SEC Reduced Requirements for Financing and Lending Companies

Securities and Exchange Commission
Philippines

COMPANY REGISTRATION AND MONITORING DEPARTMENT

N O T I C E

SEC Reduced Requirements for Financing and Lending Companies

Notice is hereby given that pursuant to SEC Resolution No. 544, series of 2016, the Commission En Banc has resolved to approve the Company Registration and Monitoring Department’s [CRMD] rationalization of documentary requirements for application for Certificate of Authority to Operate as a Financing Company / Lending Company.

The CRMD has modified the Application Form, Company’s Information Sheet and Personal Information Sheet to consolidate some of the documents. Further, the following are no longer required for registration of financing and lending companies: (1) local police clearance; (2) certificate of good moral character; (3) work permit from the Department of Labor and Employment for foreign directors and officers; and (4) location map and copy of the lease contract or title of the building / unit where the company is located.

Copies of the Checklist of Requirements and the revised Forms are available at the CRMD – Licensing Unit (LU) at the 3rd Floor, SEC Building, EDSA, Mandaluyong City and maybe downloaded at the SEC website. For inquiries, please call 584 – 7187 and look for the LU Officer of the day.

10th Regular Foreign Investment Negative List A & B

10th Regular Foreign Investment Negative List A & B

issued on the 29th day of May, 2015

LIST A: FOREIGN OWNERSHIP IS LIMITED BY MANDATE OF THE CONSTITUTION AND SPECIFIC LAWS

No Foreign Equity

1. Mass Media except recording (Art. XVI, Sec.11 of the Constitution; Presidential Memorandum dated 04 May 1994)

2. Practice of all professions *1 (Art. XII, Sec.14 of the Constitution, Sec. 1 of R.A. 5181, Sec. 7. J of R.A. 8981)

a. Pharmacy (R.A. 5921)
b. Radiologic and x-ray technology (R.A. 7431)
c. Criminology (R.A. 6560)
d. Forestry (R.A. 6239)
e. Law (Art. VIII, Section 5 of the Constitution; Rule 138, Sec. 2 of the Rules of the Court of the Philippines

3. Retail trade enterprises with paid-up capital of less than US$2,500,000 (Sec. 5 of R.A. 8762)*2

4. Cooperative (Ch. III, Art. 26 of R.A. 6938)

5. Private security agencies (SEC. 4 of R.A. 5487)

6. Small-scale mining (Sec. 3 of R.A. 5487)

7. Utilization of marine resources in archipelagic waters, territorial sea, and exclusive economic zone as well as small-scale utilization of natural resources in rivers, lakes, bays, and lagoons (Art. XII, Sec. 2 of the Constitution)

8. Ownership, operation and management of cockpits (Sec. 5 of P.D. 449)

9. Manufacture, repair, stockpiling and/or distribution of nuclear weapons (Art. II, Sec. 8 of the Constitution)*3

10. Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons and anti-personal mines (various treaties to which the Philippines is a signatory and conventions supported by the Philippines)*3

11. Manufacture of firecrackers and other pyrotechnic devices (Sec. 5 of R.A. 7183)

Up to Twenty Percent (20%) Foreign Equity

12. Private radio communications network (R.A. 3846)

Up to Twenty –Five Percent (25%) Foreign Equity

13. Private recruitment, whether for local or overseas employment (Art. 27 of P.D. 442)

14. Contracts for the construction and repair of locally –funded public works (Sec. 1 of Commonwealth Act No. 541, Letter of Instruction No. 630) except:

a. Infrastructure/development projects covered in R.A. 7718; and
b. Pr0jects which are foreign funded or assisted and required to undergo international competitive bidding (Sec. 2(a) of R.A. 7718)

15. Contracts for the construction of defense related structures (Sec. 1 of CA 541)

Up to Thirty Percent (30%) Foreign Equity

16. Advertising (Art. XVI, Sec. 11 of the Constitution)

Up to Forty Percent (40%) Foreign Equity *4

17. Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution) *5
18. Ownership of private lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of CA 141; Sec. 4 of R.A. 9182)
19. Operation of public utilities (Art. XII, Sec. 11 of the Constitution; Sec. 16 of CA 146)*6, 7
20. Educational institutions other than those established by religious groups and mission boards (Art. XIV, Sec. 4 of the Constitution)*8
21. Culture, production, milling, processing, trading excepting retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the by-products thereof (Sec. 5 of P.D. 194) *9
22. Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation (Sec. 1 of R.A. 5183)
23. Facility operator of an infrastructure or a development facility requiring a public utility franchise (Art. XII, sec. 11 for the Constitution; Sec. 2 (a) of R.A. 7718)
24. Operation of deep sea commercial fishing vessels (Sec. 27 of R.A. 8550)
25. Adjustment Companies (Sec. 332 of R.A. 10607 amending P.A. 612)
26. Ownership of condominium units (Sec. 5 of R.A. 4726)

