Significant Investments Review Act Update: Singapore Publishes List of Designated Entities

A list of companies considered critical to Singapore’s national security interests was published on May 31, 2024 in the nation’s e-Gazette. The list is tied to the Significant Investments Review Act 2024 (the Act), which sets out new investment management regulations of significant investments in these companies, or “Designated Entities.”

The Act gives Singapore’s Minister for Trade and Industry (the Minister) the power to designate any entity (a Designated Entity) that is (1) incorporated, formed, or established in Singapore; (2) carries out any activity in Singapore; or (3) provides any goods and services to any person in Singapore.

Becoming a designated entity triggers the application of various notification and approval requirements, including but not limited to the following:

• After becoming a 5% controller of a designated entity, an investor has seven days to notify the Minister
• An investor must seek the prior written approval of the Minister before (1) becoming a 12%, 25%, 50%, or indirect controller of a Designated Entity or (2) acquiring, as a going concern, the business or undertaking (or any part thereof) of a Designated Entity
• An existing owner of a Designated Entity must seek the Minister’s prior written approval before ceasing to be a 50% or 75% controller of the Designated Entity
• Transactions completed in relation to Designated Entities without the necessary approvals are void
• The Minister’s approval is required for the appointment of a chief executive officer, director, or chairperson of the board of directors of a Designated Entity
• Such approval may be granted with or without conditions
• Such appointees may be removed by the Minister if (1) they were appointed without the Minister’s approval, (2) any condition of approval is breached, or (3) the Minister considers it necessary in the interest of national security

The Act and its related subsidiary legislation—the Significant Investments Review Regulations 2024 and the Significant Investments Review (Reviewing Tribunal) Rules 2024—came into force March 28, 2024. For more information, please refer to our November 2023 LawFlash: Significant Investments Review Bill Seeks to Enhance Singapore’s National Security Interests.

In a bid to be business-friendly, it is evident that the regulations under the Act are aimed at individual entities rather than whole sectors.