FOREIGN INVESTMENTS f.
CHED
Investment – equity participation in any
enterprise organized under the law of the
Philippines and recorded in the enterprise stock
and transfer book or registry of ownership
Foreign Investments – equity investment made
by a non-Philippine national in the form of
foreign exchange or transfer of other assets.
Duly registered with BSP
Practice of Profession – activity rendered and
performed by registered and duly licensed
professional or holder of special temporary
permit
Pipeline transportation - sector which includes
transport of goods or materials through a
pipeline such as crude, refined petroleum,
natural gas, biofuels, other chemically stable
substance.
INTER-AGENCY INVESTMENT PROMOTION
COORDINATION COMMITTEE (IIPCC)
It is the body that will integrate the
promotion and facilitation efforts to encourage
foreign investments.
DTI is the lead agency.
It consists of:
1. Secretary of the DTI – chairperson
2. Secretary/undersecretary of the DOF –
Vice President
3. 1 representative from:
a. DTI-Board of Investment (BOI)
b. DTI-PEZA
c. DFA, Office of Undersecretary for
Multilateral Affairs and
International Economic Relations
(OUMAIER)
d. National Economic and
Development Authority (NEDA)
e. DICT
g. TESDA
4. 4 representatives consist of:
a. National capital region
b. Luzon
c. Visayas
d. Mindanao
POWERS AND FUNCTIONS
1. Establish both medium- and long-term
foreign investment promotion and
marketing plan (FIPMP)
2. Design a comprehensive marketing
strategy and campaign, promoting the
country as a desirable investment area
3. Encourage and support research and
development in priority areas indicated
in FIPMP
4. Monitor actual performance against
targets in FIPMP
5. Submit annual evaluation to the
President and Congress regarding the
activities in FIPMP
6. Establish and regularly update online
database
7. Support local government efforts to
promote foreign direct investments,
compliance and address safeguards.
DEVELOPMENT OF FIPMP
Shall be developed by IIPCC for the
medium 5 year and long term 10-year plan
Provided, it is based on competitive
advantages, natural resources, skill and
educational development, traditional linkages,
and international market potential and it is fully
consistent with the strategic investment’s
priorities plan.
Provided further, that online portal
containing the FIPMP shall be uploaded which
consist details such as procedure, contract,
schedules.
DEPED, CHED, TESDA, DOLE, PRC and
other training agencies involved in education
and skills development shall direct curriculum
and training efforts toward manpower
requirements of FIPMP.
REGISTRATION OF INVESTMENTS OF NON-
PHILIPPINE NATIONALS
General Rule: Without the need of prior
approval, non-Philippine national, upon
registration with SEC or DTI (Sole
Proprietorship), may do business up to 100%.
Exception: Unless participation of non-
Philippine nationals in the enterprise is
prohibited or limited to smaller percentage.
Provided, any enterprise seeking to avail
incentives under the Omnibus Investment Code
(1987) must apply for registration with BOI.
Provided, 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, names, and addresses of
the partners in the existing joint venture in his
application for registration with SEC.
SEC shall disallow registration of the
non-Philippine national if the existing joint
venture, particularly Filipino partners, can
reasonably prove that they are capable to make
the investment needed for the domestic market
activities
FOREIGN INVESTMENTS IN EXPORT ENTERPRISE
They are allowed up to 100% ownership,
if the products do not fall within List A and B of
the Foreign Investment Negative List.
Export enterprises which are non-
Philippine nationals shall register with BOI.
BOI shall advice SEC or DTI if export
enterprise fails to meet the export ratio
requirements.
SEC or DTI shall thereupon order the
non-complying export enterprise to reduce its
sales to not more than 40% of total production.
Failure to comply with such order
without justifiable reason, shall subject for
cancellation of registration.
They shall register and comply with the
export requirements in accordance with the NIR,
for purpose of availing any tax incentive or
benefit.
FOREIGN INVESTMENT NEGATIVE LIST
Amendment shall not be made more
often than once every 2 years.
Provided that NEDA, in consultation and
cooperation with BOI, DTI, SEC, DICT, IPAs and
other government agencies shall, every 2 years:
a. Review the list
b. Submit to Congress an analysis of foreign
investment performance economic
activities and reasons for recommended
amendments.
