Itís Your Money > Starting and Running a Business

With the 40% foreign ownership rules is the a legal way to secure your invest

(1/2) > >>

deauzieguy:
With the 40% foreign ownership rules is the a legal way to secure your investment from your local partners from ripping you off I posted a similar post on livinginthephilippines3 forum and everyone said to forget it everyone they knew lost the shirt, Don did u say you new the President can we lobby her to change the laws as it\'s anti-investment .
The country could really benifit from foreign investment.

Paul

:

--- Quote from: deauzieguy on February 12, 2008, 07:00:28 AM ---With the 40% foreign ownership rules is the a legal way to secure your investment from your local partners from ripping you off I posted a similar post on livinginthephilippines3 forum and everyone said to forget it everyone they knew lost the shirt, Don did u say you new the President can we lobby her to change the laws as it\'s anti-investment .
The country could really benifit from foreign investment.

Paul

--- End quote ---

Sorry to tell you, but the answers you received on LIP3 are still valid here.† You may enter in contract with your Filipino partners to try to protect your interest, but you are at a very distinct disadvantage if they loose your investment and you wish to take measures to recoup it.† Since you can\'t enter in contract with your wife as a partner in business, often the wife of an expat is the sole owner.† In this case the security of your investment is totally dependent upon your relationship.† This holds true also when you enter into a legal partnership with Filipinos.† Good luck!

:
I read SOMEWHERE, (forgot where GRRRR),† that a foreigner in a 40% ownership corp. in the Philippines can control the bank account of the corp. ie only name on the account.

Something to check out in getting your ducks in a row.

If anyone finds things different, (with a link), be sure to come back to this post and correct!
B-Ray

Gray Wolf:

--- Quote from: B-Ray on April 27, 2008, 10:17:53 AM ---I read SOMEWHERE, (forgot where GRRRR),† that a foreigner in a 40% ownership corp. in the Philippines can control the bank account of the corp. ie only name on the account.

Something to check out in getting your ducks in a row.

If anyone finds things different, (with a link), be sure to come back to this post and correct!
B-Ray

--- End quote ---


B-Ray,

As with everything connected to doing business in the Philippines, even this isn\'t etched in stone.  Seems there are slightly different rules for different business enterprises.  Rules for conducting say a bank for instance are quite different from those of a mining operation or agricultural enterprise.  I know we\'re not talking about starting a bank or beginning a mining operation or agricultural enterprise, but my point is that there is no cut and dried rule to fit all business situations, apparently.

Check out this link to the RP DOJ ...

http://www.doj.gov.ph/faqs_anti-dummy.html 

I read this entire page as well as at least 10 others and never found a direct answer to any of the questions we have on the table.  I did see several references that made me question whether you could actually control the bank account.  I\'m beginning to think that as a foreigner you can\'t. 

\"Section 2-A. Any person, corporation, or association which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines or of any other specific country, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, x x x in any manner permits or allows any person, not possessing the qualifications required by the Constitution, or existing laws to acquire, use, exploit or enjoy a right, franchise, privilege, property or business, the exercise and enjoyment of which are expressly reserved by the Constitution or existing laws to citizens of the Philippines or of any other specific country, to intervene in the management, operation, administration or control thereof, whether as an officer, employee or laborer therein with or without remuneration except technical personnel whose employment may be specifically authorized by the Secretary of Justice, and any person who knowingly aids, assists, or abets in the planning, consummation or perpetration of any of the acts herein above enumerated shall be punished by imprisonment for not less than five nor more than fifteen years and by a fine of not less than the value of the right, franchise, or privilege enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand pesos; Provided, however, That the president, managers or persons in charge of corporations, associations or partnerships violating the provisions of this section shall be criminally liable in lieu thereof: Provided, further, That any person, corporation or association shall, in addition to the penalty imposed herein, forfeit such right, franchise, privilege and the property or business enjoyed or acquired in violation of the provisions of this Act: and Provided, finally, That the election of aliens as members of the board of directors or governing body of corporations or associations engaging in partially nationalized activities shall be allowed in proportion to their allowable participation or share in the capital such entities.\"


In the words of the Supreme Court:

\"When the law says that you cannot employ an alien in any position pertaining to management, operation, administration and control, \'whether as an officer, employee, or laborer therein\', it only means one thing: the employment of a person who is not a Filipino citizen even in a minor or clerical or non-control position is prohibited. The reason is obvious: to plug any loophole or close any avenue that an unscrupulous alien may resort to flout the law or defeat its purpose, for no one can deny that while one may be employed in a non-control position who apparently is harmless he may later turn out to be a mere tool to further the evil designs of the employer. It is imperative that the law be interpreted in a manner that would stave off any attempt at circumvention of this legislative purpose.\" (King v. Hernaez, supra.)

Seems whether we like it or not, if we want to start and operate a business in the RP we\'ll have to find an attorney who can clearly decipher this mess and put it into simple terms as it applies to the specific business ideas we have in mind.  Each type of business will have slightly different rules, it appears, although much of what we\'ve been discussing here is pretty simple, not banking or mining for precious minerals or operating a coconut plantation, for instance. 

Here\'s a link to the page in this forum where other RP gov links are found:

http://livinginthephilippines.com/forum/index.php?topic=90.0 

Wish it was easier, but as with all things worthwhile, we\'ll have to continue digging to find an answer for our questions.

Jack

:
Being only a layman but when you open a account they ask \"do you want a OR or a AND account\". Could you exert some control with a AND account?

Navigation

[0] Message Index

[#] Next page

Go to full version