FAQ Foreign Ownership Investment

Frequently Asked Questions :

1. Foreign-owned Companies
2. Investments in the Philippines

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Q: Can a foreigner invest in the Philippines?
A: Yes, foreigners may invest in the Philippines in accordance with Republic Act (RA) No. 7042 or the Foreign Investments Act of 1991 and the Foreign Investment Negative List (FINL).

Q: What is the Foreign Investments Act of 1991?
A: As amended by RA No. 8179, it is an act that regulates the participation of foreigners in Philippine economic activities and prescribes the procedures for registering enterprises that plan to do business in the country.

Q: What is the Foreign Investment Negative List?
A: The FINL enumerates economic areas and activities where foreign equity or ownership is limited to a maximum of forty percent (40%). It has two sublists: List A, which, and List B, which. As per RA No. 7042, the list is amended at least every two years. President Rodrigo Duterte signed the 11th FINL last October 29, 2018.

Q: Can a foreigner own a corporation / business in the Philippines?
A: Yes, foreign ownership of corporations is allowed. Companies with more than forty percent (40%) foreign ownership catering to the Philippine local market are usually required to have a minimum paid-in capital of USD200,000.00.

Q: How can I incorporate my business in the Philippines?
A: Corporations are registered with the Philippine Securities and Exchange Commission (SEC).

Q: What permits do I need to start a business in the Philippines, after incorporation?
A: Local Business Permits, commonly known as “Mayor’s Permit”, which includes Zoning and Locational Clearance, Sanitary Permit, Fire Safety Inspection Certificate, Barangay Clearance, and depending on the nature of your business; FDA Licence to Operate, Importation License.

Q: What are the steps in registering a business in the Philippines?
A: File an application with the Securities and Exchange Commission, with the proposed Articles of Incorporation, By-laws, and Treasurer Affidavit.

Q: How long does it take to register a business in the Philippines?
A: Depending on whether the business needs a secondary license or not, it now takes around 2 months to register a business with the SEC, and another 4 weeks to obtain local business permits.

Q: What are the paid-up capital requirements in the Philippines?
A: The amount of paid-in capital for a corporation, and inward remittance for branch and representative offices is determined either by the Corporation Code of the Philippines, the Foreign Investment Negative List, DTI, BSP or SEC regulations.

Q: How much does business registration in the Philippines cost?
A: SEC fees depend on the amount of authorized capital at time of incorporation, after incorporation documentary stamp tax on issuance of original shares should be paid. Then local business permits must be obtained, cost is determined by the size, length and amount of rental.

Q: Can a foreigner open a bank account in the Philippines?
A: Yes, foreigners who are legal residents of the Philippines may open bank accounts in various currencies. Some banks will open accounts for tourists but only in a foreign currency.

Q: Can a foreigner own land in the Philippines?
A: Foreigners may not own land in the Philippines, but may own up to 40% of a corporation which owns land.

Q: Can a foreigner own a condominium in the Philippines?
A: Up to 40% of a condominium project may be foreign-owned.

Philippines Foreign Investment Law

Setting up a business in the Philippines requires the investor to know the investment laws.
There are many ways for foreign investors to setup a business in the Philippines.
100% foreign ownership of a branch office, corporation, RHQ, ROHQ or representative office is allowed depending on the kind of business they intend to operate in the Philippines.

If you have questions on starting or doing business in the Philippines contact our business consultants for a consultation.

Republic Act 7042 Foreign Investment Act of 1991

Republic Act 8179 Liberalize Foreign Investments, Amending for the purpose Republic Act No. 7042

Implementing Rules & regulations of the Foreign Investments Act of 1991 Republic Act No. 7042

The “Foreign Investment Act of 1991”, as amended, mandates the formulation of a Regular Foreign Investment Negative List, covering investment areas or activities which are open to foreign investors and/or reserved to Filipino nationals;

Eleventh Philippines Regular Foreign Investment Negative List

Tenth Philippines Regular Foreign Investment Negative List

Ninth Regular Foreign Investment Negative List E O 98

Republic Act No. 8762 – Retail Trade Liberalization Act of 2000

Implementing Rules and Regulations of Republic Act No. 8762

Laws pertaining to the leasing of land and purchase of real estate and condominiums by foreigners.

Republic Act No. 4726 The Condominium Act

Presidential Decree No. 471 fixing a maximum period for the duration of leases or private lands to aliens

Republic Act No. 7652 Investors’ Lease Act

Tax Incentives

BOI Board of Investments

PEZA Philippine Economic Zone Authority

Republic Act No. 8756 An Act Providing For The Terms, Conditions And Licensing Requirements Of Regional Or Area Headquarters, Regional Operating Headquarters, And Regional Warehouses Of Multinational Companies, Amending For The Purpose Certain Provisions Of Executive Order No. 226, Otherwise Known As The Omnibus Investments Code Of 1987

Philippines Economic Zones

The Special Economic Zone Act of 1995 – Republic Act No. 7916

The Corporation Code of the Philippines

Philippines Foreign Investment Law