory landscape governing these cross-border flows has become a critical focus for practitioners. The UAE, Bahrain, and Saudi Arabia—the Middle East’s most active outbound investors—have each undergone significant domestic reform in recent years, while Asian host jurisdictions have simultaneously tightened their foreign direct investment (FDI) screening regimes. This article examines the current regulatory framework on both sides of the corridor and the practical implications for Middle East investors deploying capital into Asia.

The Gulf Regulatory Backdrop: Liberalisation as a Springboard

The general trend across the Middle East continues toward an investment-friendly environment, as governments seek to attract more foreign investment while encouraging their own investors to diversify internationally. This domestic liberalisation directly affects outbound investment: the more open and sophisticated a jurisdiction’s framework becomes, the more its investors engage with complex regulatory environments abroad.

Bahrain sits at the more liberal end of the GCC’s FDI spectrum and has steadily loosened foreign ownership restrictions over the past several years. The dominant trend has been clear and sustained liberalisation of FDI entry rules, with successive reforms from 2023 to 2025 opening more sectors to full foreign ownership and reducing capital thresholds.

Key milestones illustrate the pace of reform. In May 2019, Bahrain allowed 100 per cent foreign ownership in oil and gas extraction under certain production-sharing agreements. In April 2023, it launched the “Golden Licence” programme to attract large-scale domestic and foreign investment. The programme aims to streamline business licensing and company set-up, expedite permit approvals, exempt raw materials and equipment from import duties, provide preferential access to land, infrastructure, and utilities, and offer regulatory flexibility to investors. In October 2024, foreign companies were permitted to sell certain goods without a local partner and fully own their businesses if they operated in at least ten countries or generated annual revenues above EUR 750 million. The minimum capital requirement for wholly foreign-owned companies was also significantly reduced, from BHD 2 million (approximately USD 5.3 million) to BHD 100,000 (approximately USD 265,000). In November 2025, further activities were opened to unconditional 100 per cent foreign ownership, including electric power generation, electric power transmission and distribution, management and operation of ports and private jetties, data monitoring and data protection consultancy, and real estate brokerage.

In September 2025, Bahrain introduced a comprehensive reform of the Commercial Companies Law, bringing more flexible corporate structures—including single-shareholder closed joint-stock companies—and enhanced mechanisms for investor control. Bahrain has also developed key industrial and free zones, including the Bahrain Logistics Zone, the Bahrain International Investment Park, and the Bahrain International Airport Free Zone, where companies benefit from 100 per cent foreign ownership, customs duty exemptions, and sector-focused support.

Such reforms have contributed to the entry of major Asian and European corporations, including Trina Solar, Jinko Solar, Shanghai Electric, China Machinery Engineering Corporation, and TBEA. They have also led global multinationals to establish operations in Bahrain and export to markets such as China and Japan (e.g., Arla Foods).

Saudi Arabia has enacted the most transformative reform. The new Investment Law (Royal Decree No. M/19), which entered into force on 12 February 2025, replaced the former Foreign Investment Law of 2000 with a unified framework applicable to local and foreign investors alike. The law eliminates the historic distinction between Saudi and non-Saudi investors, replacing the licensing regime with a streamlined registration process administered by the Ministry of Investment (MISA). The Implementing Regulations, issued in April 2025, further detail broad protections, including the right to transfer funds freely, fair and equitable treatment, and access to alternative dispute-resolution mechanisms such as arbitration and mediation. For Saudi investors looking outward, this modernised domestic framework enhances credibility and institutional alignment with the standards expected by Asian host regulators. Meanwhile, Saudi Arabia’s amended foreign investment rules, effective 1 February 2026, opened the Tadawul Main Market to all foreign investors, eliminating the “Qualified Foreign Investor” concept—a signal of the Kingdom’s broader reciprocal investment ambitions.

The UAE has pursued a parallel path. Since 2 January 2022, the Commercial Companies Law has permitted 100 per cent foreign ownership of mainland companies, with exceptions only for activities with a strategic impact. Recent reforms have further blurred the mainland–free-zone divide: pursuant to Dubai Executive Council Decision No. 11/2025, certain free-zone companies may now operate on the Dubai mainland by obtaining a licence from the Dubai Department of Economy and Tourism. Critically, the UAE ranked second globally (behind only the United States) in greenfield FDI announcements in 2024, and its National Investment Strategy 2031 aims to more than double FDI from AED 112 billion to AED 240 billion by 2031. The UAE’s expanding network of Comprehensive Economic Partnership Agreements (CEPAs) with Asian partners—including India, Indonesia, and others—also reinforces the treaty infrastructure underpinning bilateral investment flows.

Asian FDI Screening: Growing Complexity for Gulf Investors

On the receiving end, Asian jurisdictions have moved decisively toward more robust FDI screening. India has liberalised foreign investment in certain sectors—notably space—and is laying the groundwork for 100 per cent foreign investment in the insurance sector, while maintaining restrictions on investments from sensitive jurisdictions. In a significant bilateral development, India agreed to exempt Saudi Arabia’s sovereign wealth fund from certain foreign portfolio investment rules that cap a single entity’s holding at 10 per cent in any one company, reflecting deepening financial ties between the two nations.

