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The
government will start going after foreign nationals who
own retail outlets in the country that are not duly
registered in accordance with the Retail Trade
Liberalization Act (RA 8762).
This is
after reports reached the office of Trade Secretary
Peter B. Favila that there are now several convenient
specialty stores and eateries owned by foreigners.
However,
based on the records of the DTI, only 11 firms have
applied for government license and accreditation as
specified by the law.
These
companies are the Adidas Salomon AG, Caltex Services
Philippines Inc., L’Oreal Philippines Inc., Louis
Vuitton Malleteir SA, McDonald’s, Mitsui, Okram Holdings
Asia, Petron Corporation, Tan Chong, Watsons Personal
Care Stores and Marionnaud Philippines Inc.
These
firms registered with the Board of Investments (BOI)
their business collectively worth about P50 billion.
Favila
said foreign nationals should have the necessary
government registration permits and licenses before
engaging in retail trade in the country.
Before,
retail trade was restricted to Filipino nationals.
With the
passage of the Retail Trade Liberalization Act, however,
foreigners can now engage in the business provided they
meet the capitalization, net worth and other
requirements of the law.
Favila
said the requirements are stringent to limit the number
of foreign nationals in the retail sector and protect
small-business men from being crowded out in the
business.
“We are
coordinating with local government units and other
government units to ensure that only legitimate
businesses are operating and that foreigners do not
encroach on the small retail business which is reserved
for Filipinos,” Favila said.
Under RA
8762, which took effect in March 2000, foreign investors
can own up to 100 percent of retail enterprises with
paid-up capital of $2.5 million or more.
A store
to be opened should not be below the peso equivalent of
$830,000.
The
parent corporation of the foreign retailers should be
worth at least $200 million.
”Below
the $2.5 million capital specified, foreigners cannot go
into retail business even if he just owns a portion of
it,” Favila said.
Also
fully open to investors are those engaged in the retail
of high-end or luxury items (Category D) with a net
worth of at least $50 million.
Foreign
investors going to retail trade must also own at least
five retail stores or franchises anywhere in the world
or at least one branch with capitalization of $25
million or more, have a five-year track record in
retailing, and that the foreign retailer’s home country
offers reciprocal benefits to Filipinos. |
