DOING BUSINESS IN THE PHILIPPINES

Can a  foreigner  do business in the Philippines?

The answer is definitely a yes. However, there are certain requirements  provided by Philippine laws. 

Subject to certain requirements under Philippine laws, A foreigner can engage in business by organizing under Philippine laws a (1) sole proprietorship; (2) partnership or  a (3) corporation (stock or non-stock) or if it is organized under foreign laws it can engaged in  business through its branch office, representative office and  Regional  Headquarters or Regional Operating Headquarters.

It is  the Foreign Investment Act (FIA) of 1991  that governs foreign investments in the Philippines. FIA opened  domestic market to 100% foreign investment except those in  the Foreign Investment Negative List (FINL).

This FINL are shortlist of investment areas or activities which may be opened to foreign investors and/or reserved to Filipino nationals.    

If an activity to be engaged in (if not included in FINL) has more than 40% foreign equity the paid in capital required is US$200,000.00. It may be lowered to US$S100,000.00 if the business involves advance technology or the  company employs at least 50 direct employees. Thus, if the equity are as follow: 60% Filipino and 40% foreign then the paid in capital can be less than US$200,000.00.

In engaging in business in the Philippines please be guided by  the  FINL shortlist providing as follows:

LIST A: FOREIGN OWNERSHIP IS LIMITED BY MANDATE OF THE CONSTITUTION AND SPECIFIC LAWS
No Foreign Equity

1. Mass Media except recording (Art. XVI, Sec. 11 of the Constitution; Presidential Memorandum dated 04 May 1994)

2. Practice of professions  (Art. XII, Sec. 14 of the Constitution; Sec. 1 of R.A. 5181)
3. Retail trade enterprises with paid-up capital of not less than US$ 2,500,000.00 (Sec. 5 of R.A. 8762)
4. Cooperatives (Ch. III, Art. 26 of R.A. 6938)
5. Private Security Agencies (Sec. 4 of R.A. 5487)
6. Small-scale Mining (Sec. 3 of R.A. 7076)
7. Utilization of Marine Resources in archipelagic waters, territorial sea, and exclusive economic zone (Art. XII, Sec. 2 of the Constitution)
8. Ownership, operation and management of cockpits (Sec. 5 of P.D. 449)
9. Manufacture, repair, stockpiling and/or distribution of nuclear weapons (Art. II Sec. 8 of the Constitution)
10. Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons and anti-personal mines (Various treaties to which the Philippines is a signatory and conventions supported by the Philippines)
11. Manufacture of firecrackers and other pyrotechnic devices (Sec. 5 of R.A. 7183)

Up to Twenty Percent (20%) Foreign Equity
12. Private radio communication network (R.A. 3846)
Up to Twenty-Five Percent (25%) Foreign Equity
13. Private recruitment, whether for local or overseas employment (Art. 27 of P.D. 442)
14. Contracts for the construction and repair of locally-funded public works (Sec. 1 of CA 541, LOI 630) except:
a. infrastructure/development projects covered in R.A. 7718; and
b. projects which are foreign funded or assisted and required to undergo international competitive bidding(Sec. 2(a) of R.A. 7718)
15. Contracts for construction of defense-related structure (Sec. 1 of CA 541)
Up to Thirty Percent (30%) Foreign Equity
16. Advertising (Art. XVI, Sec. 11 of the Constitution)
Up to Forty Percent (40%) Foreign Equity
17. Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution)
18. Ownership of Private Lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of CA 141)
19. Operation and management of public utilities (Art. XII, Sec. 11 of the Constitution; Sec. 16 of CA 146)
20. Ownership/establishment and administration of educational institutions (Art. XIV, Sec. 4 of the Constitution)
21. Culture, production, milling, processing, trading excepting retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the by-products thereof (Sec. 5 of PD 194; Sec. 15 of R.A. 5762)
22. Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation (Sec. 1 of R.A. 5183)
23. Project Proponent and facility Operator of a BOT project requiring a public utilities franchise (Art. XII, Sec. 11 of the Constitution; Sec. 2a of R.A. 7718)
24. Operation of deep sea commercial fishing vessels (Sec. 27 of R.A. 8550)
25. Adjustment Companies (Sec. 323 of P.D. 612 as amended by P.D. 1814)
26. Ownership of condominium units where the common areas in the condominium projects are co-owned by the owners of the separate units or owned by a corporation (Sec. 5 pf R.A. 4726)
Up to Sixty Percent (60%) Foreign Equity

27. Financing companies regulated by the Securities and Exchange Commission (Sec. 6 of R.A. 5980 as amended by R.A. 8556)