Japan is expanding the business sectors subject to its FDI regime to secure stable supply chains and mitigate the risks of technology leakage and the diversion of commercial technologies for military use. The Republic of Korea is entering a more security-focused era of FDI regulation, with proposed amendments to the Foreign Investment Promotion Act and longer screening timelines that will require foreign investors to adopt proactive regulatory planning. China, while continuing to optimise its foreign investment environment by reducing restrictions, improving market access, and lowering thresholds for listed companies, nonetheless retains a complex approval framework. Across the region, Asia attracted roughly 40 per cent of global FDI flows in 2024, with Singapore emerging as the top destination and overtaking Hong Kong and China.

Practical Considerations for Middle East Investors

For Gulf-based investors targeting Asian markets, several practical points warrant attention. First, the loosening of FDI screening in the Middle East does not translate into an equivalent posture in Asia: mandatory filings, sector-specific approvals, and national security reviews are increasingly the norm. Second, the growing network of bilateral investment treaties and CEPAs between GCC states and Asian partners provides important protections, but investors must structure transactions with these frameworks firmly in mind. Third, Asia’s increasing scrutiny of state-linked investors, including sovereign wealth funds, means that GCC entities must be prepared for enhanced due diligence and longer review periods.

As FDI screening regimes globally enter a more mature phase and regulators develop more sophisticated approaches to detecting and reviewing foreign investments, the Middle East–Asia investment corridor will demand careful navigation. Investors who engage early with local counsel in both home and host jurisdictions will be best positioned to manage regulatory risk and capitalise on the substantial opportunities this corridor presents.

For more information, contact:

Rajarshi Chakrabarti
[email protected]

The policy will become effective only upon notification of the corresponding amendment to the NDI Rules.

Draft Foreign Investment Rules Propose a Structural Overhaul

On July 21, 2026, the Reserve Bank of India released the Draft Rules for consultation. The Draft Rules are intended to replace the NDI Rules with a shorter, principle-based and more investee-neutral framework. The consultation period closed on August 31, 2026, and the final rules are awaited.

The Draft Rules, inter alia, propose several material changes:

• “Equity” would be determined principally by its classification under applicable accounting standards, replacing the existing list of specified equity instruments.
• FDI would generally be defined as foreign investment of 10% or more in the equity of an Indian company, whether private or public, and whether listed or unlisted or of a LLP, with holdings below that threshold treated as foreign portfolio investment.
• The existing downstream-investment framework would be recast through the concept of a “foreign controlled entity”.
• A common framework would apply to a broader range of eligible investee entities, including companies, LLPs, registered investment vehicles, registered partnership firms and proprietary concerns.

External Commercial Borrowings Liberalised

The Reserve Bank of India substantially liberalised the external commercial borrowing (“ECB”) framework through the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026, effective February 16, 2026. The revised framework expands the class of eligible borrowers, including LLPs, standardises the minimum average maturity period at three years, relaxes end-use restrictions and increases the borrowing limit to the higher of USD 1 billion or 300% of the borrower’s net worth, subject to applicable conditions. The changes widen access to foreign debt capital and provide Indian businesses with greater flexibility in financing acquisitions, expansion and other permitted activities.

Nuclear Energy Remains a Sector to Watch

The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025 (“SHANTI Act”) marks a significant step towards permitting private participation in India’s nuclear-energy sector, including through Indian-incorporated joint ventures involving foreign participants. The Atomic Energy Commission has reportedly approved a draft FDI policy for the sector, which remains subject to inter-ministerial consultation, while draft implementing rules and regulations have also been released. However, the applicable foreign investment cap, entry route and sectoral conditions have not yet been operationalised under the present FDI framework. Nuclear energy sector should therefore be treated as an emerging inbound investment opportunity rather than a sector presently open to foreign investment.

Conclusion

India remains committed to attracting foreign capital but the 2026 reforms make clear that market access will increasingly depend on the identity of the investor, the source of its capital and the rights it seeks to exercise. The liberalisation of insurance, listed-market investment and export-focused e-commerce creates meaningful opportunities, while the revised land-border framework and proposed Foreign Investment Rules require closer scrutiny of upstream ownership, governance rights and downstream investment structures.

For foreign investors and their legal advisers, this calls for regulatory analysis at the outset of a transaction, not as a closing-stage compliance exercise. Ownership chains, beneficial owners, contractual rights and reporting obligations should be examined before the investment structure and transaction documents are settled. Early engagement with Indian counsel, authorised dealer banks and sectoral regulators will remain important to identifying approval requirements, avoiding execution delays and ensuring that the intended commercial rights can be exercised under Indian law.

For more information, contact:

Almaida Askandar
[email protected]

Inbound Investment Regulation in Indonesia: Key Considerations for Foreign Investors

Indonesia has continued to reform its foreign investment framework to simplify business licensing, attract foreign capital and strengthen post-investment supervision. The current regime combines a more open approach to foreign ownership with clearer requirements on investment scale, capitalization, licensing and ongoing compliance. The principal legal framework includes: (i) Law No. 25 of 2007 on Investment, as amended by Law No. 6 of 2023 on Job Creation (the “Investment Law”); (ii) Government Regulation No. 28 of 2025 on Risk-Based Business Licensing (“GR 28/2025”); (iii) Regulation of the Minister of Investment and Downstreaming/Head of Badan Koordinasi Penanaman Modal (“BKPM”) No. 5 of 2025 (“BKPM Regulation 5/2025”); and (iv) Presidential Regulation No. 10 of 2021 on Investment Business Fields, as amended by Presidential Regulation No. 49 of 2021 (the “Positive Investment List”).