LIST B: FOREIGN OWNERSHIP IS LIMITED FOR REASONS OF SECURITY, DEFENSE, RISK TO HEALTH AND MORALS AND PROTECTION OF SMALL AND MEDIUM-SCALE ENTERPRISES

Up to Forty Percent (40%) Foreign Equity

1.       Manufacture, repair, storage, and/or distribution of products and/or ingredients requiring Philippine National Police (PNP) clearance:

a. Firearms (handguns to shotguns), parts of firearms and ammunition therefore, instruments or implements used or intended to be used in the manufacture of firearms

b. Gunpowder

c.  Dynamite

d. Blasting Supplies

e. Ingredients used in making explosives

i. Chlorates of potassium and sodium

ii. Nitrates of ammonium, potassium, sodium barium, copper (11), lead (11), calcium and cuprite

iii. Nitric acid

iv. Nitrocellulose

v. Perchlorates of ammonium, potassium and sodium

vi. Dinitrocellulose

vii. Glycerol

viii.  Amorphous phosphorus

ix. Hydrogen peroxide

x. Strontium nitrate powder

xi. Toluene

f.        Telescopic sights, sniper scope and other similar devices
However, the manufacture or repair of these items may be authorized by the Chief of the PNP to non-Philippine nationals; Provided that a substantial percentage of output, as determined by the said agency, is exported. Provided further that the extent of foreign equity ownership allowed shall be specified in the said authority/clearance (R.A. 7042 as amended by R.A. 8179).

2.      Manufacture, repair, storage and/or distribution of products requiring Department of National Defense (DND) clearance:

a.      Guns and ammunition for warfare

b.      Military ordnance and parts thereof (e.g., torpedoes, depth charges, bombs, grenades, missiles)

c.       Gunnery, bombing and fire control systems and components

d.      Guided missiles/missile systems and components

e.      Tactical aircraft (fixed and rotary-winged0, parts and components thereof

f.        Space vehicles and component systems

g.      Combat vessels (air, land and naval) and auxiliaries

h.      Weapons repair and maintenance equipment

i.        Military communications equipment

j.        Night vision equipment

k.      Simulated coherent radiation devices, components and accessories

l.        Armament training devices

m.   Others as may be determined by the Secretary of the DND

However, the manufacture or repair of these items may be authorized by the Secretary of National Defense to non-Philippine national; Provided further that the extent of foreign equity ownership allowed shall be specified in the said authority/clearance (R.A. 7042 as amended by R.A. 8179).

3.      Manufacture and distribution of dangerous drugs (R.A. 7042 as amended by R.A. 8179)

4.      Sauna and steam bathhouses, massage clinics and other like activities regulated by law because of risks posed to public health and morals (R.A. 7042 as amended by R. A. 8179)

5.      All forms of gambling (R.A. 7042 as amended by R.A. 8179) except those covered by investment agreements with PAGCOR (P.D. 1869 as amended by R.A. 9487)

6.      Domestic market enterprises with paid-in equity capital of less than the equivalent of US$200,000 (R.A. 7042 as amended by R.A. 8179)

7.      Domestic market enterprises which involve advanced technology or employ at least fifty (50) direct employees with paid-in equity capital of less than the equivalent of US$100,000 (R.A. 7042 as amended by R.A. 8179)

*1 Foreigners are allowed to practice the following professions provided their country allows Filipinos to be admitted to the practice of these professions: aeronautical engineering, agricultural engineering, chemical engineering, civil engineering, electrical engineering, electronics engineering, electronics technician, geodetic engineering, mechanical engineering, metallurgical engineering, mining engineering naval architecture and marine engineering, sanitary engineering, medicine, medical technology, dentistry, midwifery, nursing, nutrition and dietetics, optometry, physical and occupational therapy, veterinary medicine, accountancy, architecture, chemistry, customs brokerage, environmental planning, geology, landscape architecture, librarianship, marine deck officers, marine engine officers, master plumbing, sugar technology, social work, teaching, agriculture, fisheries, guidance counseling, real estate service (real estate consultant, real estate appraiser, real estate assessor, real estate broker and real estate salesperson), respiratory therapy, psychology, real estate service ( real estate consultant, real estate appraiser, real estate assessor, real estate broker and real estate salesperson), sanitary engineering and interior design allow corporate practice by Filipinos.

