Under SIRA, certain entities deemed critical to Singapore’s national security may be designated by the government as a "Designated Entity." Once designated, these entities, along with their owners and potential investors or acquirers, become subject to notification or approval requirements, which are tied to reaching certain specified ownership or control thresholds in a designated entity. These requirements aim to ensure transparency, accountability and strategic oversight while mitigating risks associated with unfriendly influence in sensitive sectors.

An entity may be designated as a Designated Entity so long as the Minister considers the designation necessary in the interests of Singapore’s national security and:

    a) it was incorporated, formed or established in Singapore; 

    b) it carries out any activity in Singapore; or

    c) it provides goods or services to any person in Singapore.

SIRA covers both local and foreign investments in Designated Entities by individuals, corporations, and unincorporated bodies. Minister Gan Kim Yong, speaking in Parliament on January 9, 2024, emphasized that "national security" under SIRA encompasses critical areas for Singapore, including economic security, resilience, and the uninterrupted delivery of essential services. This broad definition allows Singapore to respond promptly to unforeseen circumstances as national security concerns evolve over time.

Before designating an entity as a Designated Entity, the Minister must notify the entity and allow at least 14 days for the entity to provide written representations. Once designated, the Minister must promptly notify the entity.

Designation subjects the entity, its owners and potential acquirers or investors to various notification and approval obligations. For example, prospective investors must:

• notify the Minister within seven days of becoming a 5 percent controller; and
• obtain Ministerial approval before reaching 12 percent, 25 percent, or 50 percent control, becoming an indirect controller, or acquiring part or all of the business of a designated entity as a going concern.

Existing investors must obtain Ministerial approval before dropping below 50 percent or 75 percent control.

Transactions lacking the requisite approval will be automatically rendered void, though the Minister may retrospectively validate them upon application by materially affected persons. Non-compliance with approval conditions could lead to measures such as an order to divest a stake in a Designated Entity.

Designated Entities are also subject to:

• ministerial approval for key officer appointments – unauthorized appointments may lead to removal in the interest of national security;
• ministerial approval for voluntary dissolution; and
• special administrative orders allowing Minister-appointed management if deemed necessary for Singapore’s or the entity’s security and reliability. This is likely to be used only in exceptional circumstances.

Speaking in January 2024, Minister Gan Kim Yong assured that entities under consideration for designation had been contacted, clarifying that entities not approached are not currently considered for designation.

Beyond designated entities, SIRA grants the Minister the authority to review any transaction involving entities deemed to have acted against Singapore’s national security interests (not merely pose potential threats to Singapore’s national security). This broad mandate allows for the proactive assessment of potential threats, irrespective of specific sectoral regulations. During the review of the transaction, the Minister may at any time issue directions to either the person or entity concerned, which can include, for example, directions to transfer or dispose of any equity interests in the entity or directions directing the entity to restrict disclosure of confidential information to any person.

In determining if an entity has acted against national security, a certificate issued by the Minister charged with the responsibility for internal security, stating that that Minister is satisfied that the entity mentioned in the certificate has acted against the national security interests of Singapore, is conclusive evidence.