Foreign Investment Vehicle

As a general rule, foreign direct investment in Indonesia must be carried out through an Indonesian limited liability company, commonly referred to as a Perseroan Terbatas Penanaman Modal Asing or “PT PMA”. The company must be established under Indonesian law and generally requires a notarial deed of establishment, legal entity approval from the Minister of Law, tax registration and a Business Identification Number or Nomor Induk Berusaha (“NIB”) through the Online Single Submission (“OSS”) system.

The corporate establishment process is further governed by Minister of Law Regulation No. 49 of 2025 on the Requirements and Procedures for the Establishment, Amendment and Dissolution of Limited Liability Company Legal Entities (“MOL Regulation 49/2025”), which became effective on 17 December 2025. Under Article 5, the establishment of a capital partnership company, including a PT PMA, is processed through a notary by electronically submitting the incorporation form through the Legal Entity Administration System (Sistem Administrasi Badan Hukum or “SABH”).

Beneficial Ownership Requirements

Beneficial ownership disclosure forms part of the PT establishment and ongoing corporate compliance framework. Under Article 6(1)(i) of MOL Regulation 49/2025, an incorporation application must be supported by beneficial ownership documents consisting of a power of attorney from the board of directors authorizing the notary to submit the beneficial ownership information, a directors’ statement identifying the beneficial owner, and the relevant individual’s written consent to act as the company’s beneficial owner.

These requirements operate alongside Minister of Law Regulation No. 2 of 2025 on Verification and Supervision of Corporate Beneficial Owners (“MOL Regulation 2/2025”). Under this regulation, companies must identify and determine their beneficial owners, verify the relevant information and report it to the Minister of Law. Companies are also required to update their beneficial ownership information annually, maintain the relevant supporting documents and complete the prescribed beneficial ownership questionnaire. Accordingly, foreign investors should consider beneficial ownership disclosure at the outset of the investment structure, particularly where the PT PMA is held through multiple offshore entities or layered ownership arrangements.

Nominee Arrangements

The Investment Law expressly prohibits nominee shareholding arrangements under which shares are held for and on behalf of another person. Such arrangements are declared null and void by operation of law. Foreign investors should therefore structure their investment within the applicable foreign ownership limits rather than relying on nominee structures intended to circumvent those restrictions.

Capitalization and Minimum Investment

One of the most significant changes introduced in 2025 concerns PT PMA capitalization. Under BKPM Regulation 5/2025, the minimum paid-up capital is generally IDR 2.5 billion per PT PMA, unless sector-specific rules require a higher amount. This should be distinguished from the minimum investment value. As a general rule, a PT PMA must maintain a total investment value exceeding IDR 10 billion, generally calculated for each five-digit Indonesian Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia or “KBLI”) code per project location, subject to the following sector-specific exceptions under Article 26(3) of BKPM Regulation 5/2025: (i) for wholesale trade (perdagangan besar), the threshold applies per four-digit KBLI prefix; (ii) for food and beverage services (jasa makanan dan minuman), the threshold applies per two-digit KBLI prefix per one location point, with location point defined at the kabupaten/kota level; (iii) for construction (jasa konstruksi), the threshold applies per four-digit KBLI prefix; and (iv) for industry producing multiple products within one production line, the threshold applies across the production line.

Paid-up capital and investment value therefore serve different purposes. The former represents equity contributed to the company, while the latter reflects the broader investment commitment for the relevant business activity. BKPM Regulation 5/2025 also provides that paid-up capital may generally not be transferred out of the company’s account for 12 months from the date of payment. The funds may nevertheless be used for permitted purposes, including asset purchases, building construction and operational activities.

Large-Scale Business Requirement

A PT PMA is generally classified as a large-scale business enterprise. Accordingly, foreign investors cannot establish a directly foreign-owned company as a Micro, Small, and Medium Enterprises (“MSMEs”). This distinction is particularly relevant for business sectors that are reserved for, or require cooperation with, Indonesian cooperatives and MSMEs.

An exception applies to certain technology-based startup businesses. Under Article 8(2) of the Positive Investment List, foreign investment in technology-based startup business fields (bidang usaha rintisan berbasis teknologi) located within a Special Economic Zone (Kawasan Ekonomi Khusus or “KEK”) may be made with an investment value of IDR 10 billion or less, excluding land and buildings. This exception provides greater flexibility for qualifying startups, while the general large-scale business requirement continues to apply to PT PMA companies outside this specific category.

Foreign Ownership and the Positive Investment List

Foreign investors must determine whether the proposed business activity is open to foreign investment and whether ownership restrictions apply. The Positive Investment List adopts a more open approach than the former Negative Investment List regime. Business activities may be fully open, subject to specific conditions or foreign ownership limits, allocated to or requiring cooperation with MSMEs, or closed to private investment.