*2 Full foreign participation is allowed for retail trade enterprises: (a) with paid-up capital of  US$2,500,000 or more provided that investments for establishing a store is not less than US$830,000; or (b) specializing in high end or luxury products, provided that the paid-up capital per store is not less than US$250,000 (Sec. 5 of R.A. 8762).

*3 Domestic Investments are also prohibited (Art. II, Sec. 8 of the Constitution; Conventions/Treaties to which the Philippines is a signatory).

*4 Lending companies regulated by SEC are allowed to have up to 49% foreign equity participation (Sec. 6 of R.A. 9474). Financing companies and investment houses regulated by SEC are allowed to have up to 60% foreign equity participation (Sec. 6 of R.A. 5980 as amended by R.A. 8556; P.D. 129 as amended by R.A. 8366).

*5 Full foreign participation is allowed through financial or technical assistance agreement with the President (Art. XII, Sec. 2 of the Constitution).

*6 The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association be citizens of the Philippines (Article XII, Section 11 of the Constitution).

*7 A “public utility” is a business or service engaged in regularly supplying the public with some commodity or service of consequence such as electricity, gas, water, transportation, telephone or telegraph service (Supreme Court ruling JG Summit Holdings vs. Court of Appeals, et al., September 24, 2003). Power generation and the supply of electricity to the contestable market are not considered as public utility operation (Sec. 6 and Sec. 29, respectively of R.A. 9136).

*8 Control and administration of educational institutions shall be vested in citizens of the Philippines (Art. XIV, Sec. 4(2) of the Constitution).

*9 Full foreign participation is allowed provided that within the 30-year period from start of operation, the foreign investor shall divest a minimum of 60 percent of their equity to Filipino citizens (Sec. 5 of P.D. 194; NFA Council Resolution No. 193 s. 1998).

Doing Business in the Philippines

Philippines Business Registration
Ayala Avenue Makati City Central Business District

Dayanan Business Consultancy assists individuals and foreign companies of all sizes in setting up their business operations in the Philippines. Doing business in the Philippines has many advantages as well as a large amount red tape.

Once we know your goals and the kind of business you want to launch in the Philippines,  DBC will recommend the best structure for your KPO, Call Center, IT or Web Development Outsourcing, Back Office Operation or Import and Export. DBC will advise you how to register your investment with PEZA or BOI to obtain tax incentives.

Get the Leading Business Process Outsourcing in the Philippines

We will also ensure that you will get the best Business Process Outsourcing in the Philippines. BPO is a cost-saving measure which is a method of subcontracting business-operations to a third party. One category of BPO is outsourcing of back office services, and Dayanan can help you starting from your business registration in the country.

DBC’s knowledge of the Philippine’s business environment and government agencies allows DBC’s clients to reach their objectives quickly. Personalized service is our commitment, whether your intention is to establish a:

Once the SEC has issued your License to Transact or Certificate of Incorporation, DBC will still be there to help get local business permits and licenses and register with other government agencies when necessary.

Other services DBC provides Business Development and Marketing, Business Plans, Visa Processing, Bookkeeping and Payroll.

Your Business Registration in the Philippines will be done quickly and professionally through Dayanan Business Consulting services.

Contact the DBC Team now for a free consultation.

Foreign Ownership of Rural Banks

Foreign Ownership of Rural Banks

President Aquino approved Republic Act No. 10574 on May 24, 2013. This Act which is a consolidation of House Bill No. 5360 and Senate Bill No. 3282 was finally passed by the House of Representatives and the Senate on February 4, 2013 and January 30, 2013, respectively.

Republic Act No. 10574 is an act allowing the infusion of foreign equity in the capital of rural banks, amending Republic Act No. 7353, otherwise known as “the rural bank act of 1992″, as amended, and for other purposes.

