On 10 September 2026, the European Union and Spain joined the Luzon Economic Corridor. At the first LEC Investment Forum in Manila, Finance Minister Frederick Go, co-chair of the initiative, presented an initial portfolio of 38 projects with a total investment volume of more than 20 billion US dollars – covering energy and water, transport and logistics, digital connectivity, and advanced manufacturing. The trilateral project between the Philippines, the United States and Japan, launched in April 2024, has thus expanded to include 13 partners.

Germany is not among them. Denmark, France, Italy, Sweden, Spain and the United Kingdom are represented bilaterally, whilst Germany is represented only indirectly via the EU. This is not an exclusion, but it does change the way in which German companies gain access to the corridor.

What the corridor is – and what it is not

Geographically, the LEC describes the Subic–Clark–Manila–Batangas axis: two deep-water ports, two airports and the capital region in between, which, according to the US Trade Representative’s Office, together account for well over half of the country’s economic output. The project portfolio includes the Subic–Clark natural gas ecosystem, Sangley Point Airport and the operation of the North–South Commuter Railway.

Legally, the Corridor is neither a special economic zone nor an international treaty, but rather a coordination platform under the umbrella of the Partnership for Global Infrastructure and Investment, with working groups on transport, energy and digital infrastructure. It does not create its own procurement, company or investment law. Anyone seeking contracts or equity stakes here remains subject to Philippine law – or to the regulations of the respective funding body. This may sound self-evident, but it is regularly obscured in presentations.

The German approach goes via Brussels – and via Clark

The EU is not providing any new funding, but is aligning existing Global Gateway programmes with the corridor’s priorities: the Green Economy Programme, worth over 60 million euros, and a Digital Economy Package worth over 20 million euros. For German companies, this is effectively the most important aspect of the partnership: they are eligible to participate in EU-funded procurement without the need for a separate German partnership.

The fact that German industry is already building within the corridor is demonstrated by the largest German project in the country: on 6 August 2026, Lufthansa Technik broke ground in Clark on a second base maintenance facility – 157,000 square metres, around 1,200 skilled jobs, with operations set to begin in 2028. Bilateral trade in goods stood at around 7.3 billion US dollars in 2025; in the first four months of 2026, German exports rose by about a third to 768 million US dollars. However, the AHK survey from spring 2026 paints a different picture: two-thirds of respondents cite energy costs as the greatest burden, whilst only a quarter are planning to increase their investments.

Four legal issues to consider before entering the market

1. Ownership limits. The Public Service Act, as amended by Republic Act No. 11659 (2022), has excluded airports, railways, toll roads and telecommunications from the definition of ‘public utility’; full foreign ownership is permitted in these sectors.For electricity distribution and transmission, pipelines, water and sewerage systems, seaports and public passenger transport, the 60/40 rule remains in place – meaning a significant proportion of what is being built within the corridor. In addition, there are two caveats that are often overlooked: in the case of ‘critical infrastructure’, foreign participation is limited to 50 per cent without guaranteed reciprocity, and entities under the control of a foreign government are not permitted to participate – which is not merely a theoretical issue for companies with federal or state ownership.
2. Award of contracts. The New Government Procurement Act (Republic Act No. 12009) links public procurement to the domestic preference provision of the Tatak-Pinoy Act. As a rule, foreign bidders are only considered if nothing comparable is available domestically, if there is an obligation under international law, or if reciprocity is demonstrated. Realistic options therefore include donor-funded lots, the role of the subcontractor, and the PPP procedure under Republic Act No. 11966, which involves unsolicited bids and the ‘Swiss Challenge’ process.
3. Incentives and location selection. CREATE MORE (Republic Act No. 12066) and the Strategic Investment Priority Plan 2026 – infrastructure, energy transition, data centres – often have a greater impact on economic viability than the tender price, particularly through the full deduction of electricity costs.
4. The security policy dimension. The corridor includes an “Economic Security Zone” of around 4,000 acres planned in collaboration with the United States under the Pax Silica initiative, which targets critical minerals, semiconductors and electronics. Germany is not among the signatory states that have been disclosed to date. Anyone wishing to manufacture there must expect access to be subject to supply chain and security requirements – in addition to export controls, supply chain due diligence and CBAM.

