R.

A 7042
FOREIGN INVESTMENT ACT
OF 1991

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 ABOUT
The amendments aim to promote and attract foreign
investments by allowing, for the first time, international
investors to set up and fully own domestic enterprises (including
micro and small enterprises) in the Philippines.
 March 2, 2022 former President Rodrigo
Duterte signed Republic Act No. 7042
It is also known as RA 11647

GOAL
The goal of this law is to encourage foreign
investors to provide employment opportunities,
develop resources, increase the value of exports,
and help fuel the overall economy.
Under the amendments, foreign nationals can own an
MSME with a minimum paid-in capital of US$100,000
provided that the enterprises meet the following
conditions:
Utilize advanced technology (to be determined by the
Department of Science and Technology);
Are endorsed as startup enablers or as a startup in
accordance with the Innovative Startup Act; or
The company hires no less than 15 Filipino employees, a
reduction from the previous requirement of 50.
FORM OF INVESTMENT
01 02
Capital Goods Patents
Task Name

03Task Name 04 Other technological

Formulae rights or processes
THE FOREIGN
INVESTMENTS
NEGATIVE LIST
(FINL)
 LIST A
List A consists of areas of investment reserved for Philippine nationals. The
Philippine Constitution restricts foreign ownership in some of these
investment areas to a maximum of 40%. Foreign ownership is prohibited in the
following areas:

Practice of
Licensed
professions Cooperatives

Mass Media, Private Secuirty Retail Trades

except recording Agencies

 LIST B
List B indicates limits in foreign ownership for reasons of security, defense,
risk to health and morals, and protection of small and medium-scale
enterprises.

60-40%
Required Capital for the Endeavor should not be less than USD
200,000
Can be Lowered to USD 100,00
 LIST C
Upon petition by a Philippine national engage therein, an area of
investment may be recommended by NEDA for inclusion in List C

The industry is controlled by firms owned at least sixty percent (60%)

by Filipinos;
Industry capacity is ample to meet domestic demand;
The leading firms of the industry substantially comply with
environmental standards
The prices of industry products are reasonable.