A new law regulating local and foreign significant investments into entities critical to Singapore's national security interests is set to be introduced next week, the Ministry of Trade and Industry said on Friday.
The Significant Investments Review Bill, to be introduced at next week's Parliament sitting, will require those identified as critical entities to notify or seek approval from the authorities for ownership or control changes, among others.
It will also empower the government to review ownership or control transactions and take targeted actions against any entity that has acted against Singapore's national security interests, the Ministry of Trade and Industry (MTI) said.
The bill sets out a new investment management regime, which will apply to both local and foreign investments, ensuring "a level playing field for all investors", Channel News Asia quoted the MTI as saying.
Currently, Singapore relies on sector-specific laws – such as legislative restrictions on foreign ownership and licensing regimes where investors must seek approvals from relevant regulators – to manage entities in regulated sectors, including telecommunications, banking and utilities.
Most critical entities are already covered by existing laws, so the new bill will likely identify only "a handful of (entities) that are not yet regulated or not adequately regulated", Trade and Industry Minister Gan Kim Yong told reporters.
Such an entity-based designation approach will help to ensure national security interests are met while minimising the potential impact on businesses and investors, an MTI spokesperson said in response to queries from the channel.
Under the proposed investment management regime, entities can be identified and designated as critical if they are incorporated, formed or established in Singapore, carry out activities in the city-state, or provide goods and services to people in the country.
Designated entities will have to abide by several ownership and control requirements, according to the report.
The bill will also allow the minister to review ownership or control transactions involving an entity that was not designated as critical but has acted against Singapore's national security interests.
The new investment management regime is necessary, given an increasingly complex economic landscape, Gan said, reiterating a point he made in August when he first mentioned how the government is exploring "new tools" to manage significant investments into critical entities.
"We have specific legislations ... but because of the increasingly complex economic environment, it is important for us to take a broader view on how we can effectively manage the risks that arise from some of these critical entities that may not be covered adequately by existing sectoral legislations, or some of them may not be covered at all at the moment," the minister said.
"They may be governed from the point of view of licensing regulation or contracting conditions, but in a situation where an emergency crisis may arise, it may not be adequate for us ... to ensure their continuity," he said.
He said it was, therefore, important to "relook at the overall landscape and see how we can be more effective in managing the risk that may arise from these significant investments."
"We will also publish the list of designated entities in the Gazette, which will provide certainty to affected parties," a Ministry spokesperson was quoted as saying in the report.