The highlights of this act are:

– That foreigners may own a maximum of sixty percent (60% ) of the voting stock of a rural bank.

– Non-Filipino citizens may become members of the Board of Directors of a rural bank but their participation in the Board shall be limited to their proportionate share in the equity of the rural bank: Provided, however, That at least one (1) independent director shall be elected to the Board of Directors.

– “Rural banks which are not qualified to acquire or hold land in the Philippines shall be allowed to bid and take part in foreclosure sales of real property mortgaged to them, as well as to avail of enforcement and other proceedings, and accordingly to take possession of the mortgaged property, for a period not exceeding five (5)-years from actual possession: Provided, That in no event shall title to the property be transferred to such rural bank. In case the rural bank is the winning bidder, it shall, during the said five (5)-year period, transfer its rights to a qualified Philippine national, without prejudice to a borrower’s rights under applicable laws. Should a rural bank be not able to transfer such property within the five (5)-year period, the rural bank shall be penalized one-half (1/2) of one percent (1%) per annum of the price at which the property was foreclosed until the rural bank is able to transfer the property to a qualified Philippine national.”

A rural bank in the Philippines must have forty percent (40%) or less foreign ownership to qualify to acquire or hold land in the Philippines.

(Article No. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of C.A. 141; Sec. 4 of R.A. 9182)

9th Regular Foreign Investment Negative List A

9th Regular Foreign Investment Negative List A

LIST A: FOREIGN OWNERSHIP IS LIMITED BY MANDATE OF THE CONSTITUTION AND SPECIFIC LAWS

No Foreign Equity

1. Mass Media except recording (Art. XVI, Sec.11 of the Constitution; Presidential Memorandum dated 04 May 1994)

2. Practice of all professions *1 (Art. XII, Sec.14 of the Constitution, Sec. 1 of R.A. 5181)

a) Engineering
i. Aeronautical engineering (P.D. 1570)
ii. Agricultural engineering (R.A. 8559)
iii. Chemical engineering (R.A. 9297)
iv. Civil engineering (R.A. 1582)
v. Electrical engineering (R.A. 7920)
vi. Electronics and Communication engineering (R.A. 9292)
vii. Geodetic engineering (R.A. 8560)
viii. Mechanical engineering (R.A. 8495)
ix. Metallurgical engineering (P.D. 1536)
x. Mining engineering (R.A. 4274)
xi. Naval Architecture and Marine engineering (R.A. 4565)
xii. Sanitary engineering (R.A. 1364)
b) Medicine and Allied Professions
i. Medicine (R.A. 2382 as amended by R.A. 4224)
ii. Medical Technology (R.A. 5527 as amended by R.A. 6318, P.D. 6138, P.D. 498 and P.D. 1534)
iii. Dentistry (R.A. 9484)
iv. Midwifery (R.A. 7392)
v. Nursing (R.A. 9173)
vi. Nutrition and Dietetics (P.D. 1286)
vii. Optometry (R.A. 8050)
viii. Pharmacy (R.A. 5921)
ix. Physical and Occupational Therapy (R.A. 5680)
x. Radiologic and X-ray Technology (R.A. 7431)
xi. Veterinary Medicine (R.A. 9268)
c) Accountancy (R.A. 9298)
d) Architecture (R.A. 9266)
e) Criminology (R.A. 6506)
f) Chemistry (R.A. 754)
g) Customs Brokerage (R.A. 9280)
h) Environmental Planning (P.D. 1308)
i) Forestry (R.A. 6239)
j) Geology (R.A. 4209)
k) Interior Design (R.A. 8534)
l) Landscape Architecture (R.A. 9053)
m) Law (Art. VIII, Sec. 5 of the Constitution; Rule 138, Sec. 2 of the Rules of Court of the Philippines)
n) Librarianship (R.A. 9246)
o) Marine Deck Officers (R.A. 8544)
p) Marine Engine Officers (R.A. 8544)
q) Master Plumbing (R.A. 1378)
r) Sugar Technology (R.A. 5197)
s) Social Work (R.A. 4373)
t) Teaching (R.A. 7836)
u) Agriculture (R.A. 8435)
v) Fisheries (R.A. 8550)
w) Guidance counseling (R.A. 9258)
x) Real estate service (R.A. 9646)
y) Respiratory therapy (R.A. 10024)
z) Psychology (R.A. 10029)