Five recommendations

1. Plan access via EU instruments. Global Gateway and Team Europe funding are the open channels for German bidders; the local tendering rules, not Philippine procurement law, will then determine the eligibility criteria.
2. Clarify eligibility for participation before submitting a tender. The classification of the project as a ‘public utility’ or ‘critical infrastructure’ determines the permissible participation quota – and thus the entire structure.
3. Obtain proof of reciprocity at an early stage. It is a document, not an argument to be put forward during the proceedings.
4. Decide on incentives and location together. Registration, registered activities and reporting obligations underpin the tax benefits; making corrections retrospectively is costly.
5. Monitor the EU–Philippines Free Trade Agreement. Negotiations have been ongoing since they resumed in March 2024, most recently in a seventh round in the summer of 2026; a chapter on public procurement would fundamentally alter the starting position for German bidders.

The accession of the EU and Spain does not turn the Luzon Economic Corridor into a European project, but it does make it one in which European companies can participate even without a special bilateral relationship. Whether this succeeds will not be decided in Manila, but depends on the structuring – and that begins earlier than most people realise.

ADWA combines German legal advice with a local presence at eleven Asian locations. I am, of course, available to answer any queries you may have.

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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

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

In an order dated 11^th September 2026, the National Company Law Tribunal rejected the claim of the liquidator of Jet Airways (India) Ltd. for a substantial refund from planemaker Boeing for advances paid on planes never delivered. Boeing first suspended and then terminated the purchase agreements over payment delays, while Jet Airways went into insolvency proceedings.

Boeing’s insolvency claims, which they said were reduced in consideration of the advance payments received, were largely admitted in the insolvency proceedings. Now the liquidator sought a refund of the advance payments under insolvency law. Yet the NCLT turned him down, holding that jurisdiction, applicable law and the merits of the case would need to be decided on the basis of the purchase agreements—which neither side had yet produced—and required a fully fledged civil trial incl. the taking of evidence, outside insolvency jurisdiction. – The decision is commendable as it strengthens the reliability of contractual agreements during insolvency proceedings.

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Your point of contact 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

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

Malaysia’s Budget 2027, presented on 9 October, contains two changes that directly affect assignments from Germany, Austria and Switzerland:

1. Spouses will be allowed to work

From 1 January 2027, spouses of expats with a Category I Employment Pass who hold a Dependant Pass are to be allowed to work in Malaysia – subject to conditions that have yet to be determined.

Anyone sending executives to Kuala Lumpur, Penang or Johor knows the problem: a partner’s career is one of the most common reasons for declining an assignment or ending it early.

2. The top tax rate will apply sooner

The tax rate of 30% currently applies only to taxable income above RM 2 million. In future, it is to apply from RM 1 million. For income between RM 1 million and RM 2 million, the rate will therefore rise from 28% to 30%. This means up to RM 20,000 in additional tax per year. Under net salary guarantees or tax equalisation arrangements, the company bears these costs – and even more once the gross-up is taken into account.

What companies should do now:

• Review assignment policies: Should support for a partner’s career become part of the relocation package?
• Recalculate tax equalisation budgets for 2027 if your expatriates earn more than RM 1 million.
• Wait for the immigration authorities’ detailed rules before making specific commitments to employees.

Important: These are still budget proposals. They will only become legally binding through the Finance Act and the implementing regulations.—

Your point of contact 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

The Thai government has postponed the start of mandatory contributions to the Employee Welfare Fund (“EWF”) from 1 October 2026 to 1 January 2027. The postponement is intended to provide temporary relief to businesses and employees amid challenging economic conditions, including those resulting from the recent floods.

Background

The EWF is established under Thailand’s Labour Protection Act B.E. 2541 (1998), as amended. It is intended to provide financial protection for employees in certain circumstances, such as termination of employment or death. Employers and employees falling within its scope are required to make contributions. Employers deduct the employee’s share from wages and remit it together with their own contribution.

Although the Cabinet has approved the three-month postponement, it is not yet legally effective. Three draft regulations must first be amended and formally adopted. The changes will take effect only upon publication in the Royal Gazette.

Contribution Rates

The proposed contribution rates remain unaffected by the postponement and will be introduced in two phases:

• Phase 1 (1 January 2027 to 31 December 2031): Employers and employees will each contribute 0.25% of wages, for a combined total of 0.5%.
• Phase 2 (from 1 January 2032): The rate will increase to 0.5% each, for a combined total of 1%.

This phased approach is intended to allow both parties to adjust gradually to the additional burden.

What Employers Should Do Now

The additional time should be used to:

• review payroll procedures and assess the financial and administrative implications,
• ensure that payroll systems can correctly account for employee deductions and employer contributions,
• clarify whether their employees fall within the scope of the EWF, particularly where other employee benefit arrangements are already in place.

Outlook

The Cabinet resolution provides only a temporary reprieve; the obligations themselves remain unchanged. As formal adoption is still pending, businesses should monitor further announcements and the publication of the regulations in the Royal Gazette.

