30.11.2023 Newsletter
Newsletter December 2023
We are happy to inform you about the latest legal developments in Asia. The authors of the articles are at your disposal for further questions and information.
CHINA: Comments on the CAC's Draft Provisions on the Regulation and Promotion of Cross-Border Data Circulation: Are the hoped-for exemptions from the existing strict GSPD rules coming?
Comments on the CAC's Draft Provisions on the Regulation and Promotion of Cross-Border Data Circulation: Are the hoped-for exemptions from the existing strict GSPD rules coming?
On September 28, 2023, the Cyberspace Administration of China ("CAC") published the Provisions on the Regulation and Promotion of Cross-Border Data Circulation (Draft for Comment) ("Draft" for short).
The Draft has raised high hopes among foreign investors for facilitating cross-border data transfer. This is particularly due to Art. 4 of the Draft, which contains a significant relaxation of the current strict regime under the Personal Data Protection Act.
Art. 4 of the draft provides that, under certain circumstances, neither the CAC security assessment nor the certification for the protection of personal data nor the conclusion of a CAC standard contract is required for the cross-border transfer of personal data!
Read our article HERE to find out why the draft, whose deadline for submitting comments expired on October 15, 2023, will not be adopted in its current form.
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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
PHILIPPINES: Company structures in the Philippines
Company structures in the Philippines
In the Philippines, Regional Headquarters (RHQs), Regional Operating Headquarters (ROHQs), Branch Offices (BOs), and Subsidiaries are different types of entities that businesses can establish for various purposes. Each has its own characteristics and is subject to specific regulations.
An RHQ is an office that serves as an administrative branch of a multinational company engaged in international trade. It acts as a supervision, communications, and coordination center for its subsidiaries, branches, or affiliates in the Asia-Pacific region and other foreign markets. RHQs are not allowed to directly engage in business activities or earn income in the Philippines. Their role is more focused on management and coordination. It does not earn or derive income in the Philippines.
An ROHQ, on the other hand, is a foreign business entity that is allowed to derive income in the Philippines by performing qualifying services to its affiliates, subsidiaries, or branches in the Philippines, in the Asia-Pacific region, and in other foreign markets. It provides qualifying services such as general administration and planning, business planning and coordination, sourcing/procurement of raw materials and components, corporate finance advisory services, marketing control and sales promotion, training and personnel management, logistics services, research and development services and product development, technical support and maintenance, data processing and communication, and business development. ROHQs are prohibited from offering qualifying services to entities other than their affiliates, branches, or subsidiaries, as declared in their registration with the Securities and Exchange Commission. They are also not allowed to directly and indirectly solicit or market goods and services whether on behalf of their mother company, branches, affiliates, subsidiaries, or any other company. ROHQs are subject to a tax rate of 15 percent of their taxable income as provided for under the National Internal Revenue Code (NIRC) provided that any income derived from Philippine sources by the ROHQ when remitted to the parent company shall be subject to the applicable tax.
A BO -or representative office- is a foreign corporation that carries out business activities in the Philippines through a single office or a series of offices. It is not a separate legal entity from its parent company. BOs can engage in commercial, industrial, or agricultural activities, depending on the scope of the parent company's business but is not allowed to engage in activities other than those specified in its registration with the Securities and Exchange Commission. They can earn income in the Philippines but are subject to a tax rate of 30 percent of their taxable income, unless a different rate is provided by a double tax agreement.
For most entities, a minimum paid-up capitalization of US$200,000 or its equivalent in other currencies is required, except for Branch Offices, that only require a paid in minimum capital of 30,000.00 USD. Exceptions exists as well, where the entity is exclusively enganges in export activities.
If the primary purpose is to coordinate and manage the operations of affiliated entities in the Asia-Pacific region, an RHQ may be suitable. If the primary purpose is to provide specific qualifying services to affiliated entities, an ROHQ may be appropriate. If the foreign company wants to engage in commercial, industrial, or agricultural activities in the Philippines, a Branch Office may be established. And finally if the foreign company wants a separate legal entity with more independence and flexibility, a subsidiary may be recommended.
Choosing the appropriate structure of course depends on the specific goals, nature of activities, and regulatory compliance considerations of the foreign company in the Philippines.
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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
SINGAPORE: MAS publishes code of conduct for ESG rating and data product providers
MAS publishes code of conduct for ESG rating and data product providers
On December 6, the Monetary Authority of Singapore (MAS) released its final Code of Conduct for ESG Rating and Data Product Providers ("CoC") and an accompanying checklist for providers to self-certify their compliance with the CoC ("Checklist"), following a public consultation period from June to August 2023. The CoC aims to establish basic industry standards for the transparency of methodologies and data sources, corporate governance and the management of conflicts of interest that could affect the reliability and independence of products. It is based on the recommendations of the International Organization of Securities Commissions (IOSCO) for best practices for such providers.
Further information:
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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