AN ACT TO FURTHER
LIBERALIZE
FOREIGN INVESTMENTS,AMENDING FOR THE
PURPOSE
REPUBLIC ACT NO. 7042,AND FOR OTHER PURPOSES[Republic
Act No. 8179]
SECTION 1.Section
3, paragraph (a), of Republic Act No. 7042, otherwise known as the "Foreign
Investments Act of 1991", is hereby amended to read as follows:
"Section 3.
Definitions.- As used in this Act:
[a] the term
"Philippine national" shall mean a citizen of the Philippines,
or
a domestic partnership or association wholly owned by citizens of the
Philippines;
or 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; or 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 or
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:
Provided, That 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, in order that the corporation shall be considered a
Philippine national."
SEC. 2. Sec. 7 of Republic
Act No. 7042 is hereby amended to read as follows:
"Sec. 7.
Foreign
investments in domestic market enterprises.
- Non-Philippine nationals may own up to one hundred percent [100%] of
domestic market enterprises unless foreign ownership therein is
prohibited
or limited by the Constitution and existing laws or the Foreign
Investment
Negative List under Section 8 hereof."
SEC. 3. Section 8 of
the Foreign Investments Act of 1991 is hereby amended to read as
follows:
"Sec. 8.
List
of investment areas reserved to Philippine nationals [Foreign
Investment
Negative List].-
The Foreign Investment Negative List shall have two [2] component
lists:
A and B:
[a]
List A shall enumerate the areas of activities reserved to Philippine
nationals
by mandate of the Constitution and specific laws.chanrobles virtual law library
[b] List
B
shall contain the areas of activities and enterprises regulated
pursuant
to law:
1. which
are
defense-related activities, requiring prior clearance and authorization
from the Department of National Defense [DND] to engage in such
activity,
such as the manufacture, repair, storage and/or distribution of
firearms,
ammunition, lethal weapons, military ordnance, explosives, pyrotechnics
and similar materials; unless such manufacturing or repair activity is
specifically authorized, with a substantial export component, to a
non-Philippine
national by the Secretary of National Defense; or
2.
which have
implications on public health and morals, such as the manufacture and
distribution
of dangerous drugs; all forms of gambling; nightclubs, bars, beer
houses,
dance halls, sauna and steam bathhouses and massage clinics.chanrobles virtual law library
"Small and
medium-sized
domestic market enterprises with paid-in equity capital less than the
equivalent
of Two hundred thousand US dollars [US$200,000.00], are reserved to
Philippine
nationals: Provided, That if [1] they involve advance
technology
as determined by the Department of Science and Technology, or [2] they
employ at least fifty [50] direct employees, then a minimum paid-in
capital
of One hundred thousand US dollars (US$100,000.00) shall be allowed to
non-Philippine nationals.chanrobles virtual law library
"Amendments to
List
B may be made upon recommendation of the Secretary of National Defense,
or the Secretary of Health, or the Secretary of Education, Culture and
Sports, endorsed by the NEDA, or upon recommendation motu proprio,
of NEDA, approved by the President, and promulgated by a Presidential
Proclamation.chanrobles virtual law library
"The transitory
Foreign
Investment Negative List established in Section 15 hereof shall be
replaced
at the end of the transitory period by the First Regular Negative Lists
to be formulated and recommended by NEDA following the process and
criteria
provided in Sections 8 and 9 of this Act. The First Regular Negative
List
shall be published not later than sixty [60] days before the end of the
transitory period. Subsequent Foreign Investment Negative List shall
become
effective fifteen [15] days after publication in a newspaper of general
circulation in the Philippines: Provided, however, That each
Foreign
Investment Negative List shall be prospective in operation and shall in
no way affect foreign investments existing on the date of its
publication.chanrobles virtual law library
"Amendments to
List
B after promulgation and publication of the First Regular Foreign
Investment
Negative List at the end of the transitory period shall not be made
more
often than once very two [2] years."