REVIEW OF STRATEGIC INDUSTRIES
Upon the order of the President, the
IIPCC in coordination with National Security
Council (NSC) and NEDA, shall review the foreign
investments involving military-related
industries, cyber infrastructure, pipeline
transportation or such which may threaten FOREIGN INVESTMENT
territorial integrity and the safety of the Filipino
DEFINITIONS
citizens, when:
Philippine National
a. Made by a foreign government-
controlled entity or state-owned a. Citizen of the Philippines,
enterprise except independent pension b. Domestic partnership or association
funds, sovereign wealth funds, and wholly owned by citizens of the
multi-national banks Philippines.
b. Located in geographical areas critical to c. Corporation organized under the laws of
national security the Philippines of which at least 60% of
the capital stock outstanding and
ANTI-GRAFT PRACTICES IN FOREIGN
entitled to vote are held by citizens.
INVESTMENT PROMOTIONS
d. Trustee of funds for pension and other
Public officials and employees involved employee retirement or separation
in foreign investment promotions shall uphold benefits.
the highest standards of public service, Where trustee is a Philippine national
accountability and integrity. and at least 60% of the fund will accrue
to the benefit of the Philippine Nationals
Committing acts under Anti-Graft and
Corrupt practices shall be punished by: Provided, where a corporation and non-
Filipino stockholders own stocks in SEC
a. 2M to 5M
registered entities, the ff. shall be followed to be
b. In addition to penalties under the Sec 9
considered a Philippine National
of the said act
a. At least 60% of the capital stock and
NON-APPLICABILITY
entitled to vote must be owned by
This act shall not apply to banking and citizens
other financial institution governed and b. At least 60% of the member of the BOD
regulated by General Banking Law 2000 and of both corporations must be citizens
other laws under supervision of BSP.
Doing Business
It shall not apply to the practices of
Include:
profession that are covered by specific laws and
fall under the jurisdiction of various Professional a. soliciting orders,
Regulatory Board (PRBs) b. service contracts,
c. opening offices whether called liaison
offices or branches,
APPROPRIATIONS d. appointing representatives or
distributors:
50M from contingent fund of General d.1. domiciled in the Philippines or
Appropriations act shall be appropriated and d.2. stayed in the Philippines for a
released to IIPCC calendar year totaling 180 days or more
e. Participation in the management,
supervision or control
 Provided, the phrase doing business shall
not be include mere investment as a shareholder
by a foreign entity in domestic corporations.
Export 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
Foreign Investment Negative List – list of areas
of economic activity whose foreign ownership is
limited to maximum 40$ ownership of the equity
capital
NEGATIVE LIST
List A
Enumerate areas of activities reserved
to Philippine nationals
List B
Areas of activities and enterprises
pursuant to law:
a. Defense related activities, requiring
prior clearance and authorization from
Department of National Defense (DND)
to engage in such activity.
Unless such activity is specifically
authorized with a substantial export
component to non-Philippine national
b. Which have implications on public
health and morals.
Small and medium enterprises with paid-in
equity capital < or equal of $500,000 are
reserved to Philippine nationals unless they
involved advanced technology.
List C
Contain the areas of investment in which existing
enterprises already serve adequately the needs
of the economy and the consumer and do not
require further foreign investments
REQUIREMENTS TO BE INCLUDED IN LIST C
1. Controlled by at least 60% Filipinos
2. Industry capacity is ample to meet
domestic demand
3. Sufficient competition exists within the
industry
4. Industry products comply with
Philippine standards
5. Quantitative restrictions are not applied
on imports of directly competing
products
6. Leading firms of the industry complies
with environmental standards
7. Prices of products are reasonable
COMPLIANCE WITH ENVIRONMENTAL
STANDARDS
All industrial enterprise regardless of
nationality of ownership
CONSISTENT GOVERNMENT ACTION
No agency, instrumentality or political
subdivision of the Government shall take any
action on conflict or which will nullify the
provision of this Act
ADMINISTRATIVE SANCTIONS
Any person who violates this act – not
exceeding 100K
Offense made by juridical entity – not
exceeding ½ of 1% of total paid-in capital but not
more than 5M.
President and official responsible
therefor shall be fine not exceeding 300K
In addition, any person, firm, juridical
entity involved shall be subject to forfeiture of all
benefits granted by this act.