LPA Asia Smart News

Through this newsletter, we offer you a regular selection of legislative and judicial decision insights prepared by LPA lawyers from our six Asian offices as well as some recent news from our teams.

LEGAL INSIGHTS IN ASIA

Vietnam

Vietnam’s new administrative organisation: a „great leap forward“

Hong Kong

Abolition of MPF Offsetting Arrangement in Hong Kong has come into force

Hong Kong Companies Re-Domiciliation Regime has come into effect

China

New regulations on the Chinese Tax Resident Certificate

Singapore

Legal update on Singapore Employment Law: key developments

Japan

Expected amendments to the Act on the Protection of Personal Information in 2025

NEWS FROM LPA

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LEGAL INSIGHTS IN ASIA

Vietnam’s new administrative organisation: a „great leap forward“

In a move towards administrative efficiency and modernisation, Vietnam is restructuring its government and provincial organisations simultaneously. These changes, recently approved by the National Assembly and immediately set in motion, aim to streamline operations and enhance governance.

• Under the new resolution, the Vietnamese government now comprises 14 ministries and three ministerial-level agencies. This reorganisation aims to reduce redundancies and improve the effectiveness of government operations. This new structure officially came into effect on 1 March 2025.
• By reducing the number of administrative units at the provincial level, the government aims to enhance its ability to address the needs of its citizens promptly and effectively.

Key changes in the government structure

• Before 1 March 2025

The Vietnamese government consisted of 18 ministries and four ministerial-level agencies. This structure was established under Resolution No. 08/2021/QH15, approved by the National Assembly in 2021. These ministries and agencies included:

Ministries:

1. The Ministry of National Defence
2. The Ministry of Public Security
3. The Ministry of Foreign Affairs
4. The Ministry of Justice
5. The Ministry of Finance
6. The Ministry of Planning and Investment
7. The Ministry of Industry and Trade
8. The Ministry of Agriculture and Rural Development
9. The Ministry of Transport
10. The Ministry of Construction
11. The Ministry of Natural Resources and Environment
12. The Ministry of Information and Communications
13. The Ministry of Labour, Invalids, and Social Affairs
14. The Ministry of Culture, Sports, and Tourism
15. The Ministry of Science and Technology
16. The Ministry of Education and Training
17. The Ministry of Health
18. The Ministry of Home Affairs

Ministerial-Level Agencies:

1. The Government Inspectorate
2. The Committee for Ethnic Minority Affairs
3. The State Bank of Vietnam
4. The Government Office

• After 1 March 2025

Following a new resolution approved by the National Assembly on 18 February 2025, the number of ministries has been reduced from 18 to 14. Meanwhile, the number of ministerial-level agencies has fallen from four to three. This new structure aims to reduce redundancies and improve the effectiveness of government operations.

After 1 March 2025, ministries and ministerial-level agencies include:

Ministries:

1. The Ministry of National Defence
2. The Ministry of Public Security
3. The Ministry of Foreign Affairs
4. The Ministry of Home Affairs (incorporating the Ministry of Labour, Invalids, and Social Affairs)[1]
5. The Ministry of Justice
6. The Ministry of Finance (merging the former Ministry of Finance and Ministry of Planning and Investment)[2]
7. The Ministry of Construction (incorporating the former Ministry of Transport)[3]
8. The Ministry of Industry and Trade
9. The Ministry of Science and Technologies (containing the former Ministry of Information and Communications)[4]
10. The Ministry of Education and Training
11. The Ministry of Culture, Sports, and Tourism
12. The Ministry of Agriculture and Environment (merging the Ministry of Agriculture and Rural Development and the Ministry of Natural Resources and Environment)[5]
13. The Ministry of Health
14. The Ministry of Ethnic and Religious Affairs (newly created)[6]

Ministerial-Level Agencies:

1. The Government Inspectorate
2. The State Bank of Vietnam
3. The Government Office

• Objectives of the reorganisation

The primary objective is to create a more efficient and responsive government. This change is also expected to foster a more conducive administration and improve efficiency, creating a better environment for economic development. However, while the reorganisation presents many potential benefits, it is not without challenges. Transitioning to a new administrative structure may face resistance from those accustomed to the existing system. Additionally, implementation will require significant resources and coordination to ensure a smooth transition. There is also the risk of temporary disruptions in government services during the transition period, which could impact the delivery of certain services to citizens and investors.

