Review under way to simplify Singapore’s foreign law firm licensing framework, strengthen local practice independence
Committee addressing concerns that the current system is too complex
[SINGAPORE] The Ministry of Law (MinLaw) is studying recommendations to streamline how foreign law firms can practise here, addressing concerns that the current regulatory framework is too complex and risks undermining the independence of local law practices.
The proposals, outlined in a report on Thursday (Oct 16), aim to balance three priorities: maintaining an open and international legal market, ensuring equal collaboration between local and foreign firms, and preserving the independence of Singapore practices.
The committee, chaired by Attorney-General Lucien Wong, noted that the foreign law firms’ licensing system has grown increasingly complicated since foreign firms were allowed to collaborate with Singapore law practices in 1999.
The current patchwork of licence types – including Joint Law Ventures (JLVs), Formal Law Alliances (FLAs) and Qualifying Foreign Law Practices (QFLPs) – has created confusion for firms and regulatory burden that “potentially disincentivised collaborations that might otherwise benefit Singapore’s legal market”.
The review comes as Singapore’s legal services sector has expanded significantly. Legal services exports nearly tripled to S$1.74 billion in 2024 from S$640 million in 2013, while the number of Asian foreign law practices doubled between 2017 and 2023 – though the report did not state the absolute number.
MinLaw has launched an eight-week public consultation on the committee’s recommendations, ending Dec 10, 2025.
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Streamlining complex system
The committee’s recommendations centre on four areas: criteria for collaboration arrangements, foreign interests in Singapore law firms, lawyer composition in foreign entities and permitted practice areas for licensed foreign law practices.
Currently, foreign firms seeking to collaborate with local practices must navigate multiple frameworks – JLVs, FLAs and QFLPs – each with separate application processes, manpower requirements and compliance obligations.
The committee proposes replacing these with a single, flexible general licence for all partnerships between local and foreign firms, subject to meeting stipulated requirements.
To address concerns that some collaborations risk local firms “effectively merging with the foreign law practice and becoming its ‘Singapore office’”, the committee recommends new qualitative requirements.
Local firms seeking to collaborate must demonstrate they are “independent and substantive practices” – an ongoing requirement throughout the collaboration licence’s duration.
The director of legal services would assess this holistically, considering factors such as financial health, long-term viability and whether the foreign entity can influence management decisions.
Existing quantitative requirements would also be tightened. Local firms seeking collaboration must maintain at least five Singapore lawyers and have operated for at least three years.
They must also have three equity partners or equity-holding directors – up from two currently – who have held their positions for at least three years before applying.
Capping local lawyers in foreign firms
To preserve foreign firms’ focus on international work and prevent them from becoming overly reliant on Singapore lawyers, the committee recommended revising caps on local lawyer composition.
For QFLPs – which can practise Singapore law in commercial areas – the cap would be reduced from 80 to 50 per cent of total lawyers, with non-dual-qualified Singapore lawyers limited to 35 per cent.
The committee noted that during the Covid-19 pandemic, QFLPs faced challenges anchoring foreign lawyers in Singapore and increasingly tapped local lawyers. Between 2017 and 2024, Singapore lawyers in QFLPs increased by 50.3 per cent while foreign lawyers grew by only 9 per cent.
Currently, none of the nine QFLPs has reached the 80 per cent cap, with the average composition being 43.7 per cent Singapore lawyers.
For licensed foreign law practices – which can only practise Singapore law in international arbitration contexts – a new cap of one-third would apply to firms with five or more Singapore lawyers. These firms currently average 23.8 per cent Singapore lawyers.
The proposals also introduce a requirement for QFLPs to generate at least 65 per cent of revenue from offshore work, reinforcing their role in anchoring international legal work in Singapore.
The committee also recommends clarifying the scope of practice for licensed foreign law practices in international arbitration contexts.
It found that some firms have been practising Singapore law beyond the permitted scope by interpreting the term “relevant agreement” too broadly.
The committee suggests issuing guidelines or amending the definition of “relevant agreement” to prevent firms from using international arbitration work as a “backdoor” to practise Singapore law in areas they are not permitted to.
Licence renewal
The remaining recommendations include requiring the director of legal services’ approval for all concurrent appointments – where lawyers hold positions in both a local and foreign firm – regardless of whether the lawyer is Singapore or foreign-qualified.
The committee also flagged concerns about potential circumvention of “profit threshold requirements” – rules limiting how much profit local firms can distribute to foreign entities.
Some firms may be recording payments as “expenses” rather than profit distributions. It recommends issuing clearer guidance on what counts towards profit thresholds, noting that payment labels alone – whether salary, dividend, IT recharges or consultancy fees – should not be determinative, to prevent firms from effectively subsidising foreign partners.
In a separate statement, MinLaw said the nine QFLP firms’ licences will be renewed for two years until end-2027, during which they can submit substantive renewal applications taking into account any framework changes.
The QFLPs are Allen Overy Shearman Sterling, Clifford Chance, Gibson, Dunn & Crutcher, Latham & Watkins, Jones Day, Linklaters, Norton Rose Fulbright, Sidley Austin, and White & Case.
Between 2021 and 2024, these nine firms generated more than S$2 billion in revenue from offshore work and currently employ more than 550 lawyers in Singapore, of which over 40 per cent are Singapore-qualified.
The firms’ licences were last renewed at the end of 2020 for a five-year period. The outcome of the next formal licence renewal exercise will be announced in 2027.
“This will ensure continuity for the QFLPs’ operations in Singapore and provide certainty to their clients,” MinLaw said, noting that firms will need time to adapt to any licensing framework changes and the global transformation of the legal industry in recent years.
The committee was established in September 2023 to review the regulatory framework and recommend changes in the light of evolving legal industry trends and Singapore’s future needs.
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