Certain activities remain closed to investment under Article 12(2) of the Investment Law and Article 2(2) of the Positive Investment List, including: (i) gambling and casinos; (ii) cultivation and industry of Category I narcotics; (iii) capture of fish species listed in CITES Appendix I; (iv) exploitation or collection of coral from nature for building materials, aquariums, or souvenirs, including live or recently dead coral; (v) chemical weapons manufacturing; (vi) industrial chemicals and ozone-depleting substances industry; and (vii) alcoholic beverage manufacturing (KBLI 11010, 11020, and 11031) under Article 2(2)(b) of the Positive Investment List. In practice, investors should first identify the relevant five-digit KBLI code and then review the applicable foreign ownership restrictions and sector-specific regulations.

Business Licensing

Indonesia applies a risk-based business licensing system through OSS. The NIB serves as the company’s primary business identity, but additional approvals may be required depending on the risk classification and sector. These may include a Standard Certificate, business license, basic approvals and licenses supporting particular business activities. Selecting the correct KBLI is therefore critical, as it may affect foreign ownership restrictions, licensing requirements, risk classification and the calculation of minimum investment value.

Employment and Immigration

PT PMA companies are subject to Indonesian employment requirements, including obligations to prioritize Indonesian workers and support the development of their competencies. Where foreign workers are employed, companies are also required to facilitate training and the transfer of knowledge and technology to Indonesian counterpart employees.

The employment of foreign workers is generally subject to an approved Foreign Manpower Utilization Plan (Rencana Penggunaan Tenaga Kerja Asing or “RPTKA”), as regulated under Government Regulation No. 34 of 2021 and Minister of Manpower Regulation No. 8 of 2021. Foreign workers must generally possess qualifications relevant to their position, including appropriate education and competency or relevant work experience. Certain categories are exempt from the RPTKA requirement, including qualifying shareholder directors or commissioners, diplomatic and consular officers, and foreign workers undertaking certain temporary activities prescribed by law.

Ongoing LKPM Reporting

Foreign investors are also subject to continuing supervision through the Investment Activity Report or Laporan Kegiatan Penanaman Modal (“LKPM”). As a large-scale business, a PT PMA is generally required to submit LKPM reports on a quarterly basis through OSS. The reports are used to monitor investment realization, employment, licensing compliance and the progress of the relevant investment project. Investors should ensure that the investment figures reported through LKPM remain consistent with the company’s corporate, financial and operational records.

Practical Takeaways

For foreign investors, several key issues should be addressed at the outset of the investment process, including the appropriate PT PMA structure, shareholder composition, relevant KBLI codes, foreign ownership limits, capitalization and investment requirements, required OSS licenses, manpower and immigration arrangements, and ongoing LKPM compliance. Indonesia’s 2025 reforms have reduced the minimum paid-up capital requirement for a PT PMA to IDR 2.5 billion, but this does not remove the broader investment and licensing obligations applicable to foreign-owned companies.

The key consideration is therefore not simply whether the company can be established, but whether its ownership structure, capital commitment, KBLI classification, licensing strategy and implementation plan are properly aligned from the outset. Careful structuring at the entry stage can significantly reduce regulatory risk and provide a stronger foundation for the long-term implementation of the investment in Indonesia.

For more information, contact:

Joo Hyoung Jang
[email protected]

Rieu Kim
[email protected]

Minche Sim
[email protected]

Recent Changes to Korea’s Real Estate Regulations for Foreign Buyers

Korea has recently strengthened its regulatory framework governing real estate transactions by foreign nationals, particularly with respect to residential properties. These changes, however, do not amount to a general prohibition on foreign ownership of real estate in Korea. Rather, the recent measures are primarily intended to curb speculative transactions by foreign buyers through enhanced requirements concerning transaction permits, reporting obligations, and verification of sources of funds.

1. Land Transaction Permit Zones Targeting Foreign Buyers

An amendment to the Act on Report on Real Estate Transactions, Etc. in 2023 established a legal basis for designating land transaction permit zones that apply to specified categories of purchasers.

Effective October 19, 2023, Article 10(1) of the Act permits the government to designate a land transaction permit zone by specifying the persons—including foreign nationals and foreign entities—who are subject to the permit requirement. Article 7(2)(1) of the Enforcement Decree further permits the designation of persons considered to present a risk of speculative transactions, taking into account factors such as changes in land prices and transaction volumes.

Accordingly, where there are concerns regarding speculative real estate transactions by foreign buyers in a particular area, the government may designate a land transaction permit zone specifically applicable to foreign nationals and other foreign persons or entities. Transactions falling within the scope of such a designation may therefore require prior approval.

2. Expanded Scope of Prior Approval for Foreign Acquisition of Land

Separately, the potential scope of areas in which foreign nationals and foreign entities may be required to obtain prior approval to acquire land has also been expanded.

Following an amendment to the Enforcement Decree of the Act on Report on Real Estate Transactions, Etc., effective October 4, 2023, areas eligible for designation are no longer limited to certain islands designated for national defense purposes. They may also include areas where military units are stationed and their surrounding areas, as well as areas containing nationally important facilities and their surrounding areas.

Importantly, this does not mean that every property located near a military installation or nationally important facility automatically requires prior approval. The requirement applies only to specific areas formally designated and publicly announced by the Minister of Land, Infrastructure and Transport in accordance with the procedures prescribed by law.

3. Enhanced Reporting for Residential Transactions in Permit Zones

Reporting requirements for certain residential real estate transactions have also been strengthened.

