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Alan S

What type of business can you run?

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Alan S

The main limitation is the Foreign Ownership Negative List, the 7th edition of which was enacted in 2006, under EO 584.

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Alan S

PREAMBLE:

 

WHEREAS, Republic Act (RA) No. 7042,otherwise known as the Foreign Investments

Act of 1991, as amended by RA 8179, provides for the formulation of a Regular Foreign

Investment Negative List covering investment areas/activities which may be opened to

foreign investors and/or reserved to Filipino nationals;

WHEREAS, the Regular Foreign Investment Negative List, consisting of Lists A and B, is

effective for two (2) years pursuant to Section 8 of RA 7042 (as amended) and its revised

Implementing Rules and Regulations;

WHEREAS, there is a need to formulate a Seventh Regular Foreign Investment Negative

List in view of the expiration of the existing list on January 6, 2007.

 

NOW, THEREFORE, I, GLORIA MACAPAGAL ARROYO, President of the

Republic of the Philippines, by virtue of the powers vested in me by Law, do hereby order:

SECTION 1. Only the investment areas and/or activities listed in Annex A hereof shall be

reserved to Philippine nationals, and hereafter shall be referred to as the Seventh Regular Foreign Investment Negative List.

The extent of foreign equity in these areas shall be limited to the percentages indicated in the List.

 

SECTION 2. Any amendment to List A may be made at any time to reflect changes instituted

in specific laws while amendments to List B shall not be made more often than once every

two years, pursuant to Section 8 of RA 7042(as amended) and its revised Implementing

Rules and Regulations.

SECTION 3. All orders, issuances, rules and regulations or parts thereof, which are

inconsistent with this Order are hereby revoked or modified accordingly.

SECTION 4. This Executive Order shall take effect upon the expiration of the Sixth Foreign Investment negative List on January 6, 2007 following its publication in a national newspaper of general circulation.

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Alan S

ANNEX A <NO FOREIGN OWNERSHIP>

 

LIST A: FOREIGN OWNERSHIP IS LIMITED BY

MANDATE OF THE CONSTITUTION AND

SPECIFIC LAWS

No Foreign Equity

1. Mass Media except recording (Art. XVI, Sec. 11 of the Constitution; Presidential

Memorandum dated 04 May 1994)

 

2. Practice of all professions

(Note:1 This is limited to Filipino citizens save in cases prescribed by law)

 

a) Engineering

i. Aeronautical

ii. Agricultural

iii. Chemical

iv. Civil

v. Electrical

vi. Electronics and

Communication

vii. Geodetic

viii. Mechanical

ix. Metallurgical

x. Mining

xi. Naval Architecture and

Marine

xii. Sanitary

b) Medicine and Allied Professions

Medicine and Allied Professions

i. Medicine

ii. Medical Technology

iii. Dentistry

iv. Midwifery

v. Nursing

vi. Nutrition and Dietetics

vii. Optometry

viii. Pharmacy

ix. Physical and Occupational

Therapy

x. Radiologic and X-ray

Technology

xi. Veterinary Medicine

c) Accountancy

d) Architecture

e) Criminology

f) Chemistry

g) Customs Brokerage

h) Environmental Planning

i) Forestry

j) Geology

k) Interior Design

l) Landscape Architecture

m) Law

n) Librarianship

o) Marine Deck Officers

p) Marine Engine Officers

q) Master Plumbing

r) Sugar Technology

s) Social Work

t) Teaching

u) Agriculture

v) Fisheries

 

 

(Art. XII, Sec. 14 of the Constitution; Sec. 1 of RA

5181)

3. Retail trade enterprises with paid-up capital

of less than US$2,500,000(Sec. 5 of RA 8762)

 

4. Cooperatives (Ch. III, Art. 26 of RA 6938)

 

5. Private Security Agencies (Sec. 4 of RA5487)

6. Small-scale Mining (Sec. 3 of RA 7076)

7. Utilization of Marine Resources in archipelagic waters, territorial sea, and exclusive economic zone as well as small scale utilization of natural resources in

rivers, lakes, bays, and lagoons (Art. XII,Sec. 2 of the Constitution)

 

8. Ownership, operation and management of cockpits (Sec. 5 of PD 449)

 

9. Manufacture, repair, stockpiling and/or distribution of nuclear weapons (Art. II, Sec. 8 of the Constitution)

 

10. Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons and anti-personnel mines (Various treaties to which the

Philippines is a signatory and conventions supported by the Philippines)

 

11. Manufacture of firecrackers and other pyrotechnic devices (Sec. 5 of RA 7183)

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Bob Ward

Peza or Non Peza is the next question!

