By Dezan Shira & Associates
Last week, the Intellectual Property Office of Singapore (IPOS) launched a new financial technology (FinTech) Fast Track initiative that provides an expedited patent application-to-grant process for financial technology innovations. Under this initiative, FinTech patents will be granted to investors in as early as six months, as opposed to the minimum two years for normal applications.
The initiative aims to support the growing demand for FinTech solutions in Singapore, and help FinTech startups bring their innovations to the market more rapidly. It aims to help Singapore’s innovative enterprises to compete effectively through their intellectual property and use these intellectual assets to expand and enter the world’s market. It will also allow startups to efficiently operate within the country’s regulatory policies and financial infrastructure.
By Dezan Shira & Associates
In a bid to attract more investment to support the country’s economic growth, Indonesia recently issued a new regulation granting a 100 percent Corporate Income Tax (CIT) cut to new FDI-backed businesses.
Further, the new regulation grants tax holidays to new investors in any of the 17 pioneer industries including transportation, telecommunications, robotic components, oil and gas refinery, train engines, medical devices, pharmaceutical raw materials, power plant machinery, and processing of metals and agricultural products among others. Pioneer industries are those that create added value, introduce advanced technology and have strategic value for the national economy. Previously, the provision was available to only eight such industries.
Myanmar: Government exempts emeralds and diamonds from Special Commodity Tax
The government has decided to exempt emeralds and diamonds from Special Commodity Tax (SCT) with immediate effect. Raw and uncut emeralds and diamonds were taxed at the rate of 10% and their processed and cut variants were taxed at the rate of 5% until recently. Further, the government has abolished the 5% commercial tax on gold nuggets.
The government expects the tax exemptions will lead to a decline in the smuggling of the mentioned items and lead to an increase in their import through legal channels. The tax waivers are also expected to provide a much needed boost to the country’s gems and jewellery sector.
Laos: Profit tax and land lease fee exemptions announced for tourism investors
According to Laos’ Deputy Minister of Information, Culture & Tourism, Ounethouang Khaophanh, foreign investors in the country’s tourism sector will be exempted from the payment of profit tax for four years and land lease fees for ten years. To qualify for the incentives, foreign investors should invest in the development of infrastructure and facilities at the country’s newly identified sites of tourist interest.
In 2016, a study commissioned by the government identified more than 2100 potential sites of tourist interest in the country. Only 40% of those sites have been developed into visitor sites. The government’s latest move comes as part of its bid to upgrade the country’s tourism infrastructure through funding from foreign investors.
Malaysia: GST exempted for supplies directly related to exported goods
Malaysia’s finance ministry recently issued an order exempting suppliers from the need to charge Goods and Services Tax (GST) on certain goods and services directly connected to exports. The GST relief, which came into effect from July 1, 2017, will apply to four broad categories of services and supplies directly connected to exports and export processing. These include handling or storage services related to goods for export; services provided by a company with licensed manufacturing warehouse status or a business operating in a free zone; research and development (R&D) services related to goods for export; and tools or machines which are highly specialized in nature and used for the manufacture of goods in Malaysia for export.
To qualify for the GST waiver, the recipient of the goods and services must be an overseas customer of foreign nationality, who is resident abroad at the time of receiving the goods and services, and who does not own a business entity in Malaysia. Certain categories of the aforementioned goods will require the approval of Malaysia’s Director General of Customs to avail of the GST waiver. Further, the goods for which the supplies are made must be exported within a period of 60 days from the date of the completion of the services.
Myanmar: Trade in construction materials, hospital equipment and agricultural goods opened to foreign companies
Foreign companies will now be allowed to engage in both retail and wholesale trade in construction materials, hospital equipment, and agricultural goods such as seeds, fertilizers and pesticides. Previously, overseas firms were allowed to trade in these commodities only if they entered into a joint venture with a local company. The Myanmar ministry of commerce’s latest decision to open these sectors to foreign wholly foreign-owned enterprises (WFOEs) comes as part of its bid to make the domestic market more competitive.
According to the commerce ministry, there have been complaints from local traders about the presence of poor quality products smuggled from across the country’s land borders. The liberalization of trade in these sectors is expected to lead to the availability of better-quality equipment and materials in Myanmar. However, foreign companies have been urged to comply with prescribed health and safety codes and internationally accepted trade procedures. They will also be required to open bank accounts in Myanmar with foreign capital.
Malaysia: Tourism tax comes into effect from August 1
Malaysia’s customs department has announced that with effect from August 1, foreign visitors as well as domestic tourists will have to pay a tourism tax to operators of different types of accommodation. The tax, which has to be paid regardless of business or leisure travel, has been fixed at RM20 (US$5) for five-star hotels, RM10 (US$2.5) for four-star, RM5 (US$1.25) for three-star, and RM2.5 (US$0.62) for non-rated accommodation.
Accommodations such as traditional kampong stays and homestays as well as premises with less than 10 rooms are exempted from the new tax. The tourism tax will be levied over and above the goods and services tax and service charges.