Effective February 10, 2026, a purchaser acquiring a residential property located within a land transaction permit zone pursuant to a land transaction permit or an amended permit must report additional information concerning:

• the purchaser’s funding plan and method of payment; and
• the intended use of the property, including whether the purchaser intends to personally occupy the residence and the anticipated date of occupancy.

Corresponding amendments to the Enforcement Rules of the Act have also updated the relevant reporting forms, including the form concerning the purchaser’s funding plan and intended occupancy.

These requirements are designed to enable the authorities to examine more closely both the source of acquisition funds and the purchaser’s intended use of residential property located within regulated areas.

4. Additional Reporting Requirements for Foreign Buyers

Additional reporting requirements specifically applicable to foreign purchasers have also been introduced.

Effective February 10, 2026, when a foreign national purchases real estate in Korea, the transaction report must additionally state:

• the purchaser’s immigration or visa status; and
• whether the purchaser has a domicile in Korea or has maintained a place of residence in Korea for at least 183 days.

These additional disclosure requirements are intended to enable the authorities to determine more efficiently a foreign purchaser’s Korean residency status and related tax implications.

What This Means for Foreign Buyers

The recent regulatory changes should therefore be understood as enhanced oversight of foreign real estate transactions rather than a general restriction on foreign ownership of Korean real estate.

In particular, the current regulatory direction can be summarized as follows:

1. establishing a legal basis for land transaction permit zones specifically applicable to foreign nationals and other foreign persons or entities;
2. expanding the categories of national defense and security-related areas in which foreign acquisitions of land may be subject to prior approval;
3. requiring additional disclosure of immigration and residency information by foreign purchasers; and
4. strengthening scrutiny of funding sources and intended use for residential transactions within land transaction permit zones.

Disclaimer: This newsletter is provided for general informational purposes only and does not constitute legal advice. The applicable requirements may vary depending on the location and type of property, the purchaser’s status, and the circumstances of the particular transaction.

For more information, contact:

Liew Sue Yin
[email protected]

Foreign investment in Malaysia

Malaysia has a very broad investment landscape by way of industry sectors and by way of foreign direct investment.

It was reported that the Malaysian Investment Development Authority approved RM426.7 billion in investments in 2025, representing 8,390 projects (an increase from the amount approved in 2024 which was RM384.4 billion). From this total figure, the amount of foreign investment approved was RM207.1 billion. Malaysia saw investment from a variety of countries such as Singapore, the People’s Republic of China, the United States, Japan, Hong Kong SAR, the British Virgin Islands, the Netherlands, Taiwan, Italy and the Cayman Islands.

Foreign Exchange Policy

Non-residents investing into Malaysia benefit from a liberalized foreign exchange regime, administered by Bank Negara Malaysia (“BNM”) under its Foreign Exchange Policy (“FEP”) rules.

A non-resident is free to invest in any form of ringgit or foreign currency asset in Malaysia. Profits, dividends, interest, and divestment proceeds arising from such an investment may be repatriated freely — provided that such repatriation is made in foreign currency, with no threshold and no requirement for prior BNM approval.

The FEP rules govern the currency and payments mechanics of a non-resident’s investment (how ringgit is bought, held, and repatriated).

Incorporating a company

The Companies Act 2016, administered by the Companies Commission Malaysia imposes no equity condition on Malaysian-incorporated companies— where equity conditions exist, as will be demonstrated in the subsequent paragraphs,  they come from sector-specific regulation, prescribed by other legislation, rules or guidelines administered by the relevant regulatory authority.

Examples of equity conditions by industry sectors

Policies on foreign equity participation are regulated by sectors/industries. Equity conditions may be imposed for specific transactions, specific approvals, operating licences, permits or registrations by the relevant regulatory authority (e.g., ministries, agencies, commissions) based on the activities undertaken.

Here are some examples:

(a)         In the manufacturing industry which is regulated by MIDA, 100% foreign equity ownership is allowed and this policy has been in place since June 2003.

(b)         The digital economy sector carries no foreign equity restriction for information and communication technology (ICT) activities.

(c)          In distributive trade, foreign equity is regulated on a format-by-format basis by the Ministry of Domestic Trade and Cost of Living (“KPDN”), and any foreign-equity distributive trade business requires KPDNHEP’s approval. The policy varies by retail format (e.g., hypermarkets, department stores, superstores, etc.). There are also prescribed criteria for a number of elements, such as minimum amount in shareholders’ funds, minimum percentage of Bumiputera equity and prescribed criteria for operating conditions (e.g., size or area of stores). In the case of smaller retail formats (e.g., mini markets, provision shops, permanent wet market stores, etc.) — foreign participation is prohibited altogether.

(d)         Telecommunications licensing in Malaysia is regulated by the Malaysian Communications and Multimedia Commission (MCMC). The MCMC’s Licensing Guidebook, sets out application procedures and eligibility criteria across the four licensable activity categories — network facilities, network services, applications services and content applications services. Foreign equity is, in fact, permitted for certain license categories: applications service providers (ASP) may be 100% foreign-owned (since 1 January 2012), while network facilities providers (NFP) are capped at 70% foreign equity (since 15 November 2012). Separately, a “foreign company” — defined under the Companies Act 2016 by place of incorporation, not by shareholding — is not eligible to apply for an individual license, and may only be registered as a class license holder with the Minister’s express permission; in practice, having a locally-incorporated company would address this restriction sufficiently.

