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Foreign investments

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FOREIGN INVESTMENTS ACT (RA 7042)
- to attract foreign investments by non-PH nationals
PHILIPPINE NATIONALS
PH citizens
Domestic partnerships by PH citizens
Dom. corps. (60% owned by PH citizens)
Foreign corps. doing business in PH (100%
owned by PH citizens)
NATIONALITY REQUIREMENT IN CERTAIN INDUSTRY
RESERVED FOR PH NATIONALS
a) Mass Media 100%
b) Advertising 70%
c) Public Utility 60%
d) Educational Institution 60%
e) Exploration and development of natural
resources 60%
f) Ownership of land 60%
REQUIREMENT BEFORE ENGAGING IN BUSINESS
(by non-PH national)
Must register before appropriate govt agencies
For sole proprietor, register with DTI
For partnership/corporation, with SEC
TESTS FOR DETERMINING CORP. NATIONALITY
1) Incorporation Test
- whether domestic or foreign
- i.e: where registered
2) Control Test
- nationality of majority of shareholders
3) Grandfather Rule Test (a control test)
- true PH ownership is traced all the way to
individual SH of corp A owning shares in
another corp B by multiplying PH
ownership of A to corresponding
ownership of B
- applies to those which require
whole/partial PH ownership
EFFECT OF NON-COMPLIANCE WITH MINIMUM
FILIPINO OWNERSHIP
corp is considered de facto corp
automatic ground for dissolution
EFFECT OF ENGAGING IN BUSINESS BY FOREIGN
CORP. WITHOUT LICENSE
not permitted to intervene in any
action/suit/court proceeding
may be sued before PH courts

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FOREIGN INVESTMENTS ACT (RA 7042) - to attract foreign investments by non-PH nationals PHILIPPINE NATIONALS ✓ ✓ ✓ ✓ PH citizens Domestic partnerships by PH citizens Dom. corps. (60% owned by PH citizens) Foreign corps. doing business in PH (100% owned by PH citizens) NATIONALITY REQUIREMEN ...
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