28. Investment housed regulated by the SEC (Sec. 5 of P.D. 129 as amended by R.A. 8366)

LIST B: FOREIGN OWNERSHIP IS LIMITED FOR REASONS OF SECURITY, DEFENSE, RISK TO HEALTH AND MORALS AND PROTECTION OF SMALL AND MEDIUM-SCALE ENTERPRISES

Up to Forty Percent (40%) Foreign Equity

1.  Manufacture, repair, storage, and/or distribution of products and ingredients used in the manufacture thereof requiring Philippine National Police [PNP] clearance:

a.  Firearms [handguns to shotguns], parts of firearms and ammunition therefor, instruments or implements used or intended to be used in the manufacture of firearms
b.  Gunpowder
c.  Dynamite
d.  Blasting supplies
e.  Ingredients used in making explosives:

i.    Chlorate of potassium and sodium
ii.    Nitrates of ammonium 4vxc & barium, copper [11], lead [11] calcium and cuprite
iii.    Nitric acid
iv.   Nitrocellulose
v.    Perchlorates of ammonium, potassium and sodium
vi.   Dinitrocellulose
vii.  Glycerol
viii.  Amorphous Phosphorus
ix.   Hydrogen Peroxide
x.    Strontium Nitrate Powder
xi.   Toluene

f.  Telescopic sights, sniperscope and other similar devices [Republic Act No. 7042]

2.  Manufacture, repair, storage and/or distribution of products requiring Department of National Defense [DND] clearance:

a.  Guns and ammunition for warfare
b.  Nuclear weapons and ordnance
c.  Military ordnance and parts thereof [e.g., torpedoes, mines, depthcharger, bombs, grenades, missiles]
d.  Gunnery, bombing and fire control systems and components
e.  Guided missiles/missile systems and components
f.   Tactical aircraft (fixed and rotary-winged), components and parts thereof
g.  Space vehicles and component system
h.  Combat vessels (air, land, naval) and auxiliaries
i.   Weapons repair and maintenance equipment
j.   Military communications equipment
k.  Night vision equipment
l.   Stimulated coherent radiation devices, components and accessories
m. Biological warfare components
n.  Armament training devices
[Republic Act No. 7042, as amended by R. A. No. 8179]

3.  Manufacture and distribution of dangerous drugs [Republic Act No. 7042, as amended by R. A. No. 8179]

4.  Sauna and steam bathhouses, massage clinics and other like activities regulated by law because of risks they may impose to public health and morals [Republic Act No. 7042, as amended by R. A. No. 8179]

5.  Other forms of gambling, e.g., race track operation; racehorse ownership/importation [Republic Act No. 7042, as amended by R. A. No. 8179]

6.  Domestic market enterprises with paid-in equity of less than the equivalent of US$200,000.00 unless they involve advance technology or they employ at least fifty [50] direct employees, the minimum paid-in capital will be reduced to US $ 100,000.00. [R. A. 7042, as amended by R.A. 8179]

DIVORCE IN THE PHILIPPINES

An OFW, whom we shall call by the name of Wiljina, sent me an inquiry asking if there is a divorce under Philippine law.
Wiljina, there is a divorce in the Philippines.We simply call it a relative divorce. A relative divorce is the legal separation stated under Article 55 of the Family Code. A marriage bond is not severed. It is merely a separation of the spouses from bed to board.

ANNULMENT IN THE PHILIPPINES

http://philattorney.com/tell-me-about/annulment-in-the-philippines-philippine-law-firm-lawyers/ 

 May I know what are the grounds to declare a marriage void?

The following are the grounds to declare a marriage void:

1. Those contracted by any party below eighteen years of age even with the consent of their parents or guardians;
2. Those solemnized by any person not legally authorized to perform marriages unless such marriages were contracted with either or both parties believing in good faith that the solemnizing officer had the legal authority to do so;
3. Those solemnized without license unless falling under the exceptions where no marriage license is required;
4. Those bigamous or polygamous marriages;
5. Those contracted through mistake of one contracting party as to the identity of the other;
6. Psychological Incapacity of the husband or wife, existing at the time of marriage, which prevents him or her from complying with the essential marital obligations of marriage, even if such incapacity becomes manifest only after the solemnization of the marriage;
7. Incestuous Marriages (between ascendants and descendants; between brothers and sisters whether full or half blood);
8. Marriages between relatives:

1. between collateral blood relatives, whether legitimate or illegitimate, up to the fourth civil degree;
2. between step-parents and step-children;
3. between parents-in-law and children-in-law;
4. between the adopting parent and the adopted child;
5. between the surviving spouse of the adopting parent and the adopted child;
6. between the surviving spouse of the adopted child and the adopter;
7. between an adopted child and a legitimate child of the adopter;
8. between adopted children of the same adopter;
9. between parties where one, with the intention to marry the other, killed the other person’s spouse, or his or her own spouse.

