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Republic of the Philippines
Congress of the Philippines
Metro Manila
Twelfth Congress
Third Regular
Session
REPUBLIC ACT NO.
9292
AN ACT TO PROMOTE
FOREIGN INVESTMENTS, PRESCRIBE THE PROCEDURES FOR REGISTERING
ENTERPRISES DOING BUSINESS IN THE PHILIPPINES, AND FOR OTHER
PURPOSES
Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:
SECTION 1.
Title. - This Act shall be known as the “Foreign
Investments Act of 1991”.
SECTION 2.
Declaration of Policy. - It is the policy of the State
to attract, promote and welcome productive investments from foreign
individuals, partnerships, corporations, and governments, including
their political subdivisions, in activities which significantly
contribute to national industrialization and socio-economic
development to the extent that foreign investment is allowed in such
activity by the
Constitution and relevant laws. Foreign investments shall be
encouraged in enterprises that significantly expand livelihood and
employment opportunities for Filipinos; enhance economic value of
farm products; promote the welfare of Filipino consumers; expand the
scope, quality and volume of exports and their access to foreign
markets; and/or transfer relevant technologies in agriculture,
industry and support services.
Foreign investments shall be welcome as a supplement to Filipino
capital and technology in those enterprises serving mainly the
domestic market.
As a general rule, there are no restrictions on extent of foreign
ownership of export enterprises. In domestic market enterprises,
foreigners can invest as much as one hundred percent (100%) equity
except in areas included in the negative list. Foreign owned firms
catering mainly to the domestic market shall be encouraged to
undertake measures that will gradually increase Filipino
participation in their businesses by taking in Filipino partners,
electing Filipinos to the board of directors, implementing transfer
of technology to Filipinos, generating more employment for the
economy and enhancing skills of Filipino workers.
SECTION 3.
Definitions. - As used in this Act:
a) the term “Philippine National” shall mean a citizen of the
Philippines or a domestic partnership or association wholly owned by
citizens of the Philippines; or a corporation organized under the
laws of the Philippines of which at least sixty percent (60%) of the
capital stock outstanding and entitled to vote is owned and held by
citizens of the Philippines or a corporation organized abroad and
registered as doing business in the Philippine under the Corporation
Code of which one hundred percent (100%) of the capital stock
outstanding and entitled to vote is wholly owned by
Filipinos or a trustee of funds for pension or other employee
retirement or separation benefits, where the trustee is a Philippine
national and at least sixty percent (60%) of the fund will accrue to
the benefit of Philippine nationals: Provided, That where a
corporation and its non-Filipino stockholders own stocks in a
Securities and Exchange Commission (SEC) registered enterprise, at
least sixty percent (60%) of the capital stock outstanding and
entitled to vote of each of both corporations must be owned and held
by citizens of the Philippines and at least sixty percent (60%) of
the members of the Board of Directors of each of both corporations
must be citizens of the Philippines, in order that the corporation
shall be considered a Philippine national; (as amended by R.A.
8179).
b) the term “investment” shall mean equity participation in any
enterprise organized or existing under the laws of the Philippines;
c) the term “foreign investment” shall mean an equity investment
made by a non- Philippine national in the form of foreign exchange
and/or other assets actually transferred to the Philippines and duly
registered with the Central Bank which shall assess and appraise the
value of such assets other than foreign exchange;
d) the phrase “doing business” shall include soliciting orders,
service contracts, opening offices, whether called “liaison” offices
or branches; appointing representatives or distributors domiciled in
the Philippines or who in any calendar year stay in the country for
a period or periods totaling one hundred eighty (180) days or more;
participating in the management, supervision or control of any
domestic business, firm, entity or corporation in the Philippines;
and any other act or acts that imply a continuity of commercial
dealings or arrangements, and contemplate to that extent the
performance of acts or works, or the exercise of some of the
functions normally incident to, and in progressive prosecution of,
commercial gain or of the purpose and object of the business
organization: Provided, however, That the phrase “doing
business” shall not be deemed to include mere investment as a
shareholder by a foreign entity in domestic corporations duly
registered to do business, and/or the exercise of rights as such
investor; nor having a nominee director or officer to represent its
interests in such corporation; nor appointing a representative or
distributor domiciled in the Philippines which transacts business in
its own name and for its own account;
e) the term “export enterprise” shall mean an enterprise wherein a
manufacturer, processor or service (including tourism) enterprise
exports sixty percent (60%) or more of its output, or wherein a
trader purchases products domestically and exports sixty percent
(60%) or more of such purchases;
f) the term “domestic market enterprise” shall mean an enterprise
which produces goods for sale, or renders services to the domestic
market entirely or if exporting a portion of its output fails to
consistently export at least sixty percent (60%) thereof;
and
g) the term “Foreign Investments Negative List” or “Negative List”
shall mean a list of areas of economic activity whose foreign
ownership is limited to a maximum of forty percent (40%) of the
equity capital of the enterprises engaged therein.
SECTION 4.
Scope. - This Act shall not apply to banking and other
financial institutions which are governed and regulated by the
General Banking Act and other laws under the supervision of
the Central Bank.
SECTION 5.
Registration of Investments of Non-Philippine
Nationals. - Without need of prior approval, a
non-Philippine national, as that term is defined in Section 3 a),
and not otherwise
disqualified by law may, upon registration with the Securities and
Exchange Commission (SEC), or with the Bureau of Trade Regulation
and Consumer Protection (BTRCP) of the Department of Trade and
Industry in the case of single proprietorships, do business as
defined in Section 3 d) of this Act or invest in a domestic
enterprise up to one hundred percent (100%) of its capital, unless
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 BTRCP, as the case may
be, shall not impose any limitations on the extent of foreign
ownership in an enterprise additional to those provided in this Act:
Provided, however, That any enterprise seeking to avail of
incentives under the Omnibus Investment
Code of 1987 must apply for registration with the Board of
Investments (BOI), which shall process such application for
registration in accordance with the criteria for evaluation
prescribed in said Code: Provided, finally, That a non-Philippine
national intending to engage in the same line of business as an
existing joint venture, 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 shall effect registration of any
enterprise applying under this Act within fifteen (15) days upon
submission of completed requirements.
SECTION 6.
Foreign Investment 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 shall 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 BTRCP, as the case may be, of any export enterprise that fails to
meet the export ratio requirement. The SEC or BTRCP 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 such SEC or BTRCP order, without
justifiable reason, shall subject the enterprise to cancellation of
SEC or BTRCP registration, and/or the penalties provided in Section
14 hereof.
SECTION 7.
Foreign Investment in Domestic Market Enterprises. -
Non-Philippine nationals may own up to one hundred percent (100%) of
domestic market enterprises unless foreign ownership therein is
prohibited or limited by the Constitution existing law or the
Foreign Investment Negative List under Section 8 hereof. (As amended
by R.A. 8179)
SECTION 8.
List of Investment Areas Reserved to Philippine Nationals (Foreign
Investment Negative List). - The Foreign Investment Negative
List shall have two (2) components lists; A, and B.
a) List A shall enumerate the areas of activities reserved to
Philippine nationals by mandate of the Constitution and specific
laws.
b) List B shall contain the areas of activities and enterprises
regulated pursuant to law:
CONTINUE
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