• Stakeholder perspective: Merging the Ministry of Planning and Investment (MPI) with the Ministry of Finance (MOF): a foreign investor’s view

The merger of the Ministry of Planning and Investment (MPI) with the Ministry of Finance (MOF) aims to streamline economic planning and financial management. However, it also poses significant challenges and risks. One major concern is the potential for leakage and inefficiencies between the two previously separate administrations. The MPI, responsible for approving investments via provincial Departments of Planning and Investment, and the MOF, in charge of the state budget and tax administration, have distinct functions and workflows.

Integrating these functions requires meticulous coordination to avoid overlaps and ensure cohesive policy implementation. There is a risk of miscommunication and data mismanagement during the transition, which could lead to delays in investment approvals and budget allocations. Meanwhile, stakeholders – such as foreign investors – may face uncertainties during the integration, affecting their confidence in the regulatory environment. The merger of MPI and MOF is a double-edged sword. While it promises greater efficiency, the transition could disrupt existing processes and create uncertainties for investors. It is crucial that the government establish clear protocols and maintain transparency to minimise these risks and ensure administrative continuity.

Key features of the provincial reorganisation

At the same time, the government has unveiled an ambitious plan to restructure its provincial-level administration. This initiative aims to reduce the number of provinces and cities from the current 63 to around 34. This consolidation is expected to cut down on bureaucratic redundancies and improve resource allocation, bringing governance closer to the people.

• Two-tier provincial administration:

Vietnam is set to transition from its current provincial administrative system, which predominantly operates at the provincial, district, and commune levels, to a streamlined two-tier provincial structure comprising provincial and commune levels. This reorganisation marks a significant shift in governance by prioritising the commune-level administration as the foundation of the government system. The future system aims to delegate greater authority to the local level.

The streamlined model is expected to enhance responsiveness to citizen and business needs, fostering a dynamic and inclusive administrative framework compared to the more segmented approach of the present system.

The Ministry of the Interior will play a pivotal role in preparing the restructuring plans of provincial administrative units. These will be submitted to the National Assembly by 30 May 2025, with approval expected by 20 June 2025. Concurrently, the government mandated relevant ministries and agencies to issue the necessary legal, policy, and procedural guidelines. Provincial People’s Committees are tasked with drafting their restructuring plans by 1 May 2025, ensuring alignment with this timeline.

Vietnam’s provincial reorganisation represents a bold step towards modernisation and improved governance. By embracing this change, the country is not only addressing current inefficiencies but also laying the groundwork for a more dynamic and responsive administrative system. The success of this initiative will depend on the government’s ability to navigate the challenges of implementation while maintaining transparency and stakeholder engagement.

While the provincial reorganisation holds great promise, it also presents significant challenges. The transition will require careful planning and coordination to minimise disruption.

• A „super-metropolis“ in Vietnam?

The proposed merger of Ho Chi Minh City with neighbouring provinces like Binh Duong, Dong Nai, and Ba Ria-Vung Tau presents a significant opportunity to create a „super-metropolis“ in Vietnam.

Ho Chi Minh City is already Vietnam’s economic hub. Merging with industrial powerhouses like Binh Duong and Dong Nai could amplify its economic potential. In particular, this integration would foster the country’s industrial, maritime, and digital economies.

Combining resources and infrastructure across these regions could lead to better urban planning, improved transportation networks, and enhanced connectivity, benefiting residents and businesses alike. The merger would create a larger administrative unit with a combined population of over 13 million and a vast area, making it a significant player not just nationally but regionally.

Conclusion

We see this on-going reorganisation at government and provincial levels as a positive step towards improving the business environment. A more responsive and efficient government can significantly improve the ease of doing business in Vietnam.

