LPA Asia Smart News

19 December 2025

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

Welcome to the AI & data matrix – Vietnam reloaded

Hong Kong

Hong Kong FSIE Regime: IRD issues further clarifications (July 2025)

China

PRC Supreme Court strengthens employees’ right to reinstatement in labor disputes

China tightens cross-border data transfers: certification becomes unavoidable

Singapore

VCCs in Singapore: the new standards shaping fund platforms and M&A

Singapore Employment Law: December 2025 updates

Japan

Key amendments to Japan’s Subcontract Act Effective January 2026

NEWS FROM LPA

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LEGAL INSIGHTS IN ASIA

Welcome to the AI & data matrix – Vietnam reloaded

Artificial intelligence (AI) and data governance have rapidly become central issues worldwide, with governments introducing new frameworks to balance innovation, security, sovereignty and individual rights.

In Asia, several countries, including Singapore, China, and Japan, have established comprehensive strategies to regulate AI and strengthen data protection, setting benchmarks for this digital transformation. Against this backdrop, Vietnam is introducing rules to regulate both AI and the use of personal data.

Vietnam’s Digital Governance Architecture: Three Pillars

Vietnam’s National Assembly has established a three‑pillar legal architecture to regulate data, personal information, and artificial intelligence. Each law builds upon the other, creating a layered framework that balances innovation with accountability.

Foundational Layer – Law on Data (Law No. 60/2024/QH15)

Effective from July 2025, the Law on Data provides the broadest framework for digital governance. It regulates the collection, storage, transfer, and management of both personal and non‑personal data. Companies and private organizations must ensure lawful processing, contribute accurate information to the National General Database, and avoid creating barriers to data portability. The law also embeds obligations around environmental responsibility and ethical use of data, positioning data governance as a cornerstone of Vietnam’s digital economy.

This law provides the foundational layer of Vietnam’s governance system, setting the stage for more specialized regulations on personal data and AI.

Specialized Layer – Personal Data Protection Law (PDPL – Law No. 91/2025/QH15)

Adopted in June 2025 and effective from January 2026, the PDPL replaces Decree No. 13/2023/ND‑CP and introduces a comprehensive framework for safeguarding personal data.

The PDPL narrows the focus to personal data rights and protections. It requires explicit, informed consent for data processing, imposes strict safeguards for sensitive categories (biometrics, health, financial records), and mandates Data Protection Impact Assessments (DPIAs) for all personal data processing activities. Organizations must designate compliance officers, maintain transparency, and adhere to sector‑specific rules in finance, healthcare, and telecommunications.

The PDPL also extends extraterritorial reach, requiring foreign companies handling Vietnamese citizens’ data to comply.

Advanced Layer – Law on Digital Technology Industry (DTI Law – Law No. 71/2025/QH15)

Also effective from January 2026, the DTI Law represents Vietnam’s first AI‑specific regulatory framework.

It adopts a broad definition of AI systems (Art. 3(9)), covering any machine‑based system that generates predictions, content, recommendations, or decisions. Companies deploying AI must comply with cybersecurity and data protection laws (Art. 10), ensure transparency in AI‑driven processes, and avoid prohibited acts such as misuse of AI to infringe on national security, human rights, or social ethics. The law also introduces obligations around controlled testing, environmental sustainability, and contributions to national digital technology databases.

This layered approach ensures that Vietnam’s digital transformation is governed at every level—from general data management, to personal data protection, to advanced AI oversight. It positions Vietnam as a regional leader in building a trusted, secure, and innovation‑friendly digital economy.

In addition to the three pillars outlined above, Vietnam has established a complementary legal framework to safeguard its digital environment. Law No. 24/2018/QH14 on Cybersecurity sets out a comprehensive “security frame” designed to protect critical information systems, user data, and the integrity of Vietnam’s cyberspace. It empowers the State to regulate online content, ensuring national security and mitigating risks of cyber‑attacks. Meanwhile, Law No. 86/2015/QH13 on Cyber information Security provides the technical standards and specifications necessary to implement robust cyber information safeguards. Recognizing the overlap between these two regimes, the legislature has announced that they will be consolidated into a single, unified law, thereby streamlining Vietnam’s approach to cybersecurity and information protection.