This article is for general information purposes only and does not constitute legal advice. If you have any questions or require individual legal assistance, please contact the team at Respondek & Fan.

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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

www.rflegal.com
respondek@rflegal.com

Singapore’s Parliament passed the Digital Infrastructure Bill on 7 October 2026. The legislation aims to enhance the security and resilience of digital infrastructure services and make data centre operations more environmentally sustainable.

The forthcoming Digital Infrastructure Act (DIA) introduces two licensing regimes overseen by the Infocomm Media Development Authority (IMDA):

• Major Foundational Digital Infrastructure Licence: This applies to data centre services provided at facilities with a critical IT load of at least 10 megawatts, as well as cloud services in the form of Infrastructure-as-a-Service (IaaS) or Platform-as-a-Service (PaaS) that have generated average annual revenue of at least SGD 100 million from users in Singapore over the preceding three years. Licensees must implement prescribed measures relating to physical security and cybersecurity, the prevention of service disruptions, business continuity and disaster recovery. They must report certain cybersecurity incidents and disruptions to the IMDA.
• Data Centre Licence: This applies to operators of data centres in Singapore with a critical IT load of at least 3 megawatts. In particular, licensees must comply with energy and water efficiency requirements, report regularly to the IMDA and notify it of certain changes in ownership or control within seven days of becoming aware of them.

In the event of non-compliance, the IMDA may impose financial penalties of up to SGD 1 million or 10% of the licensee’s annual revenue in Singapore, whichever is higher. It may also revoke or suspend licences and amend or impose licence conditions. For data centres, it may additionally reduce the permitted critical IT load.

Implications for Foreign Companies and Investors

The new rules are particularly relevant to foreign companies that operate data centres or cloud services in Singapore or are planning corresponding investments. The licensing requirement for major foundational digital infrastructure may also apply to providers delivering their services to users in Singapore from outside Singapore, where an outage or impairment would be likely to disrupt the business operations of numerous companies or organisations in Singapore.

Affected companies should assess at an early stage how the new regulatory framework will affect their compliance, governance, cybersecurity, business continuity and sustainability requirements. Investors should also evaluate the implications for planned investments in data centre operators and cloud providers.

The legislation will enter into force on a date to be appointed by the responsible Minister by notification in the Government Gazette.

Further information is available in the Digital Infrastructure Bill.

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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

www.respondekfan.com
respondek@respondekfan.com

In April 2026, the Hong Kong Immigration Department introduced a procedural change that affects Hong Kong visa renewal applications.

The key takeaway is simple: 

A pending application for an extension of stay no longer allows one to remain in Hong Kong if the existing visa has expired before or during the renewal process. 

Up until the introduction of the change, it was a common misunderstanding that a pending application allowed the applicant to continue living and working in Hong Kong until the visa got renewed. The new addendum has now expressly rejected that assumption. 

This guide will explain how the changes work, the risks involved, and the practical steps necessary to remain compliant under the new system. 

What Is a Hong Kong Visa Renewal or Extension of Stay? 

A Hong Kong visa renewal is formally known as an application for extension of stay. It is the formal request submitted to the Hong Kong Immigration Department by a non-permanent resident to prolong their permitted period of stay.  

From 1 March 2026, the application window for an extension of stay has been extended, meaning one may now submit an application up to 3 months in advance, as opposed to the previous 1-month period.  

Ultimately, however, it is important to remember that an extension application is only a request. Approval is not automatic and remains subject to the discretion of the Immigration Department, with consideration to the eligibility requirements applicable to each visa category and supporting evidence where required. 

Under the new changes, careful planning and early preparation for application renewal is more important than ever. 

Legal Consequences of Overstaying in Hong Kong 

If one continues to stay in Hong Kong after the visa expiry date, this may be regarded as an overstay despite having a pending application under review. In such a scenario, there can be serious consequences, with potential penalties including: 

• Up to HK$50,000 fine. 
• Up to 2 years imprisonment. 
• Removal or deportation from Hong Kong. 
• Adverse immigration records. 
• Negative impact on future visa and residency applications. 

The Immigration Department takes overstaying breaches seriously, particularly when employment activities continue after visa expiration. 

Scenario 1: Leaving Hong Kong Before Visa Expiry 

This is likely the safest and recommended approach if the visa expires while awaiting extension approval. 

Benefits Of Leaving Before Expiry 

• Compliance with Hong Kong immigration regulations is maintained. 
• There is no overstay. 
• The immigration record remains clean. 
• Re-entry into Hong Kong can occur once approval is received. 
• Employment can be lawfully resumed after re-entry. 