However, resistance from stakeholders accustomed to the existing system may pose hurdles. Moreover, the financial and logistical demands of implementing such a large-scale reform cannot be underestimated.

It is essential for the government to ensure continuity and stability during the transition to maintain investors’ confidence in a context of international tensions.

*****

[1] This will handle the current functions of the Ministry of Home Affairs and assume responsibilities related to labour, wages, employment, people with meritorious services, occupational safety and hygiene, social insurance, and gender equality from the Ministry of Labour, Invalids, and Social Affairs.

Additionally, vocational education management will be transferred from the Ministry of Labour, Invalids, and Social Affairs to the Ministry of Education and Training.

Furthermore, responsibilities for social protection, child welfare, and social evils prevention (except drug rehabilitation and post-rehabilitation management, which will be transferred to the Ministry of Public Security) will be transferred from the Ministry of Labour, Invalids, and Social Affairs to the Ministry of Health. Responsibility for poverty reduction will be shifted to the new Ministry of Agriculture and Environment.

[2] The new Ministry of Finance largely inherits the functions and responsibilities of the former ministry and those of the previous Ministry of Planning and Investment. It will also assume the organisational structure of Vietnam Social Security and take over the rights, obligations, and responsibilities of state ownership representation for 18 state-owned corporations and enterprises currently managed by the Committee for Management of State Capital at Enterprises.

[3] The new Ministry of Construction largely inherits the functions and responsibilities of both the former ministry and the previous Ministry of Transport. Additionally, the function of state management over driver licensing and road vehicle examinations will be transferred from the Ministry of Transport to the Ministry of Public Security.

[4] Responsibilities related to press and publishing management will be transferred from the Ministry of Information and Communications to the Ministry of Culture, Sports, and Tourism.

[5] The new Ministry of Agriculture and Environment is taking over the responsibilities of both the previous Ministry of Agriculture and Rural Development and the former Ministry of Natural Resources and Environment. It will also assume the state management function over poverty reduction from the Ministry of Labour, Invalids, and Social Affairs.

[6] This will be established by restructuring the current Committee for Ethnic Affairs, incorporating the state management function over religious affairs from the Ministry of Home Affairs, and refining its responsibilities in managing ethnic affairs.

Etienne Laumonier

 

Abolition of MPF Offsetting Arrangement in Hong Kong has come into force

The abolition of the MPF offsetting arrangement has been in effect since 1 May 2025, following its enactment on 9 June 2022 through the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022.

From now on, the accrued benefits derived from employer’s MPF mandatory contributions (ERMC) can no longer offset employee’s severance payment (SP) or long service payments (LSP) for service after this date, though they can still offset payments for service before it. However, the accrued benefits derived from employer’s MPF voluntary contributions and gratuities based on years of service remain eligible for offsetting SP and LSP.

Nicolas Vanderchmitt

 

Hong Kong companies Re-Domiciliation Regime has come into effect

On 23 May 2025, Hong Kong’s new inward company re-domiciliation regime officially came into effect following the passage of the Companies (Amendment) (No. 2) Bill 2024. This reform allows eligible companies incorporated outside Hong Kong to transfer their place of incorporation to Hong Kong while preserving their legal identity, which is a significant simplification compared to the previous requirement of winding up the foreign entity and establishing a new Hong Kong company.

This new framework is expected to significantly strengthen Hong Kong’s position as a leading corporate hub in the Asia-Pacific region.

Nicolas Vanderchmitt

 

New Regulations on the Chinese Tax Resident Certificate

The State Administration of Taxation („SAT“) has issued an Announcement on Matters Relating to the China Tax Resident Certificate (the „New Announcement„), which came into effect on  April 1, 2025.

Based on the announcements previously promulgated by the SAT in 2016 and 2019, the New Announcement optimizes the issuance of the China Tax Resident Certificate and expands its application scope, so as to provide protection and convenience for Chinese tax residents to conduct cross-border activities.

The ‘China Tax Resident Certificate’ is an important document used by taxpayers outside China to prove their Chinese tax resident status. It is mainly used to enjoy the treatment of tax treaties. Until now, China has signed tax treaties with 114 countries and regions.