(e)         Incorporation of a company under the Companies Act 2016 establishes a local company, however in other legislation, such as the National Land Code, a company with 50% or more of its shares held by non-citizens or companies incorporated outside of Malaysia, will be recognized as a foreign company and is required to obtain approval of the relevant state authority prior to acquisition of land or registration of an interest in land and such acquisition must be in accordance with the applicable guidelines prescribed by the relevant state authority.

(f)          Land transactions involving Bumiputera interest may require prior approval from the Economic Planning Unit (“EPU”), triggered by either direct acquisition or indirect acquisition (via share purchase) once a RM20 million land-value threshold is crossed. Approval conditions typically include minimum Bumiputera equity and share capital thresholds, applied equally to local and foreign purchasers. Malay Reserve Land and native customary land sit outside this regime entirely — they are restricted to eligible purchasers under separate state enactments, regardless of value or EPU approval.

Investment Incentives

Just like how policies on foreign equity participation are regulated by sectors/industries, Malaysia’s  incentives are structured on a sector-by-sector basis. For example:

(i)           Malaysia implemented its New Incentive Framework (“NIF”) in 2026. Under the NIF, eligibility for incentives will no longer be based on tax-rate concessions, but scored against the economic outcomes an investment delivers. The economic outcome will be assessed against key criteria such as increasing economic complexity, creation of high value, high income employment, supply chain, developing new and existing industries, improving inclusivity and enhancing sustainability practices. The tax incentives for new investment in the manufacturing sector came into effect on 1 March 2026. Manufacturing activities in 15 identified subsectors are eligible to apply for the incentive. Incentives for the services sector are scheduled to be implemented in 2026 as well.

(ii)          Malaysia Digital (“MD”) Status is an incentive framework regulated by MDEC for the digital economy.  A wholly foreign-owned company may qualify for MD Status and its associated tax incentives.

The transaction perspective

When planning investment projects in Malaysia, the investor should allocate its initial focus on the intended industry/sector to identify whether foreign or local ownership considerations are applicable. A preliminary assessment exercise should be carried out to identify sector-specific approvals, eligibility for investment incentives, application processes, processing times and submission deadlines. Engagements with MIDA or the relevant state investment agency where the investment project will be carried out should also be incorporated into the preliminary assessment exercise.

If the investment project involves investment into an existing business or a joint venture with other investors, the outcome of due diligence efforts will guide the discussions leading to finalization of transaction documents such as subscription agreements, share purchase agreements and shareholders’ agreements by addressing the relevant transaction factors (e.g., conditions precedent, conditions subsequent, post-closing integration, compliance, governance and continuing reporting obligations).

The above is intended to give a general sense of the regulatory landscape for foreign investment into Malaysia. As the transaction perspective above suggests, the right approach depends heavily on sector, structure, and deal specifics.

For more information, contact:

Sham Chee Keat
[email protected]

Regulations for Foreign Direct Investments (FDI) in Singapore

Introduction

Singapore is one of the most business-friendly and open economies and remains a favourable destination for FDI.  It allows foreign ownership in most industries, and it does not generally impose an economy-wide approval regime on FDI.  However, FDI in certain national security-sensitive industries and when FDI raises competition concern are regulated under specific laws.  Relevant legislations include the Significant Investments Review Act 2024 (“SIRA”), the Transport Sector (Critical Firms) Act 2024 (“TSCFA”), the competition legislation and other sectoral legislations.

1. SIRA

SIRA regulates the ownership and management through local or foreign investment in “designated entities” deemed critical to national security.  Designated entities are gazetted from time to time and now include certain entities in petrochemical, defence, digital, energy, logistics, marine, port and refinery sectors. SIRA regulates ownership at different thresholds, the appointment of key officers and other areas.  Notification and approval processes are in place under SIRA.

2. TSCFA

TSCFA establishes a logistics-specific regulatory framework governing ownership, management and operations of designated entities providing critical air, land, and sea essential transport services in Singapore.  It seeks to enhance the resilience of essential transport services in Singapore and protect Singapore against possible disruptions to some essential transport firms. In relation to ownership and control of Essential Transport Services, the Act provides for progressive controls to different ownership thresholds. Notification and approval processes are in place under TSCFA.

3. Competition Act

FDI through mergers or acquisitions of local entities is subject to review, sanction or direction by the Competition Commission of Singapore under the Competition Act 2004 in instances such as where foreign investor’s conduct amounts to the abuse of a dominant position in Singapore, or where mergers or acquisitions have resulted in or may result in a substantial lessening of competition in any market in Singapore for goods and services.

4. Anti-Money Laundering and Suppression of Terrorism Financing legislations

Singapore has in place the Anti-Money Laundering and Other Matters Act 2024, the Terrorism (Suppression of Financing) Act 2002 and other sectoral legislations to resist the inflow of illicit foreign capital.  To invest in Singapore, foreign capital must go through compliance gates managed by the government agencies, the financial institutions and the professional stakeholders (such as law firms, accounting firms and estate agencies).

