Registration of Investments

Section 6

Registration of Investments of Non-Philippine Nationals

Without need of prior approval, a non-Philippine national, as defined in Section 3a, and not disqualified by law may, upon registration with the SEC (or DTI in the case of single proprietorship), do business as defined in Section 3d of this Act or invest in a domestic enterprise up to 100% of its capital, unless a participation of non-Philippine nationals in the enterprise is prohibited or limited to a smaller percentage by existing law and/or under the provisions of this Act.

The SEC or DTI shall not impose any limitations on the extent of foreign ownership in an enterprise additional to those provided in this Act, as long as:

• any enterprise seeking to avail of incentives under the Omnibus Investment Code of 1987 must apply for registration with the BOI, which shall process such application for registration in accordance with the criteria for evaluation prescribed in said Code
• a non-Philippine national intending to engage in the same line of business as an existing jointventure, in which he or his majority shareholder is a substantial partner, must disclose the fact and the names and addresses of the partners in the existing joint venture in his application for registration with SEC.

During the transitory period as provided in Section 15 hereof, SEC shall disallow registration of the applying non-Philippine national if the existing joint venture enterprise, particularly the Filipino partners therein, can reasonably prove they are capable to make the investment needed for the domestic market activities to be undertaken by the competing applicant.

Upon effectivity of this Act, SEC shalleffect registration of any enterprise applying under this Act within fifteen (15) days upon submission of completed requirements.

Foreign Jnuesfments in Export Enterprises. - foreign investment in export enterprises whose products and services do not fall within Lists A and B of the Foreign Investment Negative List provided under Section 8 hereof is allowed up to one hundred percent(100%) ownership.

Export enterprises which are non-Philippine nationals ahall register with BOI and submit the reports that may be required to ensure continuing compliance of the export enterprise with its export requirement. BOI shall advise SEC or DTI, as the case may be, of any export enterprise that faile to meet the export ratio requirement.

The SEC or DTI shall thereupon order the non-complying export enterprise to reduce its sales to the domestic market to not more than forty percent (40%) of its total production; failure to comply with auch SEC or DTI order, without justifiable reason, shall subject the enterprise to cancellation of SEC or DTI registration, and/or the penalties provided in Section 14 hereof.

Export enterprises shall register and comply with the export requirements in accordance with Title 13 of the National InternalRevenue Code (NIRC), as amended, for purposes ofavailing any tax incentive or benefit.”

Lst of Investment Areas Reserved to Philippine Nationals (Foreign Investment Negative)

• Defense-related activities

This requires prior clearance and authorization from Department of National Defense (DND) to engage in such activity, such as the manufacture, repair, storage and/or distribution of firearms, ammunition, lethal weapons, military ordinance, explosives, pyrotechnics and similar materials, unlesa such manufacturing or repair activity is specifically authorized by the Secretary of National Defense; or

“Except as otherwise provided under Republic Act No. 8762, otherwise known as the Retail Trade Liberalization Act of 2000 and other relevant laws, micro and small domestic market enterprises with paid-in equity capital less than the equivalent of Two hummed thousand US dollars (US$200,000.00), are reserved to Philippine nationals:

Provided, That if:

1. They involve advanced technology as determined by the Ttepartment of Science and Technology, or
2. they are endorsed as startup or startup enablers by the lead host agencies pursuant to RA 11337 (Innovative Startup Act)
3. A majority of their direct employees are Filipinos, but in no case shall the number of Filipino employees be less than 15, then a minimum paid-in capital of One hundred thousand US dollars S$100,000.00) shall be allowed to non-Philippine nationals: f’rouided, further, That registered foreign enterprises employing foreign nationals and enjoying fiscal incentives shall implement an understudy or skills development program to ensure the transfer of technology or skills to Fi1ipinos.

Compliance with this requirement shall be regularly monitored by the DOLE.

“Nothing in this Act shall operate as a cause for termination of employees hired prior to the effectivity of this Act. In all cases, the provisions of Presidential Decree No. 442, otherwise known aa the

“Labor Code of the Philippines” and other applicable laws, rules and regulations issued by DOLE shall prevail.

“Amendments to Liat B may be made upon recommendation of the Secretary of National Defense, or the Secretary of Health, endorsed by the NEDA, or upon recommendation mole proprio, o( NEDA, approved by the President, and promulgated through the issuance of the Foreign Investment Negative List by Executive Order.

Amendments to the Foreign Investment Negative List shall not be made more often than once every 2 years as long as:

• NEDA, in cooperation with the BOI, DTI, SEC, DICT, IPAS and other pertinent government agencies, shall, every 2 years:
  1. review the Foreign Investment Negative List
  2. submit to Congress an analysis of foreign investment performance economic activities of the industries under the Foreign Investment Negative List and the reasons for the recommended amendments, if any
• NEDA shall recommend to Congress so investment-related matters requiring necessary legislation