New HKIAC Arbitration Rules Strengthen Hong Kong’s Role as a Leading Arbitration Venue

In June, our Hong Kong-based ADWA lawyer Stefan Schmierer published an updated version of the “Hong Kong Country Report” in the journal Recht der Internationalen Wirtschaft. The article discusses, among other things, the recent amendments to the arbitration rules of the Hong Kong International Arbitration Centre (HKIAC) and their significance for arbitration proceedings in Hong Kong.

In an international comparison, Hong Kong positions itself at the forefront of procedural developments. While the arbitration rules in London (LCIA) allow for flexible procedures and Paris (ICC) remains a preferred venue for parties from civil law jurisdictions, the new HKIAC rules place a clear emphasis on efficiency and early decision-making.

A key advantage of Hong Kong continues to be its geographical proximity to mainland China and the Greater Bay Area—a major location benefit in disputes involving Chinese companies.

The new rules grant arbitral tribunals greater discretion. They can now identify and resolve decisive legal or factual issues at an early stage, which may in some cases lead to termination of the proceedings. Furthermore, tribunals can split proceedings into multiple phases to issue partial awards. They may also determine flexibly at which stage certain issues should be addressed. All of this can contribute to making proceedings more targeted and resource-efficient.

In addition, the protection of sensitive information has been enhanced. The new provisions are aligned with international data protection standards. Parties may agree on additional protective measures, and the tribunal may issue binding orders on the handling of confidential data. This is particularly relevant in cross-border disputes and for parties with heightened confidentiality and data security needs.

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Your point of contact in Hong Kong: Stefan Schmierer

Ravenscroft & Schmierer

22nd Floor, Bupa Centre
141 Connaught Road West
Hong Kong, SAR

CELL:    +852 9229 6603
TEL:      +852 2388 3899
FAX:      +852 2385 2696

www.rs-lawyers.com.hk
sschmierer@rs-lawyers.com.hk

Measures on the Standard Contract for the Cross-Border Transfer of Personal Data Issued

More than a year after the entry into force of the Personal Information Protection Law of the People’s Republic of China (“PIPL”), the Cyberspace Administration of China (“CAC”) published on February 24, 2023, the final version of the Measures on the Standard Contract for the Cross-Border Transfer of Personal Data (“Measures”). The Measures are the long-awaited implementing provisions of the Standard Contract, which represents one of the three options under the PIPL for cross-border transfers of personal data. The Standard Contract itself is included as an annex to the Measures.

• For which cross-border data transfers do the Measures apply?
• Which obligations do data processors have under the Measures?
• When do the Measures enter into force?
• What sanctions may be imposed in the event of violations?

Answers to these and other questions can be found in our article “Measures on the Standard Contract for Cross-Border Transfer of Personal Data – Requirements for Data Transfers from China.”

In our webinar planned together with the Austrian Economic Chamber (WKO), we will explain, using the EU Standard Contractual Clauses in comparison with the Standard Contract, their similarities and differences and the resulting consequences.

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Your point of contact in China: Rainer Burkardt

Burkardt & Partner

Suite 2507, 25/F, Bund Center
222 Yanan Road (East)
Shanghai 200002, P.R. China

CELL:    +86 186 1687 7153
TEL:      +86 21 6321 0088
FAX:    +86 21 6321 1100

www.bktlegal.com
info@bktlegal.com

In a legal ordinance published at the end of May 2025 (“Companies [Accounts] Second Amendment Rules, 2025”), the Indian government has expanded the reporting obligations for many companies. Whereas it was previously sufficient in the annual business report simply to declare that the company had complied with the provisions of the law against sexual harassment, it is now also required to state how many complaints have been received, resolved, and have remained pending for more than 90 days. In addition, it must now be recorded whether the company has complied with the Maternity Benefit Act. Increasingly, the government is demanding that companies account for all their legal obligations, in this case towards women.

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Your contact person in India: Dr. Jörg Schendel

Suman Khaitan & Co.