5. Sector-Specific Legislations

Financial Services and Banking

The financial services sector is regulated by the Monetary Authority of Singapore (“MAS”) under legislations such as the Banking Act 1970, the Insurance Act 1966, Financial Services and Markets Act 2022, the Financial Advisers Act 2001, the Securities and Futures Act 2001 and the Payment Services Act 2019 which provide for the control, licensing and regulatory requirements.

Media and Broadcasting

The media sector is subject to foreign ownership, control, management and licensing restrictions under the Newspaper and Printing Presses Act 1974 and the Broadcasting Act 1994.

Legal Service

The legal service is regulated by the Legal Profession Act 1966 and subsidiary legislations. Foreign investment and participation in Singapore’s legal services sector are subject to control under the Legal Profession (Law Practice Entities) Rules 2015, which regulate foreign interests in Singapore law practices, foreign ownership and participation, and the licensing and operation of foreign law practices in Singapore.

 Real Estate Ownership

Foreign ownership of residential property is regulated by the Residential Property Act 1976. Foreign persons generally require approval to acquire restricted residential property including landed residential property. Other residential properties such as qualifying condominium units are generally not restricted under the law. Separate eligibility requirements would apply to the purchase of public housing flats.

Conclusion

Singapore has maintained a business-friendly economy through its open approach with carefully calibrated targeted regulations to ensure the smooth running of a stable and law-honouring economy.

For more information, contact:

Weita Liao
[email protected]

Key Recent Developments in Taiwan’s Regulatory Framework for Inbound Foreign Investment

To encourage enterprises to expand their investments in Taiwan, the Executive Yuan launched the “Three Major Programs for Investing in Taiwan 2.0” in 2025, with a particular focus on semiconductors, artificial intelligence (AI), defense industries, security industries, next-generation communications, and healthcare industries. The government also provides investment support measures relating to financing, land, water and electricity supply, taxation, and migrant workers to reduce barriers to investment.

Foreign Investments Currently Require Prior Investment Approval

Foreign investors are required to file an application with the Department of Investment Review (DIR) of the Ministry of Economic Affairs in advance when investing in a Taiwanese company, acquiring equity interests in a Taiwanese company, establishing a branch office, or providing a loan with a term exceeding one year. The Department of Investment Review will require investors to provide information regarding shareholding structure, source of funds, ultimate beneficial owners, and control relationships, and to explain their future business plans.

Taiwan Adopts a Negative List System for Business Activities Available to Foreign Investors, with Only Certain Industries Remaining Restricted

Taiwan generally welcomes foreign investment and adopts a negative list system (blacklist approach) for business activities open to foreign investment. In other words, foreign investors are generally permitted to invest in all business activities except for the limited categories expressly prohibited or restricted by law. Certain industries involving national security, significant public interests, or specific policy considerations may still be subject to foreign investment restrictions. For example, the manufacture of arms and weapons is, in principle, prohibited for foreign investment, while the broadcasting and cable television industries are subject to stricter foreign ownership restrictions.

PRC Investors Are Subject to a Different Regulatory Regime

It should be noted that where an investor is identified as a PRC investor (excluding Hong Kong investors and Macau investors, which are currently treated as general foreign investors), different rules will apply with respect to the relevant application procedures, investment sectors available for investment, and level of regulatory scrutiny.

Where the investor is a PRC company or individual, or where PRC investors directly or indirectly hold more than 30% of the shares of a foreign investor, or otherwise have control over such foreign investor, the investment will be deemed to originate from the PRC.

If an investor falls within the foregoing definition of a PRC investor, the scope of permissible investments will be governed by a positive list system (whitelist approach), meaning that PRC investors may invest only in business activities expressly permitted by law.

When determining the identity of an investor, the competent authorities will not normally rely solely on the place of incorporation of the investing entity. Even where an investor is incorporated in Hong Kong, Singapore, the Cayman Islands, the British Virgin Islands, or another jurisdiction, the competent authorities may further examine the actual control relationships, ultimate beneficial owners, voting arrangements, and other factors that may affect business decision-making.

Accordingly, for corporate groups or investment structures involving multilayered shareholding arrangements, clarifying the ultimate control and beneficial ownership structure at an early stage will generally help reduce uncertainties in the subsequent review process.

For more information, contact:

Nguyen Thanh Hien
[email protected]

The new beneficial ownership regulations introduce more detailed requirements for identifying the individuals who ultimately own or exercise effective control over an enterprise. For foreign-invested enterprises, these obligations have a direct impact on entity establishment, changes to enterprise registration and data governance throughout the ownership chain.

WHAT HAS CHANGED UNDER THE NEW BENEFICIAL OWNERSHIP REGULATIONS?

Compared with the previous framework, the new beneficial ownership regulations introduce three significant changes.

First, the obligation to identify beneficial owners has become part of the enterprise registration process.

Previously, Vietnam’s anti-money laundering legislation primarily required reporting entities, such as credit institutions and certain relevant service providers, to identify and verify the beneficial owners of their customers. Enterprises themselves were not required to directly declare such information as part of their enterprise registration filings.

From 1 July 2025, the amended Law on Enterprises and Decree No. 168/2025/ND-CP have imposed direct obligations on enterprises to identify, declare, update and retain beneficial ownership information. Such information now forms part of an application for enterprise establishment or, where required by law, a filing for changes to enterprise registration information.