3. Retail trade enterprises with paid-up capital of less than US$2,500,000
(Sec. 5 of R.A. 8762) *2
4. Cooperatives (Ch. III, Art. 26 of R.A. 6938)
5. Private Security Agencies (Sec. 4 of R.A. 5487)
6. Small-scale Mining (Sec. 3 of R.A. 7076)
7. Utilization of Marine Resources in archipelagic waters, territorial sea, and exclusive economic zone as well as small scale utilization of natural resources in rivers, lakes, bays, and lagoons (Art. XII, Sec. 2 of the Constitution)
8. Ownership, operation and management of cockpits (Sec. 5 of P.D. 449)
9. Manufacture, repair, stockpiling and/or distribution of nuclear weapons (Art. II, Sec. 8 of the Constitution) *3
10. Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons and anti-personnel mines (Various treaties to which the Philippines is a signatory and conventions supported by the Philippines) *3
11. Manufacture of firecrackers and other pyrotechnic devices (Sec. 5 of R.A. 7183)

Up to Twenty Percent (20%) Foreign Equity

12. Private radio communications network (R.A. 3846)

Up to Twenty-Five Percent (25%) Foreign Equity

13. Private recruitment, whether for local or overseas employment (Art. 27 of P.D. 442)
14. Contracts for the construction and repair of locally-funded public works (Sec. 1 of CA 541, LOI 630) except:

a) Infrastructure/development projects covered in R.A. 7718; and
b) Projects which are foreign funded or assisted and required to undergo international competitive bidding (Sec. 2a of R.A. 7718)

15. Contracts for the construction of defense related structures (Sec. 1 of CA 541)

Up to Thirty Percent (30%) Foreign Equity

16. Advertising (Art. XVI, Sec. 11 of the Constitution)


Up to Forty Percent (40%) Foreign Equity

17. Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution) *4
18. Ownership of private lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of CA 141; Sec. 4 of RA 9182)
19. Operation and management of public utilities (Art. XII, Sec. 11 of the Constitution; Sec. 16 of CA 146)
20. Ownership/establishment and administration of educational institutions (Art. XIV, Sec. 4 of the Constitution)
21. Culture, production, milling, processing, trading excepting retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the by-products thereof (Sec. 5 of P.D. 194) *5
22. Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation (Sec. 1 of R.A. 5183)
23. Project Proponent and Facility Operator of a BOT project requiring a public utilities franchise (Art. XII, Sec. 11 of theConstitution; Sec. 2a of R.A. 7718)
24. Operation of deep sea commercial fishing vessels (Sec. 27 of R.A. 8550)
25. Adjustment Companies (Sec. 323 of PD 612 as amended by P.D. 1814)
26. Ownership of condominium units where the common areas in the condominium project are co-owned by the owners of the separate units or owned by a corporation (Sec. 5 of R.A. 4726)

Up to Forty-Nine Percent (49%) Foreign Equity

27. Lending Companies (SEC.6 of R.A. 9474) *6

Up to Sixty Percent (60%) Foreign Equity

28. Financing companies regulated by the Securities and Exchange Commission (SEC) (Sec. 6 of R.A. 5980 as amended by R.A. 8556) *6
29. Investment houses regulated by the SEC (Sec. 5 of P.D. 129 as amended by R.A. 8366) *6 (Sec. 6 of R.A. 5980 as amended by R.A. 8556) *6

*1 This is limited to Filipino citizens save in cases prescribed by law

*2 Full foreign participation is allowed for retail trade enterprises: (a) with paid-up capital of US$2,500,000 or more provided that investments for establishing a store is not less than US$830,000; or (b) specializing in high end or luxury products, provided that the paidup capital per store is not less than US$250,000 (Sec. 5 of R.A. 8762)

*3 Domestic investments are also prohibited (Art. II, Sec. 8 of the Constitution; Conventions/Treaties to which the Philippines is a signatory)

*4 Full foreign participation is allowed through financial or technical assistance agreement with the President (Art. XII, Sec. 2 of the Constitution)

*5 Full foreign participation is allowed provided that within the 30-year period from start of operation, the foreign investor shall divest a minimum of 60 percent of their equity to Filipino citizens (Sec. 5 of P.D. 194; NFA Council Resolution No. 193 s. 1998)

*6 No foreign national may be allowed to own stock in lending companies, financing companies or investment houses unless the country of which he is a national accords the same reciprocal rights to Filipinos (Sec. 6 of RA 9474; Sec. 6 of R.A. 5980 as amended by R.A. 8556; P.D. 129 as amended by R.A. 8366)

Philippines Foreign Investment Negative List B

How to Open a Company in the Philippines

There are many options to open a company in the Philippines. Some though can only be used for marketing and export inspection such as a representative office or for regional management RHQ.