W-13, West Wing, Greater Kailash Part-II
Delhi 110048, Indien

CELL:     +91 97 11 08 04 03
TEL:       +91 11 49 50 15 00
FAX:       +91 11 49 50 15 99

www.sumankhaitanco.in
germandesk@sumankhaitanco.in
schendel@adwa-law.com

What companies need to know now:

On November 1, 2024, the so-called Freelance Law came into force in Japan. Its aim is to improve conditions for freelancers, who – unlike employees – do not benefit from the extensive protective provisions of Japanese labor law. In Japan’s changing labor market, freelancers are playing an increasingly important role. However, many report precarious working conditions and grievances such as delayed or non-payment, sudden termination, or harassment by clients. The new Freelance Law seeks to improve these circumstances.

In simplified terms, the law now in force defines freelancers as individuals or one-person companies who produce goods or provide services for other companies and are not employees. The level of revenue of the client or contractor is irrelevant for classification as a freelancer. Even small companies are therefore generally required to comply with the Freelance Law.

For companies engaging freelancers, the new law entails several obligations: they must now provide written contracts clearly setting out the terms of cooperation. Maximum deadlines are prescribed for the payment of remuneration, namely 60 days after performance of the service, or in the case of subcontracting, 30 days after payment by the main client. In the case of longer-term cooperation, the client must take into account needs relating to pregnancy, childcare, and nursing care. If the client wishes to terminate or not extend such cooperation, they must also observe a 30-day notice period. In addition, the Freelance Law contains further obligations, for example regarding the tendering of contracts or the establishment of mechanisms against sexual and other forms of harassment.

For foreign companies in Japan, it is important – regardless of their size – to familiarize themselves with the new rules now in force. In determining whether the Freelance Law (or instead labor law) applies, the often difficult distinction between employees and (bogus) self-employed persons is of particular importance. To avoid fines, companies should in any case ensure that their processes comply with all current regulations for the protection of both employees and freelancers.

Your point of contact in Japan: Michael Müller

Mueller Foreign Law Office

Shin-Kasumigaseki Building
3-3-2 Kasumigaseki, Chiyoda-ku
Tokyo 100-0013, Japan

TEL:      +81 3 6805 5161
FAX:      +81 3 6805 5162

www.mueller-law.jp
info@mueller-law.jp

1. Background of the adoption of the amendment of the Commercial Code in the plenary session of the National Assembly

Recently, there have been ongoing concerns that the interests of minority shareholders are being impaired by corporate governance focused on major shareholders. Therefore, there have been increasing calls to strengthen shareholder participation and improve corporate governance.

Against this backdrop, the following measures were adopted to protect the interests of minority shareholders and to increase the fairness and transparency of corporate decision-making: (1) inclusion of “shareholders” among those to whom directors owe fiduciary duties, (2) the possibility for listed companies to hold electronic shareholders’ meetings in parallel with in-person meetings, and the obligation for large listed companies to do so. These measures were included in a partial amendment of the Commercial Code (hereinafter “Amendment Act”), which was passed by the plenary session of the National Assembly on March 13, 2025. The main contents of the Amendment Act are as follows:

2. Main contents of the Amendment Act

1) Inclusion of “shareholders” among those owed fiduciary duties

The current Commercial Code limits fiduciary duties to the “company” (Article 382(3)). Accordingly, directors were only obliged to perform their duties for the benefit of the company and did not owe fiduciary duties to individual shareholders. Under this interpretation, even if a board decision was assessed as being in the interests of the company and lawful, there were only limited possibilities to challenge it legally if the interests of minority shareholders were in fact harmed.

The amended text of the law explicitly includes “shareholders” among those owed fiduciary duties (Art. 382(3)1). Furthermore, it establishes the obligation of directors, in exercising their duties, “to protect the interests of all shareholders and treat all shareholders equally” (Art. 382(3)2). Thus, directors are now legally obliged to consider not only the interests of the company but also the interests of all shareholders when making decisions.

