Republic Act (RA) 7042, also known as the Foreign Investments Act (FIAT) of 1991, is the basic law that governs foreign investments in the Philippines.
Key features of the FIA
Concept of a negative list
Opened domestic market to 100% foreign investment except those in the Foreign Investment Negative List (FINL)
Redefined “export enterprise” to mean at least 60% for export
Allowed 100% foreign ownership of business activities outside FINL but without incentives
Under this law, foreign investors are allowed to invest 100% equity in companies engaged in almost all types of business activities subject to certain restrictions as prescribed in the FINL, which is a shortlist of investment areas or activities that may be opened to foreign investors/reserved to Filipino nationals.
Classifications of the FINL
List A - consists of areas of activities reserved to Philippine nationals where foreign equity participation in any domestic or export enterprise engaged in any activity listed therein shall be limited to a maximum of 40% as prescribed by the Constitution and other specific laws.
List B - consists of areas of activities where foreign ownership is limited pursuant to law such as defense or law enforcement-related activities, which have negative implications on public health and morals, and small and medium-scale enterprises.
The FIA clearly states that if the activity to be engaged in is not included in the FINL, is more than 40% foreign-owned and will cater to the domestic market, the capital required is at least US$200,000. The capital may be lowered to US$100,000, if activity involves advance technology, or the company employs at least 50 direct employees.
If the foreign company will export at least 60% of its output, or a trader that purchases products domestically will export at least 60% of its purchases, the required capital of US$200,000.00 paid-in is not applicable.
If the company is at least 60% Filipino - 40% foreign-owned and will cater to the domestic market, paid-in capital can be less than US$200,000.00.
Specific areas of equal investment rights for former Filipino nationals
While most areas of businesses have limits for foreign investors, Section 9 of the Amended FIA of 1991 lists the following types of businesses where natural-born Filipinos can enjoy the same investment rights as a Philippine citizen.
In applying for a business permit in the City of Manila, the applicant should submit a business transaction form (BTF) which contains vital information to process the application. The BTF is available in the Business Promotions and Development Office located at the ground floor of the Manila City Hall.
SUBMISSION OF BUSINESS TRANSACTION FORM AND REQUIREMENTS
The accomplished business transaction form together with the requirements shall be submitted to the Bureau of Permits (BP). The BP personnel shall encode the business transaction form details and the requirements for processing and computation of business permit fee. The BP personnel shall issue a computer generated Business Identification Number (BIN) slip to the applicant.
REQUIREMENTS FOR NEW BUSINESS
1. Barangay Clearance
2. DTI (Single Proprietor)
3. SEC Registration (Corporation)
4. Public Liability Insurance (for Restaurants, Cinemas, Malls, etc.)
5. Authorization Letter of owner with ID
6. Lease Contract / Tax Declaration
7. SSS (Certification / Clearance)
8. CTC (Community Tax Certificate-CEDULA)
COMPUTATION AND ASSESSMENT OF BUSINESS TAX AND REGULATORY FEES
The applicant shall proceed to the License Division of the City Treasurer's Office for computation and assessment of Business Tax and Regulatory Fees. The applicant shall present the issued Business Identification Number to a licensing officer on duty. The latter shall then compute and generate the License and Regulatory Fees Form which shall be given to the applicant.
PAYMENT
The applicant shall proceed to the cashier and shall present the issued License and Regulatory Fees (LRF) Form. The cashier shall receive and record the payment of the applicant and shall validate the LRF Form which will serve as the Official Receipt.
RELEASING OF BUSINESS PERMIT
The applicant shall go back to the Bureau of Permits office. After verifying the Official Receipt, a personnel will generate the Business Permit and it will be released to the applicant upon signing of the BP Director.
PROCESS FLOW FOR RENEWAL OF PERMITS 2009
STEP 1.
Submit requirements to the Bureau of Permits (BP) at the inner court and get claim slip;
Requirements :
Duly accomplished application for renewal of business permit (arbp) in two copies
Barangay business clearance for cy 2009
Mayor’s permit and official receipts for 2008.
SSS clearance
STEP 2.
Proceed to the Releasing Area at the City Treasurer’s Office, Administrative Division to claim the Statement Of Account (SOA) upon presentation of Claim Slip and Business Community Tax Certificate (CTC) for CY 2009.
STEP 3.
Present Statement Of Account (SOA) to the teller for business taxes at the Taxpayer’s Center, pay the amount indicated and get the Official Receipt.
STEP 4.
Present the official receipt to bureau of permits and claim your business permit and business plate /sticker.
FOR ANY QUESTIONS OR INQUIRIES:
PLEASE CALL THE BUREAU OF PERMITS OFFICE AT:
(+63)(02) 527-0871 , 527-0959 , 524-3294
