Significant Investment Review Bill

    

The bill focuses on regulating investments in what the Singaporean Government deems as critical entities. Any entity incorporated, formed, or established in Singapore, conducting activities in the country, or providing goods and services to people in Singapore may fall under this classification. This triggers various ownership and control requirements for buyers, sellers, and the entities themselves.

    

Buyers will be obligated to notify the Minister for Trade and Industry upon acquiring 5 % control in the entity with prior ministerial approval required at 12 %, 25 %, or 50 % control or when becoming indirect controllers. Sellers will need to seek approval when relinquishing 50 % or 75 % control. 

     

Critical entities must seek approval for key personnel appointments such as the CEO, directors and chairpersons of the board. The Minister holds the power to remove key officers in the interest of national security. In case of threats to national security, or delivery of essential services is disrupted, the Minister can issue orders for assuming control of designated entities affairs, business and property to ensure business continuity.

   

Additionally, the bill grants the Minister authority over non-designated entities with a history of jeopardizing Singapore’s national security, allowing orders for divestment of any equity interests.

    

This comes in the midst of a global trend to secure essential services, industries and infrastructure that emerged in the 2000s after the financial crises and accelerated during the Covid-19 pandemic. For example, a 2022 bid by the State-owned Chinese shipping giant Cosco for a strategic investment of 35 % in a terminal at the port of Hamburg, Europe's second largest port, sparked a public debate on foreign investment in essential infrastructure that ended with the German federal government approving a purely financial stake of 24.9 %. 

    

Despite the broad scope for intervention granted by the bill, Singapore`s Minister of Trade and Industry, Kim Yong Gan, assured that “it is critical for Singapore to remain open and connected to the world, and as such, we must continually strengthen our position as a trusted hub for businesses to invest with confidence”.