AI and Data Processing Definitions under Vietnam’s PDPL and DTI Law

Broad Definition of AI

The DTI Law adopts a deliberately expansive definition of artificial intelligence. Its Article 3(9) covers any machine‑based system that generates predictions, content, recommendations, or decisions. This formulation is not limited to advanced machine learning or neural networks; it also captures:

• Traditional statistical models used for forecasting or risk assessment.
• Non‑ML data analysis tools, such as rule‑based systems or regression models.
• Algorithmic computation that produces automated outputs.
• Decision‑support and automated decision‑making systems, even if relatively simple.

The breadth of this definition means that any automated system deployed in Vietnam, from HR recruitment algorithms to financial risk scoring tools, falls within the regulatory perimeter. This ensures that oversight is not confined to “cutting‑edge AI” but extends to the full spectrum of automated technologies influencing human or organizational decisions.

Wide Scope of Personal Data Processing

The PDPL complements this by adopting an equally wide formulation of “personal data processing.” Article 2(6) defines processing as any activity impacting personal data, explicitly listing:

• Collection, analysis, and summary.
• Encryption and decryption.
• Modification, deletion, destruction, and de‑identification.
• Provision, disclosure, and transfer.
• Other activities impacting personal data (a catch‑all clause ensuring no loopholes).

This definition is intentionally comprehensive, covering the entire lifecycle of data—from initial acquisition to final disposal. It also extends to both manual and automated operations, meaning that even routine administrative handling of personal data is subject to PDPL obligations.

Special Safeguards for Emerging Technologies

Article 30 of the PDPL introduces a technology‑specific safeguard, recognizing that environments such as big data, AI, block chain, virtual space, and cloud computing pose heightened risks. It requires that personal data in these contexts be:

• Processed properly within a scope of necessity, limiting data use to what is strictly required for the stated purpose.
• Handled in a way that ensures the legitimate rights and benefits of data subjects – embedding fairness, transparency, and accountability into digital ecosystems.

This provision effectively creates a principle of proportionality: organizations must demonstrate that their use of advanced technologies does not exceed what is necessary, and that individuals’ rights remain protected even in complex, decentralized, or opaque systems.

Obligations for companies and organisations

Under the Law on Data

The Law on Data establishes a comprehensive framework for the management, protection, and use of digital data in Vietnam. It applies broadly to state agencies, private enterprises, and foreign‑invested organizations engaged in data activities.

Anticipating the PDPL, organizations must ensure that data collection and processing activities are lawful, transparent, and limited to the scope of necessity. They are required to respect the rights of data subjects, including the right to be informed, the right to access, and the right to request correction or deletion of inaccurate data.

Companies must adopt technical and organizational measures to safeguard data against unauthorized access, loss, or misuse. This includes secure storage systems, encryption, and regular audits to ensure compliance with cybersecurity standards.

Under the DTI Law

Under the DTI Law, private organizations face a series of structured obligations designed to ensure accountability, transparency, and trust in Vietnam’s digital economy.

First, companies must comply with the state’s management regulations governing the digital technology industry. This includes adherence to technical standards, regulatory requirements, and quality norms for all digital technology products and services. Beyond compliance with standards, firms are also required to guarantee cyber safety and security in their operations, aligning their practices with Vietnam’s broader laws on cybersecurity, data protection, and personal data management.

The law also provides a framework for controlled testing of digital technology products and services. Organizations may conduct such testing to innovate and validate new solutions, but only within the boundaries of the DTI Law and related legislation on science, technology, and innovation. While liability exemptions are granted during controlled testing, these protections are conditional—fraudulent use of the mechanism or attempts to exploit exemptions unlawfully are strictly prohibited.

In addition, the DTI Law imposes significant data obligations on enterprises. Companies must not create commercial or technical barriers that prevent clients from storing or transferring their digital data. They are encouraged to self‑assess and publicly announce the quality of their digital data before releasing products to the market, thereby promoting transparency and consumer confidence. Furthermore, organizations are required to provide, collect, and update information into the national digital technology industry database accurately and promptly, ensuring that regulators and stakeholders have reliable data to support oversight and policy development.

