Statutory Developments in Singapore’s Foreign Direct Investment Regime – commencement of Significant Investments Review Act and publication of initial list of designated entities

A. Significant Investments Review Act effective from 28 March 2024

The Significant Investments Review Act (the Act) came into force on 28 March 2024. The Office of Significant Investments Review has been established under the Ministry of Trade and Industry of Singapore to administer and operationalise the Act.

The Act complements existing sectoral legislation and introduces a new investment review regime, which includes ownership and control provisions relating to entities designated by the Minister as critical to Singapore’s national security interests, and powers that allow the Minister to review ownership or control transactions involving any entity that has acted against Singapore’s national security interests within a period of two (2) years after the transaction, regardless of whether the entity is designated. 

B. Publication of initial list of designated entities

On 31 May 2024, the Ministry released its initial list of nine entities designated under the Act, including entities in the petrochemical and defence sectors. The designated entities are:

• ST Logistics Pte. Ltd.;
• Sembcorp Specialised Construction Pte. Ltd.;
• ST Engineering Marine Ltd.;
• ST Engineering Land Systems Ltd.;
• ST Engineering Defence Aviation Services Pte. Ltd.;
• ST Engineering Digital Systems Pte. Ltd.;
• ExxonMobil Asia Pacific Pte. Ltd. subject to certain exemptions);
• Shell Singapore Pte. Ltd. (subject to certain exemptions); and
• Singapore Refining Company Private Limited.

The list of designated entities has been published in the Government Gazette. According to the Ministry, the list of designated companies will be reviewed as required, though there are no plans to significantly expand it in the near future. Designated entities may also be removed if they no longer meet the relevant criteria.

As a consequence of the designation, the designated entities are subject to ownership and control regulations under the Act. Where an entity becomes designated under the Act in the course of a transaction, the ownership and control provisions relating to such an entity as a designated entity will not apply if the transaction completes prior to the date on which the entity is designated.

In the meantime, investors with proposed transactions involving one or more designated entities should be aware of the requirements under the new regime. In particular:

1. prospective investors into designated entities are required to:
   1. notify the Minister within seven (7) days after becoming a 5% controller; and
   2. obtain the Minister's approval before becoming a 12%, 25% or 50% controller or an indirect controller, or acquiring as a going concern (parts of) the business or undertaking; and
2. existing investors in Designated Entities to obtain the Minister's approval before ceasing to be a 50% or 75% controller.

More information on the new regime has been covered in our article: Proposed Statutory Developments in Singapore’s Foreign Direct Investment Regime – Significant Investments Review Bill.