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.
[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.
"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.
"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.
"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.
"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]".
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.
"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.
"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.
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.
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.
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.
SEC. 10. This
Act shall take effect fifteen [15] days after publication in two [2] newspapers
of general circulation in the Philippines.
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.
Harvard
Computer Systems, Inc.