Under the PDPL

Under the PDPL, organizations face a comprehensive set of obligations designed to safeguard individual rights and ensure responsible data governance.

At the heart of these requirements lies the principle of user consent. Companies must obtain clear, informed, and explicit consent before collecting or processing personal data. Consent must be tied to a specific purpose, properly documented, and revocable at any time. When dealing with sensitive categories of information—such as biometric identifiers, health records, or financial data—the law imposes an even higher threshold, requiring enhanced disclosure and stronger safeguards to protect individuals.

Beyond consent, the PDPL establishes strict rules for data protection. Firms are required to implement both technical and organizational measures to secure personal information. This includes encryption, secure servers, access controls, and audit trails. Special emphasis is placed on sensitive data, with mandatory risk assessments and confidentiality protocols for systems that rely on artificial intelligence. These measures are intended to prevent unauthorized access, misuse, or breaches that could undermine public trust.

To ensure accountability, organizations must also fulfil specific responsibilities. They are required to designate responsible DPOs tasked with overseeing adherence to the law.

Companies must maintain compliance records, conduct regular internal audits, and ensure transparency in how data is collected, processed, and shared. Public disclosure of data handling practices, through privacy notices and reporting, is a key element of this accountability framework.

The PDPL further recognizes that certain industries handle data of heightened sensitivity and therefore imposes sector‑specific rules. In finance, stricter requirements apply to customer profiling, credit scoring, and cross‑border transfers. In healthcare, enhanced safeguards are mandated for medical records, genetic data, and patient confidentiality. In telecommunications, obligations extend to metadata, geolocation, and surveillance risks. These tailored rules reflect the government’s recognition that misuse in these areas could have systemic or life‑critical consequences.

Companies that fail to meet PDPL requirements may face administrative fines, suspension of operations, or even revocation of business licenses. Beyond legal penalties, reputational damage is a serious risk, particularly in industries where consumer trust is paramount. While the PDPL narrows the extraterritorial scope compared to earlier rules, foreign companies processing the personal data of Vietnamese citizens must still comply. This includes cloud providers, multinational corporations, and offshore service centres handling HR or customer data.

Recommended Best Practices for Companies

• Conduct Comprehensive Data Audits
  • Map out all categories of data collected (personal and non‑personal).
  • Identify where data is stored, how it flows across systems, and who has access.
  • Classify data according to sensitivity to align with PDPL and Law on Data requirements.
  • Regularly update records to ensure compliance with obligations to contribute accurate information to national databases.
• Strengthen Consent and Transparency Mechanisms
  • Ensure user agreements are clear, accessible, and purpose‑specific, meeting PDPL standards for explicit consent.
  • Provide mechanisms for users to withdraw consent easily.
  • For sensitive data, implement enhanced disclosure and safeguards.
  • Publish transparent privacy notices and data handling policies to meet accountability obligations under both PDPL and Law on Data.
• Establish a compliance Infrastructure
  • Appoint Data Protection Officers (DPOs) or compliance managers to oversee adherence.
  • Establish monitoring systems, audit trails, and incident response protocols.
  • Train staff regularly on data protection, cybersecurity, and AI ethics.
  • Integrate compliance with environmental obligations under the DTI Law (e.g., sustainable disposal of digital products).
• Prepare for AI Oversight and Governance
  • Document AI models, algorithms, and decision‑making processes in line with DTI Law requirements.
  • Conduct AI risk assessments and Data Protection Impact Assessments (DPIAs) for automated decision‑making systems.
  • Ensure AI systems comply with cybersecurity and data protection laws, and avoid prohibited uses (e.g., misuse of biometric recognition).
• Engage Regulators
  • Maintain proactive dialogue with regulators to clarify obligations and reduce compliance risks.
  • Ensure timely submissions of DPIAs.
  • ensure compliance with PDPL’s extraterritorial provisions.

Toward a Fourth Pillar: the draft law on AI

While Vietnam’s digital governance architecture is currently anchored in the Law on Data, the PDPL, and the DTI Law, a forthcoming Artificial Intelligence Bill is beginning to take shape. Still in draft form, this proposed legislation reflects Vietnam’s intent to align with global trends in regulating high-risk AI systems.

