• Advised that the Cabinet approved the Amendment Bill of the Foreign Exchange and Foreign Trade Act on 18 October 2019, in relation to foreign direct investment (FDI).
• Follows JPN METI September 2019 announcement re legal categories revision.

Overview

• Under current rules, investment in designated business sectors requires prior-notification for screening, once the stake in a particular company exceeds 10%.
• In view of national security, public order and safety, smooth functioning of economy.
• The aim of the Bill is to further promote FDI conducive to sound economic growth.
• And to ensure minimal review of FDI that could pose risks to national security.
• The Bill introduces prior-notification requirement exemption, adjusts the FDI coverage.
• Prior-notification will no longer be required, even if the stake in a certain company exceeds 10%, if the investment is deemed to pose no risk to national security.
• For investment that could pose a national security risk, even acquiring a 1% stake in a company within a designated business sector will require a prior-notification.
• And an order could be issued re all the designated business sectors to sell one's stake.