SEC. 4. Section
9 of the Foreign Investments Act of 1991 is hereby amended to read as
follows:
"SEC. 9.
Investment
rights of former natural-born Filipinos.-
For purposes of this Act, former natural-born citizens of the
Philippines
shall have the same investment rights of Philippine citizens in
Cooperatives
under Republic Act No. 6938, Rural Banks under Republic Act No. 7353,
Thrift
Banks and Private Development Banks under Republic Act No. 7906, and
Financing
Companies under Republic Act No. 5980. These rights shall not extend to
activities reserved by the Constitution including [1] the exercise of
profession;
[2] in defense-related activities under Section 8 (b) hereof, unless
specifically
authorized by the Secretary of National Defense; and [3] activities
covered
by Republic Act No. 1180 [Retail Trade Act], Republic Act No. 5487
[Security
Agency Act], Republic Act No. 7076 [Small Scale Mining Act], Republic
Act
No. 3018, as amended [Rice and Corn Industry Act], and P.D. 449
[Cockpits
Operation and Management]".chanrobles virtual law library
SEC. 5. The Foreign
Investments Act is further amended by inserting a new section
designated
as Section 10 to read as follows:
"SEC. 10.
Other
rights of natural-born citizen pursuant to the provisions of Article
XII,
Section 8 of the Constitution.- Any
natural-born
citizen who has lost his Philippine citizenship and who has the legal
capacity
to enter into a contract under Philippine Laws may be a transferee of a
private land up to a maximum area of five thousand [5,000] square
meters
in the case of urban land or three [3] hectares in the case of rural
land
to be used by him for business or other purposes. In the case of
married couples, one of them may avail of the privilege herein granted:
Provided, That If both shall avail of the same, the total area
acquired
shall not exceed the maximum herein fixed.chanrobles virtual law library
"In case the
transferee
already owns urban or rural land for business or other purposes, he
shall
be entitled to be a transferee of additional urban or rural land for
business
or other purposes which when added to those already owned by him shall
not exceed the maximum areas herein authorized.chanrobles virtual law library
"A transferee
under
this Act may acquire not more than two [2] lots which should be
situated
in different municipalities or cities anywhere in the Philippines: Provided,
That the total land area thereof shall not exceed five thousand [5,000]
square meters in the case of urban land or three [3] hectares in the
case
of rural land for use by him for business or other purposes. A
transferee
who has already acquired urban land shall be disqualified form
acquiring
rural land and vice versa."
SEC. 6. The National
Economic and Development Authority, in consultation with the Board of
Investments,
the Department of Trade and Industry and Securities and Exchange
Commission,
shall prepare and issue the necessary primer and other information
campaign
materials regarding the Foreign Investments Act and the amendments
introduced
thereto, with copies of said materials furnished all the Philippine
embassies,
consulates and other diplomatic offices abroad and disseminated to
Filipino
nationals, former natural-born Filipino citizens, and foreign
investors,
within sixty [60] days after the effectivity hereof.chanrobles virtual law library
SEC. 7. The NEDA
is hereby directed to make the necessary amendments to the implementing
rules and regulations of Republic Act No. 7042 in order to reflect the
changes embodied in the Act.chanrobles virtual law library
SEC. 8. Sections
9 and 10 of Republic Act No. 7042 and all references thereto in said
law
are hereby repealed or modified accordingly. All other laws, rules and
regulation and/or parts thereof inconsistent with the provisions of
this
Act are hereby repealed or modified accordingly.chanrobles virtual law library
SEC. 9. If
any part or section of this Act is declared unconstitutional for any
reason
whatsoever, such declaration shall not in any way affect the other
parts
or sections of this Act.chanrobles virtual law library
SEC. 10. This Act
shall take effect fifteen [15] days after publication in two [2]
newspapers
of general circulation in the Philippines.chanrobles virtual law library Approved:March 28, 1996
_____________
Republic
Act No. 7042 was amended by Republic Act No. 8179 which was
approved
on March 28, 1996. The date of effectivity thereof was on April
15,
1996.
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