SEC REGISTRATION REQUIREMENTS

Businesses Requiring Endorsements From Other Government Agencies *

a. Air Transport

Civil Aeronautics Board

b. Banks, Pawnshops or other Financial

Bangko Sentral ng Pilipinas
Intermediaries with Quasi-Banking Functions
c. Charitable Institutions

Department of Social Welfare and

Development

d. Educational Institutions: (stock & nonstock)

Elementary to High school

Department of Education

College, Tertiary Course

Commission on Higher Education

Technical Vocational Course

Technical Education Skills and

Development Authority

f. Electric Power Plants

Department of Energy

g. Hospitals/Health Maintenance
Organizations

Department of Health

h. Insurance

Insurance Commission

i. Neighborhood Associations

Housing and Land Use Regulatory

Board

j. Professional Associations

Professional Regulation
Commission

k. Radio, TV, Telephone

National Telecommunications
Commission

l. Recruitment for Overseas Employment

Philippine Overseas Employment

Administration

m. Security Agency

Philippine National Police

n. Volunteer Fire Brigade

Bureau of Fire Protection

o. Water Transport/Shipbuilding/Ship Repair Maritime Industry Authority

Investing in the Philippines

Incentives and Restrictions

A foreign investor is offered a lot of incentives when investing in the Philippines.

Incentives include tax holidays, tax reduction for labor expenses, and duty-free
importation of capital equipment, and are available for companies investing in
preferred areas and registered with the Board of Investments (BOI). The sustainability
of these incentives has been questioned from time to time. According to some
opinions, these incentives create a burden too heavy to carry for the Philippine
national economy and therefore should be removed.

To develop the commitment of foreign investors the land lease times were prolonged
in January 1995. The lease contract can be made for 50 years and be renewed once for
another 25 years.
Restrictions on foreign participation are mentioned in three negative lists. These lists
are administered by the National Economic and Development Authority (NEDA). The
division into domestic and export enterprises is relevant when talking about
investment incentives. The basic idea is not to offer incentives to companies that
would use the benefit to compete in the Philippine market with local companies. A
domestic market enterprise produces goods or services solely for the domestic market.
Domestic market enterprises with more than 40% foreign participation should have a
paid-up capital of at least USD 500 000, if advanced technology is not used.
An export enterprise is a manufacturing, processing or service enterprise exporting at
least 60% of its output. Also, a trader buying domestically manufactured products and
exporting at least 60% of the purchase is regarded as an export enterprise. If the
production is not included on A or B negative lists, there are no restrictions
concerning foreign ownership.
If the investment is made in a Special Economic Zone (earlier Export Processing
Zone), there are no restrictions on foreign participation. However, these companies are
required to export the whole production, unless the company has received specific
approval from the Philippine Economic Zone Authority (PEZA). This approval is
always made in a specific situation and may not be issued beforehand. Once the
approval is gained, the domestic sales cannot exceed 30% of the production.
There are plans to continue the economic liberalization program, e.g. list B might be
removed entirely and retail trade is already proposed to be opened to foreigners, too.

Investment Negative Lists

List A includes limitations made by constitution or special law.
No foreign participation is allowed in

mass media
most licensed professional services (e.g. accountants, lawyers,
engineers)

retail trade

cooperatives

private security agencies

small-scale mining

fisheries

rice and corn farming

25% foreign equity is allowed in

recruitment agencies
locally funded public works projects

30% foreign equity is allowed in

advertizing

40% foreign equity is allowed in

resources development and utilization

land ownership

public utilities

educational institutions

financing companies

construction

List B restricts foreign investment for reasons of security, defense, health, morals
and protection of small and medium-sized enterprises.
40% foreign participation is allowed in

explosives
munitions

armaments

dangerous drugs

massage clinics

gambling

domestic market enterprises with capital less than USD 500

000, provided enterprises don't use advanced technology

small-scale export enterprises with capital less than USD 500

000 depleting natural resources