The draft AI Bill introduces a principle of compliance, requiring all AI systems to adhere to existing data protection laws. It also identifies unacceptable risk categories, notably:

• The use of real-time remote biometric recognition in public spaces.
• The creation or exploitation of large-scale facial recognition databases through untargeted image collection from the internet or surveillance cameras.

Although detailed provisions are still pending, the draft highlights several regulatory gaps that future decrees and technical guidelines are expected to address, including:

• Algorithmic control and auditability;
• Transparency in AI decision-making;
• Legal liability of autonomous systems; and
• Access rights to training datasets.

This emerging legislation signals Vietnam’s ambition to move beyond foundational data and AI governance toward a risk-based, principle-driven AI regulatory framework, echoing developments in the EU, Singapore, and other jurisdictions.

Together, these four components, Data Law, PDPL, DTI Law, and the Law on AI in development will form a progressively layered and responsive legal ecosystem, positioning Vietnam as a proactive regulator in the age of digital transformation.

Etienne Laumonier

 

Hong Kong FSIE Regime: IRD issues further clarifications (July 2025)

The Hong Kong Inland Revenue Department (IRD) continues to refine the administration of the Foreign-Sourced Income Exemption (FSIE) regime. On 24 July 2025, the IRD published additional FAQs that provide welcome clarification on the treatment of dividends, disposal gains, bond transactions and in-kind distributions. These developments are particularly relevant for multinational enterprise (MNE) groups with offshore investment and treasury structures.

Below is a practical summary of the latest guidance, read together with earlier IRD positions.

1. FSIE Regime – brief context

Hong Kong’s FSIE regime, introduced in 2023 and expanded from 1 January 2024, represents a significant shift from its traditional territorial tax system. Foreign-sourced passive income received in Hong Kong is now taxable unless specific exemption conditions (economic substance or participation exemption) are met.

Originally limited to interest, dividends, equity disposal gains and IP income, the regime was extended in 2024 to cover non-equity disposal gains, increasing both scope and compliance complexity.

2. Key clarifications from the IRD (July 2025 FAQs)

(a) Share of profits from overseas associates – not a dividend

The IRD confirms that a Hong Kong taxpayer’s share of profits from an overseas associate recognised under the equity method (HKAS 28) does not constitute a dividend for FSIE purposes. Such accounting entries merely reflect changes in the value of the investment and do not represent an actual distribution of profits.

Only when profits are formally declared and distributed by the overseas associate will the income be treated as a dividend under the FSIE regime.

Practical implications

• FSIE exposure depends on the year of dividend declaration, not the year in which profits are recognised in the income statement.
• Substance or participation exemption conditions must therefore be satisfied in the year the dividend is declared.
• As dividend declarations are not reflected in profit and loss accounts, taxpayers should implement controls to track declarations and distributions separately from accounting results.

(b) Deductibility of expenses relating to disposal gains

Where foreign-sourced disposal gains are deemed taxable under the FSIE regime, the IRD confirms that such gains are computed by reference to disposal proceeds less acquisition cost and direct expenses incurred on acquisition and disposal (e.g. legal fees, brokerage fees and stamp duty).

Other expenses incurred in producing the disposal gain may also be deductible, provided they satisfy the normal deduction rules under the Inland Revenue Ordinance. Capital expenditure remains non-deductible, and certain expenses (such as interest) are subject to specific statutory conditions.

Practical implications

• Detailed documentation is required to distinguish direct disposal costs from other expenses.
• Careful analysis is needed to determine whether expenses are capital or revenue in nature.
• Interest and financing costs should be reviewed against statutory deductibility requirements, particularly in acquisition-driven structures.

(c) In-kind dividends – shares in overseas entities

The IRD clarifies that an in-kind dividend in the form of shares in an overseas entity will generally not be regarded as “received in Hong Kong” where the investee entity is incorporated and managed outside Hong Kong and has no Hong Kong operations or personnel.

This position is consistent with the IRD’s earlier advance ruling practice and reinforces a substance-based approach to determining the location of receipt.

Practical implications

• The tax outcome depends on the economic nexus and management location of the investee entity, rather than the mere fact that shares are distributed.
• In-kind distributions are particularly relevant in group reorganisations and upstream dividend planning.
• Taxpayers should carefully document the overseas nature of the investee’s management and operations.

