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Business
activities regarding the production, milling,
processing, trading except retailing of agricultural
products as provided for under Republic Act 8762 and
P.D. 194, contracts for supply of materials under R.A.
5183, project proponent and facility operator of
Build-operate-and-transfer (BOT) (R.A. 7718), operation
of deep-sea commercial fishing (R.A. 8550), adjustment
companies (P.D 612 as amended by P.D. 1814) and
ownership of condominium units (Condominium Act) are
also covered by the 60-40 foreign-equity ratio.
Ventures in the culture, production,
milling, processing and trading, except retailing, of
rice and corn are covered; provided, that the
designation of the area in the culture and production,
as well as the trading of the produce in the domestic or
foreign markets, shall be under the direction and
control of the National Food Authority (NHA). Take
note that alien association, corporation or partnership
must have the necessary financial capability and
technical competence to engage in these activities (P.D.
194).
Section 1 of Republic Act 5183
explicitly states that, no contract either through a
public bidding or negotiated contract for the supply to,
or procurement by, any government-owned or controlled
corporation, company, agency or municipal corporation of
materials, equipment, goods and commodities shall be
awarded to any contractor or bidder who is not a citizen
of the Philippines or which is not a corporation or
association at least sixty (60%) percent of the capital
of which is owned by Filipino citizens, except, as to a
citizen, corporation or association of a country the
laws or regulations of which grant similar rights or
privileges to citizens of the Philippines. In the latter
case the Flag Law shall continue to be applicable.
As to BOT projects, this pertains to a
contractual arrangement whereby the project proponent
undertakes the construction, including financing, of a
given infrastructure facility, and the operation and
maintenance thereof. The project proponent operates the
facility over the fixed term during which it is allowed
to charge facility users appropriate tolls, fees,
rentals, and charges not exceeding those proposed in its
bid or as negotiated and incorporated in the contract to
enable the project proponent to recover its investment,
and operating and maintenance expenses in the project.
The project proponent transfers the facility to the
government agency or local-government unit concerned at
the end of the fixed term which shall not exceed fifty
(50) years: provided, that in case of an infrastructure
or development facility whose operation requires a
public-utility franchise, the proponent must be Filipino
or, if a corporation, must be duly registered with the
Securities and Exchange Commission and owned up to at
least sixty percent (60%) by Filipinos (Republic Act
7718, Section 2a).
With regard to deep sea commercial
fishing, the law mandates that no commercial fishing
vessel license shall be issued except to citizens of the
Philippines, partnership or to associations,
cooperatives or corporations duly registered in the
Philippines at least sixty percent (60%) of the capital
stock of which is owned by Filipino citizens. No person
to whom a license has been issued shall sell, transfer
or assign, directly or indirectly, his stock or interest
therein to any person not qualified to hold a license.
Any such transfer, sale or assignment shall be null and
void and shall not be registered in the books of the
association, cooperative or corporation (Section 27 of
Republic Act 8550).
On the ownership of condominium units
where the common areas in the project are coowned by the
owners of the separate units, Section 5 of Republic Act
4726 enunciates that, any transfer or conveyance of a
unit or an apartment, office or store or other space
therein, shall include the transfer or conveyance of the
undivided interests in the common areas or, in a proper
case, the membership or shareholdings in the condominium
corporation: provided, however, that where the common
areas in the condominium project are owned by the owners
of separate units as coowners thereof, no condominium
unit therein shall be conveyed or transferred to persons
other than Filipino citizens, or corporations at least
sixty percent of the capital stock of which belong to
Filipino citizens, except in cases of hereditary
succession.
In the next column, I will have a
thorough discussion on the equity ratio where foreign
participation shall be allowed up to sixty- (60%)
percent equity or a reverse of the 60-40 equity we have
written above. |