ON RECOGNITION OF FOREIGN DIVORCE IN THE PHILIPPINES

I am a Filipino citizen and married to a Japanese national. However, my husband divorced me in his country. Can I freely remarry here in the Philippines?

The second paragraph of Article 26 of the Family Code states that divorce validly obtained by the alien spouse capacitating him/her to remarry, the Filipino spouse shall likewise have capacity to remarry under Philippine law. However, you have to file a petition for recognition of that foreign divorce.

According to the latest ruling of the Supreme Court in the case of Corpus vs. Sto. Tomas, decided in August 11,2010, G.R. No. 186571, the recognition of the foreign divorce decree may be made applying Rule 108 of the Rules of Court (correction and cancellation of entry in the Certificate of Marriage) as the object of the said special proceedings is precisely to establish the status or right of a party or a particular fact. Moreover, Rule 108 of the Rules of Court can serve as the appropriate adversarial proceeding by which the applicability of the foreign judgment can be measured and tested in terms of jurisdictional infirmities, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

Simply stated,  a resort to Rule 108 is required because the divorce decree cannot be automatically annotated on the Certificate of Marriage.

In filing a petition for recognition of divorce, an authenticated copies of the foreign law used as basis of the divorce decree and  the decree of divorce are  needed.

CHILD CUSTODY

I received an email from a lady, whom we shall call Hanna (not her real name). She is an Engineer and presently employed in Dubai. However, prior to her working abroad she had a love child from her boyfriend of five years, Boggie (not his real name). They lived together without the benefit of marriage. Until an opportunity for Hanna to work abroad came. Then she left her son and Boggie. Unfortunately, the relationship went sour. Boggie started to blame her for leaving abroad and deprived her to see her son every time she is in the Philippines. She inquired on what legal steps she can take to gain the custody of her son.

There are options which Hanna can take in order to have the custody of her love child.

They are: Petition for CHILD CUSTODY or HABEAS CORPUS pursuant to A.M. No. 03-04-04SC, the Rule On Custody Of Minors and Writ Of Habeas Corpus In Relation To Custody Of Minors.

The steps are as follows:

For Child Custody:

1. Hanna can file the petition in the Family Court of the province or city where she resides or where her love child may be found with Boggie as the party respondent;

2. If the court is satisfied that the petition is sufficient in form and substance, it shall direct the clerk of court to issue summons, which shall be served together with a copy of the petition personally to Boggie, as the respondent;

3. Then Boggie shall file an answer to the petition, personally verified by him, within five days after service of summons and a copy of the petition;

4.Upon the filing of the verified answer or the expiration of the period to file it, the court may order a social worker to make a case study of the minor and the parties and to submit a report and recommendation to the court at least three days before the scheduled pre-trial;

5.Within fifteen days after the filing of the answer or the expiration of the period to file answer, the court shall issue an order: (1) fixing a date for the pre-trial conference; (2) directing the parties to file and serve their respective pre-trial briefs in such manner as shall ensure receipt thereof by the adverse party at least three days before the date of pre-trial; and
(3) requiring the respondent to present the minor before the court;

6.If Hanna fails to appear personally at the pre-trial, the case shall be dismissed, unless his counsel or a duly authorized representative appears in court and proves a valid excuse for the non-appearance of the petitioner. And if Boggie has filed his answer but fails to appear at the pre-trial, Hanna shall be allowed to present his evidence ex parte. The court shall then render judgment on the basis of the pleadings and the evidence thus presented;

7.At the pre-trial, Hanna and Boggie may agree on the custody of their love child. If the parties fail to agree, the court may refer the matter to a mediator who shall have five days to effect an agreement between the parties. If the issue is not settled through mediation, the court shall proceed with the pre-trial conference, on which occasion it shall consider such other matters as may aid in the prompt disposition of the petition;

8. After an answer has been filed or after expiration of the period to file it, the court may issue a provisional order awarding custody of the minor. As far as practicable, the following order of preference shall be observed in the award of custody:
(a) Both parents jointly;
(b) Either parent, taking into account all relevant considerations, especially the choice of the minor over seven years of age and of sufficient discernment, unless the parent chosen is unfit;
(c) The grandparent, or if there are several grandparents, the grandparent chosen by the minor over seven years of age and of sufficient discernment, unless the grandparent chosen is unfit or disqualified;
(d) The eldest brother or sister over twenty-one years of age, unless he or she is unfit or disqualified;
(e) The actual custodian of the minor over twenty-one years of age, unless the former is unfit or disqualified; or
(f) Any other person or institution the court may deem suitable to provide proper care and guidance for the minor.