(d) Clarification of “received in Hong Kong”

Beyond in-kind dividends, the IRD reiterates that foreign-sourced income is regarded as received in Hong Kong only if it is:

• remitted to Hong Kong;
• used or applied in Hong Kong; or
• used to satisfy a debt incurred in respect of a trade or business carried on in Hong Kong.

Mere recording of income in Hong Kong-based accounting records or financial statements is insufficient to constitute receipt.

Practical implications

• FSIE analysis is driven by actual cash flows and economic use, not bookkeeping entries.
• Treasury and finance teams must align operational practices with tax reporting positions.
• Clear audit trails should be maintained to demonstrate where and how foreign-sourced income is received or applied.

3. Looking ahead

While the July 2025 FAQs provide helpful clarity, FSIE remains an evolving regime. Further guidance from the IRD is expected as new fact patterns emerge. Taxpayers with complex offshore, investment or treasury structures should consider advance rulings where uncertainty exists.

Marie-Gabrielle du Bourblanc

 

PRC Supreme Court strengthens employees’ right to reinstatement in labor disputes

The PRC Supreme People’s Court (“SPC”) released the Interpretation on Several Issues Concerning the Application of Law in the Trial of Labor Disputes (II) (the “Interpretation II”), effective as of September 1, 2025.

Comprising 21 articles, Interpretation II addresses long-standing inconsistencies in labor dispute adjudication across different regions in China. One of its most significant developments concerns employees’ claims for reinstatement of the labor relationship following termination.

A Shift from Discretion to Protection

Historically, the claims of employees for reinstatement of labor relationship were not commonly supported. Employers could easily refuse to reinstate labor relationship with employees by citing reasons such as the original position already being occupied or the loss of mutual trust between the parties.

Interpretation II marks a clear departure from this approach. It significantly strengthens employee protection by restricting the circumstances under which employers may refuse reinstatement. Under the new framework, employers may only deny reinstatement where specific, objective conditions expressly set out in Interpretation II are met. Outside of these limited exceptions, courts are expected to support reinstatement whenever requested by the employee.

Financial consequences for employers

Reinstatement is not the only consequence. Where reinstatement is ordered, the original employer must also retroactively pay the employee’s remuneration for the entire period from the date of dismissal until the actual date of reinstatement. This can result in substantial financial exposure, particularly in disputes with lengthy proceedings.

Practical implications

It is foreseeable that courts will increasingly uphold reinstatement claims under this new judicial guidance. As a result, employers should reassess their termination strategies and carefully evaluate the legal and financial consequences before implementing any unilateral termination.

Prudent documentation, strict procedural compliance, and early legal risk assessment will become even more critical in managing employment disputes in China under this evolving judicial landscape.

Fanny Nguyen | Hélène Liu

 

China tightens cross-border data transfers: certification becomes unavoidable

Starting 1 January 2026, China takes a decisive step in data governance. The Measures for Cross-border Transfer Certification of Personal Information (the Measures) officially enter into force, removing long-standing uncertainty around whether and how personal data transfers from mainland China must be certified under the Personal Information Protection Law (PIPL).

Who is covered?

• Applicable Entities: processors other than Critical Information Infrastructure Operators (non-CIIOs*).
• Cross-border data transmission volume criteria: Cumulative provision of 10,000 to 100,000 people’s non-sensitive personal information to overseas destinations within the current year, or provision of fewer than 10,000 people’s sensitive information that does not involve important data under the Data Protection Law.

*The cross-border transfer of important data and CIIOs’ personal information remains subject to the data cross-border security assessment process.

Mandatory preconditions

Before applying for certification, data processors must:

• Inform data subjects of the intended cross-border transfer and obtain
  separate consent;
• Conduct a Personal Information Protection Impact Assessment (PIPIA),
  covering:
  • the compliance capability of overseas recipients,
  • legal, technical, and security risks of the transfer.

Certification process

• Applications must be filed with a qualified professional certification body;
• Overseas entities may act through PRC-based service providers or appointed
  representatives;
• Certifications are valid for three years.

