Dec. 5 (Bloomberg) -- Clifford Chance, White & Case and Latham & Watkins won licenses to practice law in Singapore in areas including corporate finance and intellectual property as part of reforms intended to strengthen the city's finance sector.

Allen & Overy, Norton Rose and Herbert Smith were also awarded the new Qualified Foreign Law Practice license, Law Minister K. Shanmugam announced today. Previously, they could only advise on Singapore law through joint ventures.

The change will ``realize the potential of our legal services sector to develop into an engine of growth in its own right,'' he told a news conference. Shanmugam estimated the firms will double their revenue, staffing and profits in Singapore in five years.

The Southeast Asian city-state hopes allowing the firms to practice corporate law and employ locally qualified lawyers will support and strengthen its position as a financial center. Foreign law firms remain restricted from some areas, including appearing before Singapore courts.

``Singapore somewhat missed out on the gold rush of new international law firms into China and the Middle East in the last few years,'' said Jeremy Small, director of recruiter Law Alliance in Singapore. ``This puts it squarely back into the spotlight.''

Hong Kong's Growth

The number of registered foreign lawyers in Hong Kong almost doubled to 834 in 2006 from 480 in 1999, according to a Singapore government committee report. That compared with a 12 percent increase to 645 foreign lawyers in Singapore in 2007 from 576 in 2000.

Hong Kong has listed the initial public offerings of many of China's largest companies with share sales worth $87.3 billion from 2006 to Nov. 3, according to Bloomberg data. That compares with just $10.9 billion raised in Singapore in the same period.

London-based Freshfields Bruckhaus Deringer LLP pulled out of a joint venture and Singapore in 2007, illustrating that law firms treated the country as ``essentially satellites of their larger Hong Kong offices,'' the government report said.

Winners of today's licenses said they expect to see more work in Singapore in areas like asset management and regulatory advice.

India, Southeast Asia

``We intend to build our practices in energy, Islamic finance and arbitration,'' said Philip Rapp, Singapore managing partner of Clifford Chance. The London-based law firm, the world's largest by revenue, last month established a team of lawyers in Singapore focusing on capital market transactions in India.

New York-based White & Case is also using its Singapore office to service India, as well as Southeast Asia, according to executive partner Doug Peel.

White & Case will use its license to join with Singapore's Venture Law LLC, which it has worked with for the past six years on deals including Thai Beverage Pcl's S$1.37 billion ($901 million) share sale in Singapore, to offer clients a ``one stop- shop firm,'' Peel said.

Singapore has benefited from allowing foreign law firms to handle international arbitration in the city, with the number of foreign firms rising to 86 as of Nov. 11 from 72 in July 2007, according to the Attorney General's Chambers. There were 20 applications for the new licenses.

Competition

``By allowing practice in areas like arbitration the government encourages foreign lawyers to be advocates for Singapore,'' said Guy Spooner, a partner at London-based Norton Rose's office in the city. He cited competition law as another area that would benefit with the liberalization.

Mark Nelson, managing partner of Los Angeles-based Latham & Watkins' Singapore office said in a statement he was excited by the long-term growth opportunities in ``this dynamic region of the world.''

Wim Dejonghe, global managing partner of London-based Allen & Overy also praised Singapore in a statement as a sophisticated financial market positioned at the center of one of the fastest growing regions in the world.

Austin Sweeney, Singapore managing partner of London-based Herbert Smith said commodity and energy deals related to China and India would continue to be a growth area during the global recession.

Herbert Smith will also use its new license to offer clients fuller merger advice in Asia as acquisitions are more frequently involving Singapore law, he said.

Previous Ventures

Singapore began opening its legal sector in 2000, when it allowed foreign firms to set up joint ventures with local ones. Several tie-ups, including those involving New York-based Shearman & Sterling and San Francisco-based Orrick, Herrington & Sutcliffe, have ended.

London-based Linklaters, working with Allen & Gledhill, will continue with its joint venture, which has handled transactions like Singapore's largest convertible bond sale, raising S$1.3 billion for Southeast Asia's biggest developer by sales, CapitaLand Ltd., this year.

``While these new licenses will certainly enhance competition, our clients have told us they're very happy with our work and our relationship with Allen & Gledhill dates back beyond our joint venture to the 1980s,'' said Dean Lockhart, a Singapore-based partner of Linklaters.

Lucien Wong, managing partner of Allen & Gledhill, said the difficult economic outlook meant that the new licensees would need time to build up their Singapore capabilities.

``It won't be a big bang,'' he said.

To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net

Last Updated: December 5, 2008 04:32 EST