In addition to the purpose of enjoying treatment of treaty, it is the first time that the New Announcement confirms that the ‘China Tax Resident Certificate’ can be used for other purposes, such as establishment of overseas subsidiaries or branches, opening of bank accounts in foreign countries, and registration of non-operational entity (no personnel, no tangible assets) in foreign countries to benefit from favorable tax treatment.

For the first time, domestic partnership enterprises can apply for the ‘China Tax Resident Certificate’ by their Chinese resident partners and indicate the partnership on the Certificate.

Enterprises and individuals can easily apply for the ‘China Tax Resident Certificate’ through online tax bureau platform.

The New Announcement also allows to issue the tailor-made ‘China Tax Resident Certificate’ if foreign authorities have specific format requirements. In such case, applicants shall communicate with the competent authorities of the foreign country to clarify the special requirements for the Certificate.

The release of the New Announcement provides more efficient support for „going out“ enterprises and individuals for their investment.

Fanny Nguyen | Hélène Liu

 

Legal update on Singapore Employment Law: key developments

Key numbers Labor Market 4Q 2024[1] On 19 March 2025, the Ministry of Manpower released the Labour Market Report for Q4 2024, which reflects the continued resilience and positive trajectory of Singapore’s labour market. Total employment expanded by 44,500, including 8,800 additional resident positions, thereby reversing the prior year’s contraction. Unemployment remained low and stable (1.9% overall; 2.8% among residents), while retrenchments declined to 13,020 for the full year. Notably, job vacancies rose to 77,500 in December, resulting in a ratio of 1.64 vacancies per unemployed person, indicative of a sustained tightness in labour market conditions. Resident employment gains were concentrated in high-skilled sectors such as financial services, healthcare, and information and communications. Meanwhile, the growth in non-resident employment moderated. Business sentiment remained positive, with a growing proportion of firms indicating intentions to increase headcount and wages in the first quarter of 2025.

I. Work Injury Compensation Act 2019: Workplace-related injuries maximum compensation will rise significantly in November 2025[2]

Work Injury Compensation Act 2019 (“WICA”) is an Act “to provide for the payment of compensation to employees for injury suffered arising out of and in the course of their employment and to platform workers for injury suffered arising out of and in the course of their provision of platform services for platform operators, and to regulate providers of insurance for liability”[3] under the WICA.

Important amendments to the WICA were announced by the Ministry of Manpower (“MOM”) in February 2024, set to come into effect in November 2025. These changes aim to adjust compensation limits in line with wage growth and rising healthcare costs, while maintaining a low-cost, efficient process for employees to seek compensation for work-related injuries and diseases:

• The maximum compensation for a workplace death will increase from S$225,000 to S$269,000.
• Compensation for workers suffering total permanent incapacity will rise from S$289,000 to S$346,000.

The WICA continues to provide compensation regardless of fault, with caps in place to limit large payouts for employers.

In addition to increasing the compensation thresholds, the MOM implemented in March 2024 new Workplace Safety Measures including compulsory safety training for CEOs (the Top Executive WSH Programme).

Employers are encouraged to review their WICA insurance coverage in advance of the November 2025 amendments, to ensure alignment with the revised compensation limits and related regulatory requirements, allowing adequate time for any necessary adjustments.

II. Measures from the National Wage Council Guidelines effective as of 1 January 2025[4]

The National Wage Council of Singapore (the “NWC”) convened between August and October 2024 to formulate wage guidelines for the period from 1 December 2024 to 30 November 2025.

The provisions of paragraph 10 of the 2024/2025 guidelines came into effect on 1 January 2025, as follows:

• It was provided that the monthly wage ceiling for contributions to the CPF would increase from SGD 6,800 to SGD 8,000 by 2026, in order to keep pace with wage growth. This increase is being implemented in phases to allow employers and employees time to adjust. The most recent increase, raising the ceiling to SGD 7,400, came into effect on 1 January 2025.
• As of 1 January 2025, employer CPF contributions for employees aged between 55 and 65 have increased by 0.5 percentage points. A transitional support measure, known as the CPF Transition Offset, was introduced to partially offset the rise in CPF contributions borne by employers for the year 2025.
• Employers are expected to take these CPF contribution increases into account when reviewing salary adjustments.