2) Introduction of the system of electronic shareholders’ meetings for listed companies

The current Commercial Code stipulates that the general shareholders’ meeting must be convened “at the company’s headquarters or nearby” (Article 364), which has been interpreted as restricting the venue to a physical location. Accordingly, the prevailing view was that electronic shareholders’ meetings were not permitted under the Commercial Code, and there were no explicit provisions on the exercise of voting rights by shareholders in real time via the internet. With the amendment, the holding of electronic shareholders’ meetings by listed companies is expressly permitted, with the details regulated as follows:

(1) Permission for parallel holding of electronic shareholders’ meetings by listed companies
Listed companies may hold shareholders’ meetings at which some shareholders do not need to be physically present but may instead participate in resolutions remotely by electronic means (hereinafter “electronic shareholders’ meetings”), thereby allowing listed companies to hold electronic meetings in parallel with in-person meetings at the venue (Article 542-14(1)).

(2) Obligation for large listed companies to hold electronic shareholders’ meetings in parallel
In principle, the holding of an electronic shareholders’ meeting may be decided by the board of directors, unless otherwise specified in the articles of incorporation (Article 542-14(1)). However, large listed companies whose assets exceed certain thresholds are obliged to hold electronic shareholders’ meetings (Article 542-14(2)).

(3) Convocation of electronic shareholders’ meetings and validity of participation
When a listed company convenes an electronic shareholders’ meeting, the convocation notice must include the fact that the meeting will be held electronically, the conditions for participation, and other information relevant to the electronic meeting (Article 542-14(5)). Shareholders participating electronically are deemed to be present in person at the venue of the meeting (Article 542-14(4)).

(4) Outsourcing of electronic shareholders’ meetings and confidentiality obligations
To ensure efficiency and fairness in the conduct of electronic shareholders’ meetings, listed companies may entrust the management of such meetings to an external entity (Article 542-15(2)). In such cases, the entity and its employees must not disclose or misuse confidential information obtained in connection with the meeting (Article 542-15(3)).

(5) Obligation to preserve and make available records of electronic shareholders’ meetings
Listed companies must preserve records of electronic shareholders’ meetings for five years after the meeting date (Article 542-15(4)) and make them available for inspection at their head office for three months after the meeting date so that shareholders may review them (Article 542-15(5)).

3. Planned entry into force and current situation

The amended law is scheduled to enter into force one year after its promulgation. The timing of the promulgation has not yet been determined, but if no request for reconsideration is made, it could come into effect during 2026. However, since the government exercised its right to request reconsideration (veto) of the amendment bill on April 1, 2025, the next steps by the National Assembly and the government, such as the adoption of a new resolution, remain to be seen. The following considerations are therefore based on the assumption that the amendment bill will be reconsidered or adopted later.

1) Implications of expanding directors’ fiduciary duties
The amendment expands the scope of fiduciary duties from “the company” to “the company and the shareholders” and explicitly stipulates that directors must, in the exercise of their duties, protect the interests of all shareholders and treat all shareholders equally.

However, since “interests of all shareholders” and “equal treatment” are abstract concepts, the scope of directors’ legal liability may be interpreted differently, which is likely to increase litigation against individual directors. As directors now owe fiduciary duties to shareholders, decisions that harm shareholder interests could give rise to criminal offenses such as breach of trust and aggravated breach of trust under the Criminal Code, making it necessary to clarify the scope and criteria of criminal liability. This issue is directly related to the interpretive standards for the offense of breach of trust and the existence of aggravated breach of trust, and in our view must therefore be discussed in parallel with the establishment of guidelines or supplementary legislation.

Companies should prepare for the expansion of directors’ statutory liability by incorporating procedures for reviewing shareholder interests into the board’s decision-making process and, for matters that affect shareholder rights, such as restructurings and dividend distributions, introducing pre-review processes such as external advice or fairness reviews, in order to demonstrate the legality and procedural fairness of board decisions and prepare for future litigation.

2) Implications of introducing electronic shareholders’ meetings for listed companies
The introduction of electronic shareholders’ meetings for listed companies is expected to help increase the participation rate of minority and foreign shareholders in meetings. However, electronic meetings may involve technical risks such as system hacking, connection errors, and data leaks, and there is the possibility of litigation over the legality of the process or the validity of resolutions.

Therefore, companies must take precautions in advance against technical and legal risks and establish practical systems, for example by building IT infrastructure for electronic meetings, strengthening security systems, revising the relevant articles of incorporation and board rules, improving the form of convocation notices and voting procedures, and entering into contracts with reliable external entities in cases of outsourcing.