Scenario 2: Remaining In Hong Kong After Visa Expiry 

If one remains in Hong Kong after the visa has expired while a decision is pending: 

Potential Consequences 

• There appears to have been an overstay during the gap period. 
• There was no lawful right to work during this period. 
• There may be a breach of Section 41 of the Immigration Ordinance. 
• Future immigration applications may be negatively impacted. 

Crucially, even if an extension of stay is later approved, that future approval may not retrospectively rectify any previous breaches that occurred during the gap period. 

Practical Solutions for Employees 

Apply Early 

The most effective strategy is to ensure applications are submitted early: 

• Applying at least 8 to 10 weeks prior to visa expiry. 
• Gathering the necessary supporting documents in advance. 
• Responding promptly to any communications from the Immigration Department. 

Be Prepared to Leave Hong Kong 

If approval has not been received before visa expiry: 

• Arrange travel plans in advance. 
• Exit Hong Kong prior to the expiry date. 
• Consider nearby destinations such as Macau while awaiting approval. 

Maintain Detailed Records 

Keep comprehensive records of: 

• Application submission confirmations. 
• Correspondence with the Immigration Department. 
• Employment documentation. 
• Travel records. 

Where questions arise, proper documentation can help to demonstrate compliance with immigration regulations.  

Suggested Hong Kong Visa Renewal Timeline 

Employer Considerations 

For employers managing those on employment visas, they must exercise caution when dealing with visa renewals. 

Best Practices for Employers 

• Clearly track employee visa expiry dates. 
• Establish internal monitoring systems. 
• Encourage employees to submit applications early. 
• Obtain proof of extension applications. 
• Seek legal advice if delays occur. 
• Verify employee immigration status before permitting continued work. 

How Ravenscroft & Schmierer Can Help? 

Navigating a Hong Kong visa renewal can be challenging, particularly if processing delays cause uncertainty about employment rights. 

At Ravenscroft & Schmierer, we assist with all aspects of immigration and employment law, providing comprehensive support ranging from employer compliance to complex immigration status disputes. 

Our team can help assess circumstances, identify risks, and develop practical strategies to remain compliant with current Hong Kong immigration requirements. 

If you are concerned about an upcoming visa expiry or have questions regarding an extension application, contact us for tailored immigration guidance. 

FAQ: Hong Kong Visa Renewal 

Does A Pending Hong Kong Visa Renewal Allow Me to Stay in Hong Kong?

No. Under the April 2026 changes, a pending extension of stay application does not automatically allow you to remain in Hong Kong once your current visa expires.

What Happens If My Hong Kong Visa Expires While My Renewal Application Is Being Processed?

You may lose your lawful right to remain in Hong Kong and could be considered an overstayer if you stay beyond the expiry date.

Can I Continue Working While My Visa Renewal Application Is Pending?

If your existing visa remains valid, you may generally continue under its conditions. Once the visa expires, you cannot lawfully work unless a new visa or extension has been granted.

What Are the Penalties for Overstaying in Hong Kong?

Potential penalties include fines of up to HK$50,000, imprisonment of up to two years, deportation, and negative consequences for future immigration applications.

Should I Leave Hong Kong If My Extension of Stay Has Not Been Approved?

In many situations, leaving Hong Kong before visa expiry is the safest way to remain compliant with immigration requirements.

How Early Should I Apply for a Hong Kong Visa Renewal?

Applicants should ideally apply at least 4-6 weeks before their visa expires and begin preparing supporting documents even earlier.

Can An Approved Extension of Stay Fix a Previous Overstay?

Not necessarily. Approval of a later extension does not automatically erase an overstay that occurred before approval was granted.

What Should Employers Do When an Employee’s Visa Is About to Expire?

Employers should monitor expiry dates, confirm renewal applications have been submitted, and ensure employees do not work without valid immigration permission.

Why Choose Ravenscroft & Schmierer for Immigration Matters in Hong Kong?

Ravenscroft & Schmierer provides strategic immigration guidance for individuals and businesses, helping clients manage visa applications, renewals, compliance matters, and complex immigration issues.

How Can Ravenscroft & Schmierer Help with My Immigration Application?

The firm can assist with extension of stay applications, employment visas, compliance reviews, immigration strategy, and communication regarding immigration requirements.

Does Ravenscroft & Schmierer Assist Both Individuals and Businesses?

Yes. Ravenscroft & Schmierer advises both individual visa holders and employers on a broad range of immigration and compliance matters.

How Do I Contact Ravenscroft & Schmierer for Immigration Advice?

You can contact Ravenscroft & Schmierer directly to discuss your immigration circumstances and obtain tailored legal guidance.

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

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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

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