Why it matters

With the Measures, China now has a fully articulated compliance framework for cross-border personal data transfers under the PIPL.
For foreign-invested enterprises in China, data sharing with overseas parent companies is no longer a grey area.

As of 1 January 2026, non-compliance is no longer defensible.

Fanny Nguyen | Estelle Chen

 

VCCs in Singapore: the new standards shaping fund platforms and M&A

Singapore’s Variable Capital Company (VCC) regime has rapidly become one of the most flexible fund-structuring options in Asia. The ability to establish an umbrella vehicle with multiple ring-fenced sub-funds allows managers to segregate strategies, assets and investor groups within a single entity. This structure is increasingly relevant in transactions involving portfolio consolidation, co-investment arrangements or the acquisition of multi-strategy platforms.

The VCC’s attractiveness is reinforced by its access to Singapore’s tax exemption schemes for funds, including the 13O and 13U regimes, provided substance and investment-management conditions are satisfied. This combination of structural flexibility and tax efficiency makes the VCC especially appealing to private equity sponsors and investment groups seeking to base their regional platforms in Singapore.

Recent regulatory developments highlight MAS’s heightened expectations following its thematic review. The regulator has emphasised the need for genuine economic substance, active portfolio management and robust governance, underlining that VCCs must not operate as passive asset-holding vehicles. Custody arrangements must be appropriate for the assets held, directors involved in regulated activities must be properly licensed and AML/CFT responsibilities remain with the VCC even when functions are outsourced. MAS has also drawn attention to dormant vehicles with no assets or investors and encouraged timely rationalisation.

In the M&A context, while this structure is not always the most suitable, the VCC can nonetheless offer valuable opportunities for deal planning and execution. Acquirers can use VCC sub-funds to isolate newly acquired assets or business lines, enabling cleaner ring-fencing of risk, investors and performance. Where buyers are acquiring several targets across different jurisdictions, the VCC can serve as a central platform for consolidating asset ownership, harmonising governance and generating tax-efficient returns under a single Singapore-based framework. The structure also allows sponsors to create dedicated sub-funds for co-investors joining specific acquisitions, without disturbing the broader investment strategy of the umbrella vehicle. For transactions involving carve-outs, the VCC’s flexibility supports the rapid creation of sub-funds tailored to the acquired portfolio, allowing sponsors to integrate assets while maintaining clear separation of liabilities and exit timelines.

As a result, the VCC has evolved from a fund-structuring innovation into a practical transaction tool, offering buyers a sophisticated and efficient framework for acquiring, organising and managing regional assets from Singapore.

Bérengère Roig

 

Singapore Employment Law: December 2025 updates

1. Adoption of the Workplace Fairness (Dispute Resolution) Bill[[1]]

As mentioned in our last newsletter “Singapore Employment Law: September 2025 updates” dated 3^rd October 2025, the Workplace Fairness Act 2025 was adopted by Parliament on 4^th November 2025, as announced by Ministry of Manpower (“MOM”).

The Workplace Fairness (Dispute Resolution) Bill (the “Bill”) establishes Singapore’s first statutory framework for addressing workplace discrimination. It introduces a civil claim mechanism allowing employees or job applicants to challenge adverse employment decisions made based on protected characteristics. Before a claim may proceed to the Employment Claims Tribunals (“ECT”) or the High Court, the parties must first attempt mediation with a third-party mediator approved by the Commissioner for Workplace Fairness – the statutory authority responsible for administering and overseeing the workplace fairness dispute-resolution process[2]. If mediation is unsuccessful, claims of up to SGD 250,000 will be heard by the ECT under a simplified, judge-led process without legal representation, while more complex or higher-value matters may be referred to the High Court.

All discrimination claims will be heard in private to safeguard confidentiality and prevent unnecessary public exposure. The Bill also introduces safeguards against frivolous or abusive claims, empowering employers and the courts to strike out unmeritorious cases, impose cost orders, and address repeated misuse of the process.

The framework is intended to promote workplace harmony by encouraging early and amicable dispute resolution, while ensuring a fair avenue for genuine claims. The Bill is expected to come into force by the end of 2027, with MOM, the Tripartite Alliance for Fair & Progressive Employment Practices and the Tripartite Partners providing guidance and training to help employers prepare. Its broader objective is to encourage fair, respectful and transparent workplace practices.