3) Divergent views on expanding directors’ fiduciary duties
Supporters of expanding fiduciary duties emphasize the need to prevent directors from making decisions contrary to the interests of general shareholders and in favor of majority shareholders. Opponents point out that the concept of “shareholder interests” is abstract and that this could ultimately lead to confusion in corporate governance. The government justified its request for reconsideration by arguing that the amendment to the Commercial Code, due to the uncertainty regarding directors’ civil and criminal liability, could hinder active management activities and thereby negatively impact the overall economy.

However, the debate on expanding directors’ fiduciary duties as a measure to protect the interests of general shareholders against decisions favoring majority shareholders, such as corporate spin-offs and mergers, is expected to continue. In particular, the opposition majority party has expressed its intention to continue promoting legislation to expand directors’ fiduciary duties in order to protect the interests of general shareholders, while the government proposes, as an alternative to amending the Commercial Code, amending the Capital Markets Act to regulate capital transactions such as mergers and spin-offs of listed companies that could harm the interests of general shareholders. Therefore, further developments must be closely monitored.

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Your point of contact in Korea: Joachim Nowak

DAERYOOK & AJU LLC

7 – 16F, Donghoon Tower
317, Teheran-ro, Gangnam-gu
Seoul 06151, Republik Korea

CELL: +82 10 9001 6430
TEL: +82 2 772 5948
FAX: +82 2 3016 5222

www.draju.com
nowak@draju.com

An overview:

In a recent article, Dr. Harald Sippel and Raja Nadhil Aqran of our partner law firm Aqran Vijandran in Kuala Lumpur analyze the planned comprehensive amendments to the Sales & Service Tax (SST) in Malaysia, which are set to come into force on July 1, 2025.

Expanded tax base:
Around 5,000 additional tariff lines that were previously taxed at 0% will in future be subject to SST rates of 5% or 10%. Affected are, among others, imported agricultural and fishery products as well as a wide range of sports and leisure goods.

New service categories:
For the first time, construction services, leasing and rental services, brokerage and trade finance, as well as private healthcare and educational institutions will fall under SST liability. Also affected are services in the beauty & wellness sector. The tax rates range between 6% and 8% and are each linked to certain turnover thresholds.

Timeline and transition phase:
Companies already subject to SST must comply with the new rules from July 1, 2025. Businesses newly covered have until August 31, 2025, to register. A penalty-free transition period (“grace period”) will run until December 31, 2025, provided it can be credibly demonstrated that “reasonable efforts” to adapt have been undertaken.

Contract and system adjustments:
Long-term construction, leasing, or supply contracts should be supplemented with SST clauses to transparently and lawfully allocate potential additional costs. Corporate systems – particularly ERP and POS solutions – must in future be able to process multiple SST rates as well as specific B2B exemptions.

Outlook:
Companies should systematically review their product and service codes as early as 2024 and in the first half of 2025, align internal processes with the new requirements, and develop communication plans for customers and suppliers. Early preparation minimizes risks and creates planning security for the transition.

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Ihr Ansprechpartner in Malaysia: Dr. Harald Sippel

Aqran Vijandran

5-2A, Medan Klang Lama 28, 419, Jalan Klang Lama
Wilayah Persekutuan
Kuala Lumpur, Malaysia

TEL:      +60 1 8211 4958

www.aqranvijandran.com
sippel@adwa-law.com

A new era for Philippine investments

On July 1, 2025, the Philippines ushered in a new chapter for its financial landscape with the enactment of Republic Act No. 12214, known as the Capital Markets Efficiency Promotion Act (CMEPA). This groundbreaking law aims to revitalize the country’s capital markets by streamlining tax structures, lowering transaction costs, and fostering a more inclusive investment environment.