9. In awarding custody, the court shall consider the best interests of the minor and shall give paramount consideration to his material and moral welfare. The best interests of the minor refer to the totality of the circumstances and conditions as are most congenial to the survival, protection, and feelings of security of the minor encouraging to his physical, psychological and emotional development. It also means the least detrimental available alternative for safeguarding the growth and development of the minor;

The court shall also consider the following:
(a) Any extrajudicial agreement which the parties may have bound themselves to comply with respecting the rights of the minor to maintain direct contact with the non custodial parent on a regular basis, except when there is an existing threat or danger of physical, mental, sexual or emotional violence which endangers the safety and best interests of the minor;
(b) The desire and ability of one parent to foster an open and loving relationship between the minor and the other parent;
(c) The health, safety and welfare of the minor;
(d) Any history of child or spousal abuse by the person seeking custody or who has had any filial relationship with the minor, including anyone courting the parent;
(e) The nature and frequency of contact with both parents;
(f) Habitual use of alcohol, dangerous drugs or regulated substances;
(g) Marital misconduct;
(h) The most suitable physical, emotional, spiritual, psychological and educational environment for the holistic development and growth of the minor; and
(i) The preference of the minor over seven years of age and of sufficient discernment, unless the parent chosen is unfit.

10. In awarding provisional custody, the court shall provide an appropriate visitation rights to the non-custodial parent or parents, unless the said parent or parents unfit or disqualified. The temporary custodian shall give the court and non custodial parent or parents at least five days' notice of any plan to change the residence of the minor or take him out of his residence for more than three days provided it does not prejudice the visitation rights of the non-custodial parent or parents;

11. The minor child subject of the petition shall not be brought out of the country without prior order from the court while the petition is pending. The court, motu proprio or upon application under oath, may issue ex parte a hold departure order, addressed to the Bureau of Immigration and Deportation, directing it not to allow the departure of the minor from the Philippines without the permission of the court. The Family Court issuing the hold departure order shall furnish the Department of Foreign Affairs and the Bureau of Immigration and Deportation of the Department of Justice a copy of the hold departure order within twenty-four hours from its issuance and through the fastest available means of transmittal;

12. If warranted the court may issue a Protection Order requiring any person:
(a) To stay away from the home, school, business, or place of employment of the minor, other parent or any other party, or from any other specific place designated by the court;
(b) To cease and desist from harassing, intimidating, or threatening such minor or the other parent or any person to whom custody of the minor is awarded;
(c) To refrain from acts of commission or omission that create an unreasonable risk to the health, safety, or welfare of the minor;
(d) To permit a parent, or a party entitled to visitation by a court order or a separation agreement, to visit the minor at stated periods;
(e) To permit a designated party to enter the residence during a specified period of time in order to take personal belongings not contested in a proceeding pending with the Family Court; and
(f) To comply with such other orders as are necessary for the protection of the minor.

13. After trial, the court shall render judgment awarding the custody of the minor to the proper party considering the best interests of the minor. If it appears that both parties are unfit to have the care and custody of the minor, the court may designate either the paternal or maternal grandparent of the minor, or his oldest brother or sister, or any reputable person to take charge of such minor, or commit him to any suitable home for children. In its judgment, the court may order either or both parents to give an amount necessary for the support, maintenance and education of the minor, irrespective of who may be its custodian. In determining the amount of support, the court may consider the following factors: (1) the financial resources of the custodial and non-custodial parent and those of the minor; (2) the physical and emotional health, special needs, and aptitude of the minor; (3) the standard of living the minor has been accustomed to; and (4) the non-monetary contributions that the parents would make toward the care and well-being of the minor.

The court may also issue any order that is just and reasonable permitting the parent who is deprived of the care and custody of the minor to visit or have temporary custody;

For writ of habeas corpus

1. A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs. However, the petition may be filed with the regular court in the absence of the presiding judge of the Family Court, provided, however, that the regular court shall refer the case to the Family Court as soon as its presiding judge returns to duty. The petition may also be filed with the appropriate regular courts in places where there are no Family Courts. The writ issued by the Family Court or the regular court shall be enforceable in the judicial region where they belong;

The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a Family Court or to any regular court within the region where the petitioner resides or where the minor may be found for hearing and decision on the merits.
Upon return of the writ, the court shall decide the issue on custody of minors. The appellate court, or the member thereof, issuing the writ shall be furnished a copy of the decision;

2. The hearings on custody of minors may, at the discretion of the court, be closed to the public and the records of the case shall not be released to non-parties without its approval;

However, Hanna has to attend the hearings in order to prosecute the petition.