2. Updated Employment Pass Qualifying Salary Thresholds from 2026[[3]]

From 1^st January 2025 for new applications and from 1^st January 2026 for renewals of passes, the employment pass qualifying gross monthly salary will increase from the current minimum of SGD 5,000 to SGD 5,600 for younger candidates, with age-adjusted thresholds rising progressively to SGD 10,700 for candidates aged 45 and above (previously capped at SGD 10,500).

In the financial services sector, the qualifying gross monthly salary will increase from SGD 5,500 to SGD 6,200 for younger candidates, with the upper age-adjusted limit rising from SGD 11,500 to SGD 11,800 for candidates aged 45 and above.

3. Ceasing of the Work Permit (Performing Artiste) Scheme from 1 June 2026[[4]]

The Work Permit (Performing Artiste) scheme, introduced in 2008 to allow licensed entertainment venues to hire foreign performers for short-term engagements, has been subject to extensive misuse. Recent enforcement operations uncovered syndicates using the scheme to place performers in unlicensed employment. As the scheme no longer serves its intended purpose, MOM will cease accepting new applications from 1 June 2026. Existing performers may remain until their permits expire or are cancelled.

This decision was made following consultations with the Singapore Nightlife Business Association to allow affected businesses sufficient time to adjust. Companies may engage performers through service providers, hire eligible foreign artistes under regular work passes, or rely on the Work Pass Exempt framework for short-term performances meeting government criteria.

MOM and Ministry of Trade and Industry will continue monitoring developments in the nightlife sector together with industry partners.

4. Highlights from the Labour Force in Singapore Advance Release 2025[[5]]

Despite a slight drop in labour force participation in 2025, other indicators point to continued labour market resilience: rising real incomes[6], a high share of permanent employment, and low unemployment and under-employment.

Unemployment remained low across all demographic groups, with both Professionals, Managers, Executives and Technicians (“PMETs”) and non-PMETs recording similar rates of 2.8%. Long-term unemployment and labour underutilisation also declined, reflecting stable hiring conditions and ongoing demand for labour.

Real incomes increased for lower-wage and median workers, supported by the expansion of the progressive wage model. Although fewer residents changed jobs compared with the previous year, most job movers continued to experience real income gains.

Looking ahead, global uncertainties may moderate hiring, but government initiatives in skills development, job redesign and career support are expected to strengthen workforce resilience and improve long-term employment outcomes.

The full report is available at: https://stats.mom.gov.sg/Pages/mrsd-labour-force-in-singapore-advance-release-2025.aspx

*****

[[1]] Ministry of Manpower’s website, “Workplace Fairness (Dispute Resolution) Bill Provides Framework For Resolving Workplace Discrimination Disputes Amicably And Expeditiously”

[[2]] Singapore Statutes Online’s website, “Workplace Fairness Act 2025”

[[3]] Ministry of Manpower’s website, “EP qualifying salary (Stage 1)”

[[4]] Ministry of Manpower’s website, “Work Permit (Performing Artiste) scheme will cease from 1 June 2026”

[[5]] Ministry of Manpower’s website, “Labour Force in Singapore Advance Release 2025”

[[6]] Real incomes refer to workers’ earnings adjusted for inflation, reflecting their actual purchasing power.

Astrid Cippe | Candy Xiong

 

Key amendments to Japan’s Subcontract Act Effective January 2026

Effective January 1, 2026, the Subcontract Act will be revised and newly enforced as the Act on the Optimization of Transactions with Small and Medium-sized Subcontracted Operators (commonly referred to as the “Toriteki Act”). As a result, the rules governing subcontracted transactions will undergo significant changes. The amendment significantly expands the scope of regulated transactions by adding employee-based criteria and introducing a new category, specified transportation outsourcing. It also adds new prohibited practices, including refusing price negotiations and banning payment by promissory notes. Terminology used under the Act will be updated as well. Contracting enterprises will need to review their practices to ensure fair and compliant transactions.

Under the current Subcontract Act, the scope of regulated subcontracting transactions is determined by (i) the nature of the transaction and (ii) the capital of the parties. Based on these criteria, ordering enterprises that fall into certain capital categories are deemed to hold a “superior position,” and the Act seeks to regulate more promptly and effectively any unjust conduct by such parent enterprises in subcontracting relationships.