Key points of CMEPA:

• Reduction of the Stock Transaction Tax (STT): The STT on listed shares has been significantly reduced from 0.6% to 0.1%, aligning the Philippines with regional competitors and making stock trading more attractive for investors.
• Unified capital gains tax: A standardized capital gains tax of 15% now applies to the sale of both domestic and foreign unlisted shares, simplifying the tax system and promoting fairness.
• Uniform taxation of interest income: Interest income from various sources is now subject to a unified withholding tax of 20%, replacing the previously fragmented system and simplifying compliance.
• Lower documentary stamp tax (DST): The stamp duty on the initial issuance of shares has been reduced from 1% to 0.75%, with exemptions introduced for investment funds and Unit Investment Trusts (UITFs) to encourage broader participation in collective investment schemes.
• Incentives for retirement savings: Employers contributing to their employees’ Personal Equity and Retirement Accounts (PERA) may now claim an additional tax deduction of 50% on their actual contributions, thereby encouraging long-term savings.

President Ferdinand R. Marcos Jr. highlighted the significance of CMEPA during a bell-ringing ceremony at the Philippine Stock Exchange, stating: “This reform is not only for the wealthy and the professionals, for the stock traders. It is for every Filipino who dreams of better financial security.”

Finance Secretary Ralph G. Recto also emphasized that CMEPA is expected to generate net revenues of over PHP 25 billion between 2025 and 2030, which will be allocated to infrastructure, healthcare, education, and other public services.

The enactment of CMEPA represents a major step towards a more competitive and inclusive financial system in the Philippines and offers new opportunities both for seasoned investors and for those just entering the capital markets.

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Your point of contact in the Philippines: Lutz Kaiser

Villanueva Gabionza & Dy Law Offices

20th/F Corporate Center
139 Valero St., Salcedo Village
Makati City 1227, Philippines

CELL: +63 995 985 4957
TEL: +63 2 8813 3351
FAX: +63 2 8816 6741

www.vgdlaw.ph
kaiser@adwa-law.com

Latest developments:

The JSS was officially launched on January 7, 2025, during the 11th Malaysia–Singapore Leaders’ Retreat and aims to create a dynamic economic corridor between the two countries, leveraging the strengths of both nations.

This initiative pursues an ambitious vision of improving cross-border connectivity, fostering a thriving business environment, and attracting global investment. Although the JSS holds significant potential, both governments expect to operate in a complex environment to ensure its long-term viability.

With the establishment of a Joint Project Office (“JPO”) between Enterprise Singapore and the Economic Development Board on April 21, 2025, Singapore has taken an important step toward realizing the Johor–Singapore Special Economic Zone. The JPO will serve as a central point of contact for Singapore-based companies seeking to expand across the border into Johor.

The JPO will complement the “Invest Malaysia Facilitation Centre” in Johor (“IMFC-J”) by streamlining regulatory processes, managing permits and licenses, and providing a direct channel for investor engagement. The goal of the JPO is to give businesses greater clarity and predictability in planning their projects.

At the same time, infrastructure improvements are also advancing. The Singaporean and Malaysian governments are expanding the QR code immigration control system, which Singapore tested in March 2024. Johor authorities expect it to be available by mid-2025 for Singaporeans and other foreign passport holders. The aim is to reduce daily waiting times for the more than 400,000 commuters to 20 minutes.

There has also been remarkable progress in hard infrastructure. Construction of the 4 km Rapid Transit System (RTS) link between Johor Bahru and Singapore is largely complete. Installation of the rail systems will begin later this year, with operations scheduled to commence in December 2026. Once operational, the RTS will carry up to 10,000 passengers per hour, significantly easing pressure on existing road connections.

In addition, new tax incentives have been introduced. Companies engaged in high-value activities such as AI and quantum technology supply chains, aerospace, medical devices, and global services hubs may benefit from a corporate tax rate of only 5 percent for up to 15 years.