For further details, please refer to the following link to the guidelines: https://www.mom.gov.sg/-/media/mom/documents/press-releases/2023/annex-a—nwc-2023-2024-guidelines.pdf

III. Adoption of a New Bill on Workplace Fairness in Singapore[5]

Overview. In January 2025, Singapore passed a key piece of legislation aimed at strengthening protections for employees against workplace discrimination. The Workplace Fairness Bill (the “Bill”) is part of a two-phase legislative framework, with implementation expected in either 2026 or 2027.

Main objective. The Bill explicitly prohibits discriminatory practices in employment-related decisions, including:

• Recruitment,
• Dismissals,
• Performance assessments.

Protected characteristics include age, gender, pregnancy, family responsibilities, race, religion, nationality, and disabilities and mental health conditions.

Employer obligations. Employers will be required to establish internal mechanisms to:

• Handle employee complaints,
• Ensure the confidentiality of any procedures undertaken.

Application to small businesses. A five-year transitional period is planned for small businesses with fewer than 25 employees, to allow them time to comply with the new requirements.

Support measures. Several local organisations and HR professionals have already introduced support initiatives, including:

• Targeted training programmes,
• Practical tools to prevent discrimination,
• Efforts to enhance employee well-being in the workplace.

Complementarity with existing guidelines. The new legislation is designed to complement, rather than replace, the current Tripartite Guidelines on Fair Employment Practices.

This reform is expected to transform Singapore’s workplace culture by promoting fair employment practices and strengthening employee’s rights, while fostering an inclusive and respectful working environment.

IV. New Guidelines on Flexible Work Arrangement Requests[6]

As highlighted in our Q4 2024 newsletter, updates on Flexible Work Arrangements (“FWAs”) were anticipated. On 1 December 2024, the new guidelines came into effect, establishing the procedure for employees to formally submit requests for FWAs and requiring employers to review and respond to these requests appropriately.

Employers have to implement an internal process for handling such requests. They provide a framework for both parties to jointly assess three types of FWAs:

• Flexi-time: adjustable working hours,
• Flexi-load: a modifiable workload,
• Flexi-place: a flexible work location, such as telecommuting or remote work.

For more information, please refer to the guidelines available at the following link: https://www.mom.gov.sg/-/media/mom/documents/press-releases/2024/tripartite-guidelines-on-flexible-work-arrangement-requests.pdf

V. Update on Paid Shared Parental Leave Entitlements under the Child Development Co-Savings (Amendment) Bill – Effective 1 April 2025[7]

As noted in our Q4 2024 newsletter, from 1 April 2025, working parents are entitled to an additional six weeks of paid shared parental leave—on top of maternity leave—under the Child Development Co-Savings (Amendment) Bill (“CDCSAB”). This entitlement will increase to ten weeks from 1 April 2026.

As of 1 April 2025, the paternal leave entitlement for eligible fathers will also double from two to four weeks. The additional 2 weeks of government paid paternity leave (which employers currently have the option to offer on a voluntary basis) will be made mandatory. As such, eligible fathers will be entitled to 4 weeks of government paid paternity leave.

The CDCSAB introduced a new shared parental leave scheme that replaces the previous framework and provides additional paid leave on top of existing maternity and paternity entitlements. By default, these additional weeks are equally allocated between both working parents, though the allocation can be adjusted based on their respective caregiving needs.

To be eligible for shared parental leave, the following conditions must be met:

• The child must be a Singapore citizen; and
• The employee must provide their employer with at least four weeks’ notice before taking maternity, paternity, or shared parental leave, and should aim to inform their employer as early as possible upon confirmation of pregnancy.

VI. Coming into effect of the Platform Workers Act[8]

On 17 December 2024, the MOM announced the entry into force of the Platform Workers Act 2024 (“PWA”) as of 1 January 2025, following its adoption in September 2024.