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Alan S

20%.

 

Up to Twenty Percent (20%) Foreign Equity

 

12. Private radio communications network (RA

3846)

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Alan S

25%

 

Up to Twenty-Five Percent (25%) Foreign Equity

 

13. Private recruitment, whether for local or overseas employment (Art. 27 of PD 442)

 

14. Contracts for the construction and repair of locally-funded public works (Sec. 1 of CA 541, LOI 630) except:

 

a) infrastructure/development projects covered in RA 7718; and

b) projects which are foreign funded or assisted and required to undergo

international competitive bidding (Sec. 2a of RA 7718)

 

15. Contracts for the construction of defense related structures (Sec. 1 of CA 541)

 

30%

 

Up to Thirty Percent (30%) Foreign Equity

 

16. Advertising (Art. XVI, Sec. 11 of the Constitution)

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Alan S

40%

 

Up to Forty Percent (40%) Foreign Equity

 

17. Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution)

 

18. Ownership of private lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of CA 141; Sec. 4 of RA 9182)

 

19. Operation and management of public utilities (Art. XII, Sec. 11 of the

Constitution; Sec. 16 of CA 146)

 

20. Ownership/establishment and administration of educational institutions

(Art. XIV, Sec. 4 of the Constitution)

 

21. Culture, production, milling, processing, trading excepting retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the byproducts

thereof (Sec. 5 of PD 194;Sec. 15 of RA 8762)

 

22. Contracts for the supply of materials, goods and commodities to governmentowned

or controlled corporation, company, agency or municipal corporation (Sec. 1 of RA 5183)

 

23. Project Proponent and Facility Operator of a BOT project requiring a public utilities

franchise (Art. XII, Sec. 11 of the Constitution; Sec. 2a of RA 7718)

 

24. Operation of deep sea commercial fishing vessels (Sec. 27 of RA 8550)

 

25. Adjustment Companies (Sec. 323 of PD 612 as amended by PD 1814)

 

26. Ownership of condominium units where the common areas in the condominium

project are co-owned by the owners of the separate units or owned by a corporation

(Sec. 5 of RA 4726)

 

60%

 

Up to Sixty Percent (60%) Foreign Equity

 

27. Financing companies regulated by the Securities and Exchange

Commission (Sec. 6 of RA 5980 as amended by RA 8556)6

 

28. Investment houses regulated by the SEC (Sec. 5 of PD 129 as amended by RA

8366)

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Alan S

LIST B: FOREIGN OWNERSHIP IS LIMITED FOR REASONS OF SECURITY, DEFENSE,

RISK TO HEALTH AND MORALS AND PROTECTION OF SMALL- AND MEDIUMSCALE ENTERPRISES

 

Up to Forty Percent (40 %) Foreign Equity

 

1. Manufacture, repair, storage, and/or distribution of products and/or ingredients

requiring Philippine National Police (PNP) clearance:

a) Firearms (handguns to shotguns), parts of firearms and ammunition

therefor, instruments or implements used or intended to be used in the

manufacture of firearms

b) Gunpowder

c) Dynamite

d) Blasting supplies

e) Ingredients used in making explosives:

i. Chlorates of potassium and sodium

ii. Nitrates of ammonium, potassium, sodium,

barium, copper (11), lead (11), calcium and

cuprite

iii. Nitric acid

iv. Nitrocellulose

v. Perchlorates of ammonium, potassium and sodium

vi. Dinitrocellulose

vii. Glycerol

viii. Amorphous phosphorus

ix. Hydrogen peroxide

x. Strontium nitrate powder

xi. Toluene

 

f) Telescopic sights, sniper scope and other similar devices

However, the manufacture or repair of these items may be authorized by the

Chief of the PNP to non-Philippine nationals; Provided that a substantial

percentage of output, as determined by the said agency, is exported. Provided further that the extent of foreign equity ownership allowed shall be specified in the said authority/clearance (R.A. 7042 as amended by R.A. 8179)

