ii. Registration

Registration of Foreign Investments

Without need of prior approval, a non-Philippine national who is 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 or invest in a domestic enterprise up to one hundred percent (100%) of its capital, unless participation of non-Philippine nationals is prohibited or limited by existing law or under Republic Act No. 7042.¹ The SEC or BTRCP cannot impose limitations on the extent of foreign ownership additional to those provided under Republic Act No. 7042.¹ However, any enterprise seeking to avail of incentives under the Omnibus Investment Code of 1987 must apply for registration with the Board of Investments (BOI)¹.

Foreign investment in export enterprises whose products and services do not fall within Lists A and B of the Foreign Investment Negative List is allowed up to one hundred percent (100%) ownership². Export enterprises that are non-Philippine nationals must register with the BOI and submit required reports to ensure continuing compliance with export requirements². If an export enterprise fails to meet its export ratio requirement, the BOI shall advise the SEC or BTRCP, which shall order the non-complying enterprise to reduce its sales to the domestic market to not more than forty percent (40%) of its total production; unjustified failure to comply subjects the enterprise to cancellation of its SEC or BTRCP registration and/or the penalties provided in Section 14 of Republic Act No. 7042.²

A person who violates any provision of the Act, the terms and conditions of registration, or the rules and regulations issued pursuant thereto is subject to a fine not exceeding One hundred thousand pesos (P100,000)³. If committed by a juridical entity, the fine is an amount not exceeding ½ of 1% of total paid-in capital but not more than Five million pesos (P5,000,000), and responsible officers are subject to a fine not exceeding Two hundred thousand pesos (P200,000)³. In addition, the violator faces forfeiture of all benefits under the Act, and the SEC has the authority to impose administrative sanctions³.