The implementation of the PWA represents a major milestone in regulating digital platform work in Singapore and is expected to enhance the protection of platform workers, such as Grab or Gojek workers, in several areas, notably with regard to housing and retirement adequacy through the Central Provident Fund (“CPF”), by providing financial compensation in the event of a work injury, as well as by establishing a legal framework for representation. The new administrative and financial obligations, include mandatory registration, insurance compliance, payroll system adjustments to incorporate the new CPF contributions.

Additional information can be found via the link below: https://sso.agc.gov.sg/Act/PWA2024

*****

[1] Ministry of Manpower, “Labour Market in 4Q 2024”, 19 March 2025.

[2] Ministry of Manpower, “Higher Compensation Limits Under the Work Injury Compensation Act”, 8 February 2024.

[3] Singapore’s Work Injury Compensation Act 2019.

[4] National Wage Council of Singapore, Guidelines 2024-2025.

[5] Singapore’s Workplace Fairness Act 2024, Bill No. 50/2024, November 2024; Ministry of Manpower, “Passing Of Workplace Fairness Bill Marks Next Step In Building Fair and Harmonious Workplaces”, 8 January 2025.

[6] Ministry of Manpower, “Tripartite Guidelines on Flexible Work Arrangement Requests (TG-FWAR)”, https://www.mom.gov.sg/employment-practices/good-work-practices/flexible-work-arrangements.

[7] Ministry of Social and Family Development, “Amendments to Child Development Co-Savings Act: Enhanced Paternity Leave and New Shared Parental Leave Scheme from 1 April 2025 to Strengthen Support for Working Parents”, 13 November 2024; Government-Paid Leave Portal, Shared Parental Leave (SPL), https://www.profamilyleave.msf.gov.sg/schemes/shared-parental-leave.

[8] Ministry of Manpower, “Commencement of Platform Workers Act from 1 January 2025”, 17 December 2024.

Astrid Cippe | Charline Levasseur

 

Expected amendments to the Act on the Protection of Personal Information in 2025 

Introduction

The Act on the Protection of Personal Information (Act No. 57 of 30 May 2003 – the “APPI”) is the main law regulating data privacy in Japan. It applies to all business operators (natural persons or legal entities) located in Japan that handle personal information, with the purpose to strike a balance between the protection of the rights and interests of individuals and the use of personal information.

Originally enacted in 2003, the APPI has been subject to several amendments pursuant to the so-called ‘triennal review’ provisions added in 2015, which provide a reform procedure every 3 year to adapt the APPI to the significant progress in information and communication technology.

Accordingly, the Personal Information Protection Commission (“PPC”) is preparing for the next amendment to the APPI expected to be finalized in 2025. Following the release of the interim report on 27 June 2024 and a public consultation phase, the PPC has released on 5 March 2025 the “Proposal for an approach to the system issues surrounding the Personal Information Protection Act” (the “Proposal Draft”) which may have a substantial impact on businesses handling personal data.

Being noted that, as the Proposal Draft only reflects regulatory intentions, it is not legally binding at this stage. The timeline for the finalization and enforcement of the amendments to the APPI has not yet been officially confirmed.

Key issues and proposals

The Proposal Draft aims to address three key main issues as identified in the interim report, 1) tailoring consent requirements based on the nature of the individual or the intended use of data, 2) mitigating risks associated with biometric data collection, and 3) ensuring effective compliance with the APPI; all without hindering innovation or progress.

1. Tailoring consent requirements to individuals or data use

The PPC proposes a more flexible framework for obtaining consent, this requirement being either tightened or relaxed depending on the context of data collection and characteristics of data subjects.

As the APPI does not currently contain any provision in relation to the processing of information of children, guidelines regarding the APPI generally provide that, in circumstances where consent is required for the processing of personal data of minors aged 12 to 15, such as in cases involving the use of personal data for purposes beyond those originally specified, the collection of sensitive personal information, or the provision of such data to third parties, consent should be obtained from a legal representative or other duly authorized guardian. However, such guidance remains merely advisory in nature and may not, in and of itself, constitute a sufficient or comprehensive legal basis for compliance.