 

2. Manufacture, repair, storage and/or distribution of products requiring Department of National Defense (DND) clearance;

 

a. Guns and ammunition for warfare

b. Military ordnance and parts thereof (e.g., torpedoes, depth charges, bombs, grenades, missiles)

c. Gunnery, bombing and fire control systems and components

d. Guided missiles/missile systems and components

e. Tactical aircraft (fixed and rotary -winged), parts and components thereof

f. Space vehicles and component systems

g. Combat vessels (air. land and naval) and auxiliaries

h. Weapons repair and maintenance equipment

i. Military communications equipment

j. Night vision equipment

k. Stimulated coherent radiation devices, components and accessories

l. Armament training devices

m. Others as may be determined by the Secretary of the DND

 

3. Manufacture and distribution of dangerous drugs (R.A. 7042 as amended by R.A. 8179)

 

4. Sauna and steam bathhouses, massage clinics and other like activities regulated by law because of risks posed to public health and morals (R.A. 7042 as amended by R.A. 8179)

 

5. All forms of gambling, e.g. race track operation (R.A. 7042 as amended by R.A. 8179)

 

6. Domestic market enterprises with paid-in equity capital of less than the equivalent of US$200,000 (R.A. 7042 as amended by R.A. 8179)

 

7. Domestic market enterprises which involve advanced technology or employ at least fifty (50) direct employees with paid-in-equity capital of less than the equivalent of US$100,000 (R.A. 7042 as amended by R.A. 8179)

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angelescitypi

So, I guess I as a Board Certified and Licensed Clinical Social Worker could NOT establish a private practice in the phils upon my imminent retirement from U. S. federal service?

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Alan S

This clearly shows that there are many barriers to running a business that suppies the domestic market.

 

One area where foreign ownership is not just allowed, but encouraged, is exporting.

Either of locally made products, or manufacture/assembly and subsequent export.

 

In such cases, there are advantages to being on an official Export Zone, many of which are run by PEZA, the Philippine Export Zone Authority.

 

The first of these was started by Marcos, at Bataan, and run by EPZA (the forerunner of PEZA).

 

I will just add that, in my numerous dealings with them, I have always found them honest and easy to work with.

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Alan S

So, I guess I as a Board Certified and Licensed Clinical Social Worker could NOT establish a private practice in the phils upon my imminent retirement from U. S. federal service?

 

 

You are correct.

 

Now, there are occasional exceptions.

I know of an opthalmic surgeon who goes to the Philippines each year to perform operations and help train the Filipino surgeons.

He, however, gets a special permit to allow him to do so.

 

I would doubt that you, or most other people, would get such an exemption.

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digiteye

Ah... this all is quite horrible.

 

In this "business environment" all I can do is exporting mango and coconut... :)

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Alan S

That is why I said to read the list before making plans.

It IS restrictive.

 

(WHat I find slightly ironic is that one clause states that it will only apply to nationals of countries that allows Filipinos to do the same in their (the foreign) country, and yet it is not reciprocated.)

 

Yes, many people skirt round the laws or ignore them, but that is adding a major risk and starting any business is enough risk without adding more.

 

Incidentally, there are a few clauses that I didnt copy, because they dont really apply to most people.

 

One states that for some types of business, you have to pass it to Filipino ownership in, in one instance, 50 years.

 

Others give exemptions to certain clauses, but with such large amounts involved that none of us would be in that league.

 

And people wonder why the Philippines has so little investment...

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KeithAngel

I really must ask ny M.P. why the UK doesnt impose the same restrictions on Filipino,s

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angelescitypi

So, I guess I as a Board Certified and Licensed Clinical Social Worker could NOT establish a private practice in the phils upon my imminent retirement from U. S. federal service?

 

 

You are correct.

 

Now, there are occasional exceptions.

I know of an opthalmic surgeon who goes to the Philippines each year to perform operations and help train the Filipino surgeons.

He, however, gets a special permit to allow him to do so.

 

I would doubt that you, or most other people, would get such an exemption.

 

 

I once gave thought of opening a private practice/ free clinic setup whereas I would train new Therapist and provide clinical supervision ( being licensed in CT). bUT I guess Filipino new Social Work Grads get enough quality training in the Pines lol. I know here in the states new graduates pay out of pocket for such invaluable training.

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