Second, the criteria and process for identifying beneficial owners have become more detailed and stringent.

Decree No. 296/2026/ND-CP requires enterprises to review each level of their ownership structure until the individual who ultimately owns or exercises effective control over the enterprise is identified. The determination must be carried out sequentially through the following three steps:

• Step 1 – Identification based on ownership: An individual who directly, indirectly, or both directly and indirectly owns at least 25% of the charter capital or at least 25% of the total voting shares. Ownership interests held through multiple levels and multiple ownership branches must be calculated and aggregated. The regulations also cover groups of individuals who are related by family ties or who, pursuant to an agreement, jointly own at least 25%.
• Step 2 – Identification based on control: If no individual meets the ownership threshold, or where there are grounds to conclude that an individual meeting the threshold is not the ultimate beneficial owner, the enterprise must identify the individual who has the power to control the management structure, charter, organisational structure, financial and investment policies, or the reorganisation or dissolution of the enterprise.
• Step 3 – Identification of the most senior managing individual: Only where no individual can be identified under either of the above criteria may the enterprise identify the individual holding the highest level of managerial authority to act on behalf of the enterprise.

Accordingly, an enterprise cannot rely solely on the identity of its direct members or shareholders. It must review the entire ownership chain and the rights through which effective control may be exercised.

Third, violations are defined more specifically and are subject to higher penalties.

Decree No. 288/2026/ND-CP introduces sanctions for violations including false or inaccurate declarations; late notification or failure to notify changes; failure by enterprises established before 1 July 2025 to supplement beneficial ownership information; and failure to retain the List of Beneficial Owners. Fines imposed on organisations may reach VND 100 million, equivalent to approximately USD 3,800.

Key penalties for enterprises include:

• A fine of VND 70 million to VND 100 million (approximately USD 2,700 to USD 3,800) for an enterprise established before 1 July 2025 that fails to supplement its beneficial ownership information when it next carries out procedures for registration of changes or notification of changes to its enterprise registration information.
• A fine of VND 30 million to VND 70 million (approximately USD 1,200 to USD 2,700) for providing false or inaccurate beneficial ownership information, or for failing to notify changes to beneficial ownership information.
• A fine of VND 10 million to VND 60 million (approximately USD 380 to USD 2,300) for notifying changes to beneficial ownership information after the applicable deadline, depending on the length of the delay. A delay of between 1 and 10 days may result in a warning.
• A fine of VND 40 million to VND 70 million (approximately USD 1,500 to USD 2,700) for failure to retain the List of Beneficial Owners as required by law.

HOW DO THE NEW REGULATIONS AFFECT FOREIGN INVESTORS?

For foreign investors that have already established a legal entity in Vietnam. An enterprise established before 1 July 2025 that has not yet supplemented its beneficial ownership information must do so the next time it carries out procedures for registration of changes or notification of changes to its enterprise registration information. If the enterprise has already made the relevant declaration and the information remains unchanged, the change in the identification criteria introduced by Decree No. 296/2026/ND-CP does not automatically trigger an obligation to make a new filing within 10 days. However, where the previously declared information or ownership percentage changes, the enterprise must notify the change within 10 days.

For foreign investors establishing a new legal entity. Beneficial owners must be identified and declared as part of the establishment application. Investors should therefore complete their review of the ownership structure, collect the necessary personal information and identify relevant control rights before the application is submitted. Providing information only on the immediate parent company or the legal representative may not be sufficient to satisfy the applicable requirements.

General impact on cross-border structures. The review does not stop at the legal entity directly contributing capital to the Vietnamese enterprise. Enterprises must consider ownership percentages at each level, voting rights, appointment rights, veto rights, shareholders’ agreements, fund management agreements and powers of attorney. Difficulties in obtaining documentation from overseas do not, in themselves, exempt an enterprise from its disclosure obligations.

WHAT SHOULD FOREIGN INVESTORS DO TO COMPLY AND MITIGATE RISK?

An appropriate compliance process should begin with ownership and control data rather than merely completing the relevant forms at the filing stage. Enterprises should consider taking the following steps:

• Prepare an ownership chart extending to the ultimate individual level, separately identifying each branch of direct and indirect ownership as well as voting rights.
• Review the charter, shareholders’ agreements, fund management agreements, powers of attorney, and any veto or appointment rights that may give rise to effective control.
• Require parent companies and investors to provide information on a periodic basis and establish an obligation to provide early notification of any transfer, restructuring or change of control.
• Maintain records evidencing the methodology used to identify beneficial owners, including calculations of ownership percentages through each level, identification documents and the basis for the conclusion reached where no individual meets the 25% threshold.
• Designate an internal point of contact to monitor the 10-day notification deadline and coordinate among the legal, corporate secretarial and tax functions, as well as overseas record-keeping teams.

The beneficial ownership regime shifts the focus from the persons formally named in corporate records to the individuals who ultimately own or exercise effective control over the enterprise. For foreign investors, the key requirement is to ensure that the Vietnamese enterprise can obtain timely access to information across the entire ownership chain and can explain the basis on which beneficial ownership has been determined in each case. Standardising ownership data and establishing an effective update mechanism before corporate filing requirements arise can significantly reduce the risk of inaccurate declarations, late notifications and transaction delays.