i. Definition

Definition of Terms under the Foreign Investments Act

Under Republic Act No. 7042, otherwise known as the Foreign Investments Act of 1991, as amended by Republic Act No. 8179, a Philippine national is defined as any of the following:¹²³

• A citizen of the Philippines;³
• A domestic partnership or association wholly owned by citizens of the Philippines;³
• A corporation organized under the laws of the Philippines of which at least sixty percent (60%) of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines;³
• A corporation organized abroad and registered as doing business in the Philippines under the Corporation Code of which one hundred percent (100%) of the capital stock outstanding and entitled to vote is wholly owned by Filipinos; or³
• A trustee of funds for pension or other employee retirement or separation benefits, where the trustee is a Philippine national and at least sixty percent (60%) of the fund will accrue to the benefit of Philippine nationals.³

However, where a corporation and its non-Filipino stockholders own stocks in a Securities and Exchange Commission (SEC) registered enterprise, at least sixty percent (60%) of the capital stock outstanding and entitled to vote of each of both corporations must be owned and held by citizens of the Philippines, and at least sixty percent (60%) of the members of the Board of Directors of each of both corporations must be citizens of the Philippines, in order for the corporation to be considered a Philippine national.³

The law further defines an investment as equity participation in any enterprise organized or existing under the laws of the Philippines.⁴ Meanwhile, a foreign investment refers to an equity investment made by a non-Philippine national in the form of foreign exchange and/or other assets actually transferred to the Philippines and duly registered with the Central Bank, which assesses and appraises assets other than foreign exchange.⁴