We recommend either setting up and registering a branch office or a corporation rather than a partnership or a sole proprietorship. A corporation limits the liability of the shareholders and therefore offers more protection in case of litigation.

How to Open a Company in the Philippines
How to Open a Company in the Philippines

A branch office of a foreign corporation requires many documents from the home country which must be in English and authenticated by the Philippines Embassy in the country of origin. These documents must be submitted to the SEC with an application form for a license to transact business.

A sole proprietorship must be registered with the Department of Trade and Industry (DTI). It can only be foreign owned, if the business that it will operate is allowed to be 100% foreign owned as per the negative list A and B. Another requirement for foreign ownership is a minimum capitalization of USD200,000. The disadvantage is the full liability of its owner.

Reservation of Business Name

No matter what vehicle you will use to start your business in the Philippines the first step is the reservation of the business name with the SEC or DTI. Even though the SEC will issue a certificate of reservation for your chosen name you will still need to prepare an affidavit of undertaking to change name in the event that another entity has prior right to its use by registration with other government agencies.

Once the your desired name has been reserved the next step is to prepare the articles of incorporation or partnership and bylaws for domestic companies and for foreign owned companies you will need to obtain copies of all documents that show proof of existence in the host country as well as audited financial statements in English and authenticated by the Philippines embassy of the country of origin.

Paid-in Capital

Proof of paid-in capital or inward remittance is needed. A treasurer in trust account or a non-resident account must be opened in a bank located in the Philippines who will issue a bank certificate certifying the amount of funds which have been deposited.

With all the above you are now ready to submit your application for a business license with the Philippines SEC.

Though the corporation code of the Philippines allows a minimal capitalization of PHP5,000 we highly recommend that you start with a at least PHP100,000 or higher. A low paid-in capital will hinder your applications for bank loans or obtaining credit from potential suppliers. Certain kinds of businesses may require a higher paid-in capital than others.

Contact DBC now for a free consultation on how to open your company in the Philippines and all other Philippines business registration requirements.

Philippines Foreign Ownership of Resorts

There are a few legal options to owning and managing a resort in the Philippines.

Because of the restrictions on foreign ownership of land which is in Article XII of the
1987 Philippine Constitution, one solution is to lease/rent the land needed for the resort.

Foreign individuals and business entities may lease land for a period of 25 years
renewable for another 25 years. (P.D. No 471, Fixing a Maximum Period for the
Duration of Leases or Private Lands to Aliens). Tourism projects with a minimum
investment of USD five million may be able to qualify for a lease of 50 years renewable
for another 25 years (Republic Act No. 7652, otherwise know as the Investors’ Lease
Act).

To ensure the rights of the lessee it is good practice to have the lease annotated on the
land title.

For those who wish to own the land on which the resort will operate, a corporation which
is 60% Filipino owned and 40% Foreign may be incorporated to purchase the property.
This corporation may then lease the land to another 100% Foreign Owned Corporation
which may own the buildings and other infrastructure and manage the resort.

Foreigners married to Filipinos: this is controversial, as a foreigner may not own land
many think that buying property (land) in their spouse’s name is a solution; this is far
from being true. Any contract or side deal for control of the land will most probably be
considered a circumvention of the law. Even a long term lease contract may or may not
be held valid by the courts.

There is a Supreme Court decision pertaining to the rights of foreign spouses land
ownership and the equal partition of conjugal property.

http://sc.judiciary.gov.ph/jurisprudence/2006/august2006/G.R.%20No.%20149615.htm

In this case the Supreme Court declared that the foreign spouse had the property titled in
his Filipino spouse’s name knowing the Constitutional prohibition of foreign ownership
of land and can not claim reimbursement of the funds used to purchase neither the land
nor the house built on it.

Foreigners should not use nominees
to purchase land on their behalf or use nominee
shareholders and directors in a corporation that will own real property. Doing so, is
a circumvention of the laws that prohibits land from being 100% foreign owned and
would be a violation of the Anti Dummy Law.