REPUBLIC ACT NO. 7652 - AN ACT
ALLOWING THE LONG-TERM LEASE OF PRIVATE LANDS BY FOREIGN INVESTORS
Section 1. Title. — This Act shall be known as the
"Investors' Lease Act."
Sec. 2. Declaration of Policy. — It is hereby
declared the policy of the State to encourage foreign investments
consistent with the constitutional mandate to conserve and develop our
own patrimony. Towards this end, the State hereby adopts a
flexible and dynamic policy on the granting of long-term lease on
private lands to foreign investors for the establishment of industrial
estates, factories, assembly or processing plants, agro-industrial
enterprises, land development for industrial, or commercial use,
tourism, and other similar priority productive endeavors.
Sec. 3. Definitions. — For purposes of this Act,
unless the context indicates otherwise, the term:
(1) "Investing in the Philippines" shall mean making
an equity investment in the Philippines through actual remittance of
foreign exchange or transfer of assets, whether in the form of capital
goods, patents, formulae, or other technological rights or processes,
upon registration with the Securities and Exchange Commission; and
(2) "Withdrawal of approved investment" shall mean
either; (a) the failure to operate the investment project for any three
(3) consecutive years; or (b) outright abandonment of the investment
project at any time during the approved lease period: provided, that
failure to pay lease rental for three (3) consecutive months coupled
with the failure to operate the investment project for the same period
shall be deemed an outright abandonment of the project.
Sec. 4. Coverage. — Any foreign investor investing
in the Philippines shall be allowed to lease private lands in
accordance with the laws of the Republic of the Philippines subject to
the following conditions:
(1) No lease contract shall be for a period exceeding
fifty (50) years, renewable once for a period of not more than twenty-
five (25) years;
(2) The leased area shall be used solely for the
purpose of the investment upon the mutual agreement of the parties;
(3) The leased premises shall comprise such area as
may reasonably be required for the purpose of the investment subject
however to the Comprehensive Agrarian Reform Law and the Local
Government Code.
The leasehold right acquired under long-term lease contracts entered
into pursuant to this Act may be sold, transferred, or assigned:
provided, that when the buyer, transferee, or assignee is a foreigner
or a foreign-owned enterprise, the conditions and limitations in
respect to the use of the leased property as provided for under this
Act shall continue to apply.
Sec. 5. Limitations. — (1) Foreign individuals,
corporations, associations, or partnerships not otherwise investing in
the Philippines as defined herein shall continue to be covered by
Presidential Decree No. 471 and other existing laws in lease of lands
to foreigners.
(2) Withdrawal of the approved investment in the
Philippines within the period of the lease agreement entered into under
this Act, or use of the leased area for the purpose other than that
authorized, shall warrant the ipso facto termination of the lease
agreement without prejudice to the right of the lessor to be
compensated for the damages he may have suffered thereby.
(3) Any lease agreement under this Act which is
renewable at the option of the lessee subject to the same terms and
conditions of the original contract shall be interpreted to mean as
renewable upon the mutual agreement of the parties.
(4) In addition to the conditions for the renewal of
a lease agreement after the period of fifty (50) years as provided
herein, the foreign lease shall show that it has made social and
economic contributions to the country.
(5) In the case of tourism projects, lease of private
lands by foreign investors qualified herein shall be limited to
projects with an investment of not less than five million (5M) US
dollars, seventy percent (70%) of which shall be infused in said
project within three years from the signing of the lease contract.
Sec. 6. Termination of Lease Contract. — The
Secretary of Trade and Industry shall terminate any lease contract
entered into under the provisions of this Act, if the investment
project is not initiated within three (3) years from the signing of the
lease contract.
Sec. 7. Penal Provision. — Any contract or
agreement made or executed in violation of any of the following
prohibited acts shall be null and void ab initio and both contracting
parties shall be punished by a fine of not less than One Hundred
thousand pesos (P100,000) nor more than One million pesos (P1,000,000),
or imprisonment of six (6) months to (6) years, or both, at the
discretion of the court:
(1) Any provision in the lease agreement stipulating
a lease period in excess of that provided in paragraph (1) of Sec. 4;
(2) Use of the leased premises for the purpose
contrary to existing laws of the land, public order, public policy,
morals, or good customs;
(3) Any agreement or agreements resulting is the
lease of land in excess of the area approved by the DTI: provided,
that, where the excess of the totality of the area leased is due to the
acts of the lessee, the lessee shall be held solely liable therefore:
provided, further, that, in the case of corporations, associations, or
partnerships, the president, manager, director, trustee, or officers
responsible for the violation hereof shall bear the criminal
liability.
Sec. 8. Separability Clause. — In case any
provision of this Act or the application of such provision is deemed
unconstitutional, the remaining provisions of this Act or the
application of such provisions shall not be affected thereby.
Sec. 9. Repealing Clause. — All acts, rules and
regulations contrary to or inconsistent with this Act are hereby
repealed or modified accordingly.
SECTION 10. Effectivity Clause. — this Act shall take
effect immediately upon its approval.
Approved: June 4, 1993
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