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Your point of contact in Singapore: Dr. Andreas Respondek

Respondek & Fan Pte Ltd

1 North Bridge Road
#16-03 High Street Centre
Singapore 179094

CELL:      +65 9751 0757
TEL:        +65 6324 0060
FAX:       +65 6324 0223

www.rflegal.com
respondek@rflegal.com

In February of this year, the Thai Board of Investment (“BOI”) issued Announcement No. Sor. 2/2568, announcing amendments to the list of business activities eligible for investment promotion under Announcement No. 9/2565. The purpose of this update is to strengthen Thailand’s position as a center of the bioeconomy and to promote investments that increase the value of domestic agricultural raw materials. The key changes introduced by this announcement are as follows:

1. Inclusion of new business activities eligible for investment promotion under Section 1, as listed in the Annex to BOI Announcement No. 9/2565 of December 8, 2022:

1.1 Production of sustainable aviation fuel (No. 1.2.10.4) with the condition that the sustainable aviation fuel (“SAF”) must be produced from agricultural products, by-products, agricultural residues or waste, or from materials derived from such agricultural by-products, residues, or waste.

1.2 Combined sustainable aviation fuel production (No. 1.2.10.5) with the condition that combined sustainable aviation fuel production must involve a co-processing method in the production of sustainable aviation fuel.

2. Deletion and addition of a zone for the promotion of biorefineries or an industrial estate (No. 7.2.3.6) with the following conditions:

2.1 The project must have at least 51 percent of its registered capital held by Thai shareholders.

2.2 The project must be located outside the provinces of Bangkok and Samut Prakan.

2.3 The project must cover an area of at least 200 Rai (3,200 m²). The area for industrial operations must not be less than 60% and not more than 75% of the total area.

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Your point of contact in Thailand: Dr. Andreas Respondek

Respondek & Fan Ltd

United Center, 39th Floor, Suite 3904 B
323 Silom Road
Bangkok 10500, Thailand

CELL:     +66 89 896 4048
TEL:       +66 2 635 5498
FAX:       +66 2 635 5499

www.rflegal.com
respondek@rflegal.com

On June 25, 2024, the Vietnamese government adopted Decree No. 69/2024/ND-CP, which establishes a legal basis for the introduction of a central electronic identity system (VNeID). The aim is to promote the digital transformation of public administration. The Decree entered into force on July 1, 2024. As of July 1, 2025, all existing user accounts on the National Public Service Portal as well as on related platforms will be deactivated. Public services will then be accessible exclusively via eID accounts on the new VNeID platform.

Scope of application:
The Decree applies to Vietnamese citizens, organizations and authorities as well as to foreign natural and legal persons residing or conducting business in Vietnam.

Legal status of the eID:
The electronic identities issued under the Decree are legally equivalent to conventional physical identity documents. They are valid in the context of public services as well as for digital transactions.

Authentication levels:
The Decree introduces a four-level authentication system. Level 1 comprises basic authentication, while Level 2 is based on two-factor authentication. Levels 3 and 4 include additional security measures, in particular the use of biometric data such as facial recognition, fingerprints, or iris scans. Access to digital services increases with the respective authentication level.

Challenges for foreign individuals and companies:
Despite the formal inclusion of foreign users, there are considerable practical hurdles. Registration for a Level 1 eID requires a 12-digit numerical identification number. However, many foreign travel documents such as passports or temporary residence permits contain letters and therefore cannot be technically processed. For applying for a corporate account with a Level 2 eID, a legal representative or an authorized person must hold a valid Level 2 eID. Although the Decree generally provides for this, concrete implementing guidelines are still lacking. The Immigration Authority recommends awaiting the additional regulations expected in July 2025.

Recommended measures:
Companies with international management should prepare proactively for the upcoming changes. In particular, consideration should be given to authorizing a Vietnamese individual with a valid Level 2 eID to carry out eID registration and administration on behalf of the company – provided this is expressly permitted in the forthcoming regulations. In addition, internal compliance processes should be reviewed and, if necessary, adjusted. It is also advisable to closely monitor the implementing provisions expected from July 2025.

Contact persons:
For further information or assistance with eID registration, companies should contact their legal department or a specialized law firm.

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Your point of contact in Vietnam: Christian A. Brendel

Brendel & Associates Law Co., Ltd.

Golden Tower, 9th Floor, 6 Nguyen Thi Minh Khai
Dakao Ward, District 1
Ho-Chi-Minh-Stadt, Vietnam

CELL:     +84 98 978 4791
TEL:       +84 28 3911 2008
FAX:       +84 28 3911 2010

www.brendel-associates.com
info@brendel-associates.com