The key points of the amendment are as follows:

1. Expansion of the Scope of Application

• Revision of the criteria for enterprises
  In addition to the existing capital-based criteria, new employee-number thresholds have been introduced: 300 employees for manufacturing-related outsourcing and 100 employees for service-related outsourcing.
• Addition of new types of transactions
  In addition to manufacturing outsourcing, repair outsourcing, information product creation outsourcing, and service outsourcing, a new category—“specified transportation outsourcing”—has been added. This refers to transactions in which an enterprise outsources transportation services to another operator for goods sold by the enterprise or goods it has manufactured or repaired for the counterparty.

2. Introduction of new prohibited practices
New prohibited conducts include unilaterally setting the subcontract price by refusing to engage in price negotiations or failing to provide necessary explanations despite a request from the subcontractor, as well as prohibiting payment by promissory notes so that subcontractors can receive payment more promptly.

3. Other changes
Terminology will also be revised: for example, “subcontract price” will become “manufacturing outsourcing price,” and “parent enterprise” will become “contracting enterprise,” “subcontractor,” and “SME subcontracted operator,” among others.

In light of these amendments, contracting enterprises will need to be increasingly mindful of ensuring careful and appropriate conduct in their transactions with subcontracted operators to remain fully compliant.

Leila Kashiwakura

 

NEWS FROM LPA

Ranking | APFL Partners has once again been recognised for its expertise and commitment across four industry sectors and six practice areas in Vietnam in the asialaw 2025 rankings. Etienne Laumonier has also been individually ranked. LinkedIn

Ranking | Our LPA Law Shanghai and Hong Kong offices have been awarded, for the third consecutive year, in The Legal 500 Asia Pacific 2026 edition, respectively in Corporate and M&A Foreign Firms and Domestic and International Corporate Tax. LinkedIn

Ranking | APFL Partners has once again been recognised for its strong capabilities and commitment across three practice areas in Vietnam in the 2026 Chambers and partners Asia-Pacific rankings. Two lawyers have also been individually ranked. LinkedIn

Team | Sicong Chen joined LPA Singapore as Associate, effective from December 2025. Sicong is qualified in Singapore law (Attorney-at-Law, Singapore Bar). He advises clients on domestic and cross-border mergers and acquisitions, corporate restructuring, joint ventures, and general corporate advisory matters. LinkedIn

Past event | Last month, Kosuke Oie, partner at LPA Tokyo, and Scholarship Officer of the Human Rights Law Committee at the International Bar Association (IBA), represented the firm at the IBA Annual Conference in Toronto, contributing actively to several high-level discussions at the intersection of regulation, professional ethics, and human rights. LinkedIn 

Past event | On 11 November, during a Breakfast Talk “Vietnam: reaping the rewards of reforms” held in Singapore, our partners Arnaud Bourrut-Lacouture, Etienne Laumonier, and Antoine Logeay from APFL Partners explored how recent reforms are strengthening the country’s business environment, boosting foreign investment and positioning Vietnam as a key player in Asia’s market. LinkedIn 

Past event | As part of our ongoing efforts to strengthen collaboration across our LPA Law offices worldwide, Lionel Vincent, Managing Partner of LPA Tokyo, was pleased to participate and share key insights on current trends, strategic priorities and investment drivers in Japan during a Breakfast Talk held at our LPA Frankfurt office on 25 November. LinkedIn 

Past event | On 26 November, Lionel Vincent, Managing Partner of LPA Tokyo, led a Breakfast Talk on “M&A in Japan: Bridging Europe and Asia – Opportunities, challenges & strategies” at our LPA Law Paris office, where he shared valuable perspectives on the dynamics shaping Japan’s M&A environment. LinkedIn 

Past event | Viet Anh Pham, senior associate at APFL Partners, participated at the international colloquium “Le Droit et l’Intelligence Artificielle”, jointly organized by the Ambassade de France in Vietnam and the University of Economics and Law on 27 November in Ho Chi Minh City where she offered an insightful analysis of Vietnam’s regulatory framework on personal data protection in the context of AI. LinkedIn