Therefore, the PPC discusses introducing specific rules for such children under age of 16. It is proposed that, where consent is required, it would need to be obtained from the legal guardian. It is also considered granting minors (or their guardians) the right to request suspension of data use, even if no unlawful processing has occurred. Businesses would further be required to act in the best interest of the child when handling such data, and guardians must do the same when granting consent. In light of the vulnerability of children and past incidents involving serious breaches of children’s personal information, consideration is also being given to strengthening the obligations of businesses to implement appropriate security control measures.

At the same time, the PPC suggests to allow personal data to be processed or shared with third parties without individual consent (and therefore, no longer require it) when (i) data is used solely for statistical purposes or general-purpose analysis (i.e., for AI training), (ii) data is shared for the fulfillment of a contract or in situations where such use clearly aligns with the individual’s intent (for example, hotel booking intermediaries or international fund transfers) and (iii) data is used for public health or medical and scientific research. Overall, the idea is to relax consent requirements when it is used for research purposes and/or is very unlikely to infringe individual rights. In any case, such exemptions would be subject to strict safeguards, such as prior disclosure of processing purposes, contractual limitations, and prohibiting further use or onward transfer.

In extension, the Proposal Draft considers exempting businesses from immediate reporting of personal data breaches in low-risk cases (especially when only one individual is affected or when internal identifiers are leaked), particularly if the business has obtained certification from a third party attesting to adequate security safeguards.

2. Mitigating risks associated with biometric data collection

With the development of AI-powered cameras and facial recognition technologies, the Proposal Draft highlights the need to reinforce the legal framework applicable to facial feature data as it holds high privacy sensitivity due to its permanence and ease of collection without the individual’s knowledge. It is envisioned that the term “facial feature data” would be defined as information extracted from the structure of the face, skin tone, and the position and shape of facial components such as the eyes, nose, and mouth, which enables the identification of an individual through devices or software designed for that purpose. It should be noted that ordinary facial photographs would not fall under the definition of “facial feature data.”

With that in mind, key proposals include:

• requiring businesses to disclose detailed information on the use of facial feature data such as purpose of use, data collection methods, and how individuals can request suspension of processing;
• prohibiting the third-party transfer of facial feature data under the opt-out model as provided for by the APPI; and
• allowing individuals to request suspension of use, even if the data was lawfully obtained.

3. Ensuring effective compliance with the APPI

The third issue identified through the review process of the APPI is the need for a better response to system or large-scale violations, both before and after such violations occur.

In the light of this, the PPC aims to first ensure the effectiveness of recommendations and orders, suggesting that emergency orders may be issued before a violation results in actual harm if there is a clear risk of significant infringement. The PPC also suggested to provide legal basis for, when a business fails to comply with an order, the PPC may be authorized to request cooperation from third parties, such as hosting providers or search engines to suspend access to services that facilitate continued non-compliant data processing.

In addition, it is considered to create a ‘surcharge system’, a new administrative fine system targeting serious or large-scale violations such as unlawful data transfers for economic gain or major data breaches. Under the APPI, administrative supervisory authorities over personal information handling business operators that have committed violations of the law include the authority to issue guidance and advice, recommendation, and orders. However, if a violating business operator discontinues the unlawful conduct after receiving a recommendation or order, no penalties will be imposed. Consequently, the operator may retain the economic benefits gained from the violation without facing any punitive consequences.

Therefore, the PPC suggested that the fine amount should be equal to the financial benefit obtained from the use of personal data in violation of the APPI, by multiplying for instance the sales by a certain rate, keeping in mind that this should not cause excessive loss either. To be noted that the PPC maintained this proposal although strong opposition has been expressed at hearings by stake holders at the relevant organizations following the publication of the interim report.

