28 March 2024

The Significant Investments Review Act 2024 (“Act”) and its related subsidiary legislation, the Significant Investments Review Regulations 2024 and the Significant Investments Review (Reviewing Tribunal) Rules 2024, come into force on 28 March 2024. The Act sets out a new investment management regime to regulate significant investments, be it local or foreign, into entities that are critical to Singapore’s national security interests. By way of background, the Significant Investments Review Bill (“Bill”) was passed in Parliament on 9 January 2024 after its introduction on 6 November 2023.

The Allen & Gledhill Competition & Foreign Investment Review Practice has been systematically following up since the Bill was passed to observe the effect the new legislation would have against the background of the foreign direct investment (“FDI”) work that the team has already been actively involved in in recent years (as regards the Singapore aspects of new global FDI regimes).

Entities designated as critical to Singapore’s national security interests must notify or seek approval from the authorities for ownership or control changes, among others. For example:

  • Buyers into designated entities must notify the Minister for Trade and Industry (“Minister”) after they become a 5% controller in the entity. They will have to seek approval before becoming a 12%, 25% or 50% controller.
  • Buyers must also seek approval before they become indirect controllers, or when they acquire the business, or parts of it, as a going concern. Sellers will need to seek the Minister’s approval when they cease to be a 50% or 75% controller.
  • Transactions completed without the necessary approvals will be rendered void.
  • Designated entities must also seek approval for the appointment of key positions, such as the chief executive officer, directors and chairperson of the board.

The Minister has “calling-in” powers to review transactions, within a two-year period, involving an entity that was not designated as critical but has acted against Singapore’s national security interests. In such cases, targeted actions can be taken, such as directing the transacting party to dispose of its equity interest in the entity. “National security interests” is not a term that has been defined in any Singapore legislation to-date, but it has a credible and probable working definition. Do follow our updates for further insights on this.

For more information, please read our article titled “Significant Investments Review Bill passed to regulate significant investments in entities critical to Singapore’s national security interests including “calling-in” powers”.

Reference materials

The following materials are available on Singapore Statutes Online sso.agc.gov.sg: