Nationalized Industries
A foreign investments negative list or negative list refers to a list of areas of economic activity whose foreign ownership is limited to a maximum of 40 percent of the equity capital of the enterprises engaged in said activities. In essence, foreign ownership shall be prohibited or limited to industries that are wholly or partially nationalized.Notes: Wholly nationalized industries are allowed only to Filipino. Some examples are Retail Trade, Education and Mass Media. Simply, foreign ownership should be 0%.
Notes: Partially nationalized industries mean where Filipino should hold at least 60% of stake.
Foreign Employment in nationalized industries
The anti-dummy law prohibits the employment by any person, corporation, or association of an alien, who shall intervene in the management, operation, administration or control thereof, whether as officer, employee, or laborer, when the exercise or enjoyment of the property or of the franchise, privilege, or business engaged in by such person, corporation or association is expressly reserved by the Constitution or the law to the citizens of the Philippines or corporations or associations at least 60 percent of the capital of which is owned by such citizens.
Foreign Employment in nationalized industries
The anti-dummy law prohibits the employment by any person, corporation, or association of an alien, who shall intervene in the management, operation, administration or control thereof, whether as officer, employee, or laborer, when the exercise or enjoyment of the property or of the franchise, privilege, or business engaged in by such person, corporation or association is expressly reserved by the Constitution or the law to the citizens of the Philippines or corporations or associations at least 60 percent of the capital of which is owned by such citizens.
Notes: Department of Justice in Opinion
No. 37, Series of 1976, stating that in firms engaged in wholly or partially nationalized
activities, aliens are banned from being appointed to management positions as
president, vice-president, treasurer, auditor, etc. of said companies except
technical personnel whose employment may be specifically authorized by the Secretary of Justice, although they can
be elected directors in proportion to their allowable participation or share in the capital
of such activities in accordance with the Anti-Dummy Law.
Notes: Technical Personnel
Merely having the title "Technical" doesn't mean it's a technical job. An evaluation has to be made as to whether the duties require expertise of a technical nature. Also, the
description of duties and the justification for the employment of an alien technician, being self-serving, are
only persuasive.
Notes: Laws allowing foreign nationals employment without DOJ approval
1. The investment Incentives Act provides that within five years from registration of an enterprise
covered by said Act, said enterprise may employ, for a maximum period of five years, foreign
nationals in supervisory, technical or advisory positions not in excess of 5% of its total employment
in each such category.
2. The Surigao Mineral Reservation Board is authorized by law to approve the importation of highly
technical and specialized personnel and executive staff for its undertakings.
3. Under the Petroleum Act of 1949, the Director of Mines, now the Energy Development Board, is
empowered to approve the employment of expatriate personnel "for executive or technical work and
for all other works" selected by petroleum concessionaires.
4. The Mining Decree (P.D. No. 463) authorizes the employment of non-Filipinos for "technical and
specialized work" in the exploitation of development of mining claims, with the approval of the
Director of Mines.
Notes: Resident Foreign Company
A Foreign-owned Domestic Corporation is one wherein foreign equity exceeds forty percent (40%). It may be controlled by foreigners but the Corporate Secretary and Treasurer must be Filipino residents and citizens.
1. the President must be a director;
2. the Treasurer need not be a director; and
3. the Corporate Secretary must be a Philippine citizen and resident but need not be a director
2. the Treasurer need not be a director; and
3. the Corporate Secretary must be a Philippine citizen and resident but need not be a director
Any two or more positions may be held concurrently by the same person, except that no one shall act as President and Treasurer or as President and Corporate Secretary at the same time.
As a matter of policy, the SEC requires that the Treasurer must be a Philippine resident.