Another key proposition comes from the realisation that it is, in practice, complicated (not to say impossible) for victims of violation of the APPI to obtain rightful compensation, for reasons relating to proof or the amount of damages per victim. To address this issue, the PPC considers the introduction of an injunction mechanism allowing certified consumer organizations to request the cessation of unlawful processing practices. A collective damage recovery system is also under review, to enable compensation for data subjects in cases of mass data leaks.

Impact on businesses

Based on the content of the Proposal Draft, businesses who process such personal data are advised to review their internal systems to assess whether they may benefit from the relaxation of consent requirements and reporting obligations, and to prepare to amend the rules related to the processing of biometric data and children’ personal information, that are very likely to be enhanced. More specifically, it is necessary to examine whether the services collecting personal information are directed at individuals under the age of 16, to ensure that users are properly notified of the purposes of use, to review the methods by which consent is obtained, and to assess the design of personal information input interfaces and terms of use.

As additional requirements may be placed on businesses depending on future discussions or public comments to the Proposal Draft, it is recommended to closely monitor what kind of impact these changes will have, even prior to formal amendment of the law, and to consider establish an internal system to ensure alignment with the possible new rules.

Megumi Murakami | Shahzel Asghar

 

NEWS FROM LPA

Milestone | As part of its international strategy, LPA Law expands in Asia with the integration of APFL Partners Vietnam LLC, a leading international law firm in Vietnam. Effective since February 2025, this strategic growth, based on complementarity and a shared vision, enables companies wishing to invest in Vietnam to benefit from the legal support of a multicultural team that has proven expertise in key sectors such as real estate, manufacturing, energy, agribusiness, hospitality, infrastructure, distribution, and media in Asia. With 50 multicultural and multilingual lawyers across six strategic Asian cities – Hong Kong, Shanghai, Tokyo, Singapore, Hanoi, and Ho Chi Minh City – LPA Law is reinforcing its position as the leading French-speaking law firm in the region, offering in-depth local expertise combined with a global vision. LinkedIn 

International | LPA Law held its International Days in Paris in March 2025, bringing together representatives from offices worldwide. The event fostered collaboration, knowledge sharing, and strategic alignment across jurisdictions. Partners engaged in productive discussions to better address clients’ international challenges. These sessions strengthened our commitment to delivering seamless, innovative, and tailored global solutions. LinkedIn 

Appointment | Kosuke Oie, Partner at LPA Tokyo, has been appointed as Scholarship Officer of the Human Rights Law Committee at the International Bar Association as of April 2025. In his new role, Kosuke will further advance his longstanding commitment to Human Rights by fostering collaboration with foreign bar associations and strengthening his international engagement. LinkedIn 

Past event | In March 2025, LPA Law in Paris hosted an engaging event organized by FrenchFounders, focusing on China’s growing impact on the global economy. Fanny Nguyen, Partner at LPA Shanghai, moderated a dynamic discussion with investor and author David Baverez. The session offered valuable insights into the challenges and opportunities of China’s evolving economic role. LinkedIn  

Past event | Nicolas Vanderchmitt, Managing Partner at LPA Hong Kong, led an insightful masterclass organized by the French Chamber of Commerce in Hong Kong on April 9, 2025. The session delved into key clauses, negotiation strategies, and best practices for structuring shareholder agreements. Attendees gained valuable tools to confidently manage equity partnerships and align stakeholder expectations. 

Past event | Bérengère Roig, Managing Partner at LPA Singapore, was honored to moderate a  panel discussion on “M&A : Tirer des enseignements des échecs pour construire des succès durables” organized by FrenchFounders in Singapore in April 2025. This event offered a unique opportunity to explore the challenges, risk factors, and potential pitfalls of mergers & acquisitions, topics that are often overlooked but are essential to the success of such transactions. LinkedIn (in French) 

Past event | Bérengère Roig, Managing Partner at LPA Singapore, had the privilege of co-leading a workshop on “Crisis Communications – How to Effectively Communicate Through Crisis Scenarios” during the Preferred Hotels & Resorts Global Conference 2025 organized in Singapore in May. Alongside esteemed speakers, Bérengère provided a Legal Analysis of scenarios arising from real crisis situations in the hospitality sector. LinkedIn