CFA Law Offices

18 January 2008. Ford Philippines held its 2008 Convention at the Renaissance Hotel. Ford Philippines President Rick Baker enumerated the great strides the company has had in 2007, including being cited as the leader in both the Service Satisfaction Index and the Customer Satisfaction Index, by J.D. Power Asia Pacific 2007 Philippines Sales Satisfaction Index (SSI) Study, topping other heavyweights Honda and Toyota. Ford Philippines also saw a dramatic increase of 9% in vehicle sales in 2007.

The event was well attended with CFA Law client Dearborn Motors Co., Inc. dealerships getting the top honors in Vehicle Retail Sales.

From left: CFA Law’s Henry Co, Dearborn Motors Co., Inc. Chairman Francisco C. Eizmendi and Ford Philippines President Rick Baker.

The new law rationalizing the celebration of national holidays, which provides for movable holidays, took effect on 10 August 2007. Under Republic Act No. 9492, most holidays, except for those with religious significance, are moved to the nearest Monday.

The law also states that “in the event the holiday falls on a Wednesday, the holiday will be observed on the Monday of the week. If the holiday falls on a Sunday, the holiday will be observed on the Monday that follows”.

The law further provides that for movable holidays, the President shall issue a proclamation, at least six months prior to the holiday concerned, the specific date that shall be declared as a non-working day. For the Eidul Adha, it shall be celebrated as a regional holiday in the Autonomous Region in Muslim Mindanao (ARMM).

The following regular holidays and nationwide special holidays shall be observed in the Philippines:

On 13 August 2007, the Philippine Bureau of Immigration (BI) launched a new type of investor’s visa to attract foreign investments and sustain investors’ confidence in the country.

BI chief Marcelino Libanan released Memorandum Circular No. MCL-07-001 prescribing the guidelines for the issuance of the “pro-investment visa” to foreign businessmen.

Based on reports, the BI chief said the program would benefit senior officials and executives of multinational corporations who may now apply for visas that may be renewed up to a period of three years and which would automatically entitle them to multiple entry privileges.

An executive who avails of the program is initially granted a three-month stay upon arrival, which he may extend every six months up to a total of three years.

“Through this program, foreign executives of multinational firms operating here are assured of a fast, hassle-free and more convenient service from our immigration officers every time they visit or leave our country,” Libanan said.

He said a special window to receive and process applications for the pro-investment visa will be set up at the BI main office.

Aside from senior executives of multinational corporations, other classes of foreign investors and businessmen may avail themselves of the pro-investment visa, according to the guidelines spelled out in Libanan’s memo.

Among these are foreign traders endorsed by the Board of Investments, Philippine Retirement Authority, Philippine Chamber of Commerce and Industry, local business councils and the various foreign business chambers in the country.

Foreigners endorsed by these entities shall be entitled to landed visas valid for 30 days from their arrival.

Others who may avail themselves of the 30-day landed visa are athletes and delegates to sports competitions, conventions and exhibitions; delegates, organizers and sponsors of international conventions, symposia and conferences, and other foreigners to whom the BI chief may at his discretion issue the visa.

A basic fee of US$100 shall be charged applicants availing themselves of the multiple entry facility for multinational corporations while a US$50 fee shall be collected from other classes of business people applying for landed visas.

Doing business in the Philippines requires the registration of the business with the proper regulatory agencies.

Single proprietorships have to be registered with the Department of Trade and Industry, while Partnerships and Corporations have to be registered with the Philippine Securities and Exchange Commission (SEC).

We shall discuss the registration requirements for Corporations below.

Under Philippine law, new corporations should have a minimum of 5 stockholders and 5 directors (all of whom should also be shareholders of the Corporation). Majority of the directors should be residents of the Philippines.

Unless the corporation is engaged in a regulated industry, minimum paid-up capital is only PHP5,000 (or US$100). However, in practice, new corporations usually have an initial capital of PHP60,000 (or US$1,200). A local bank will have to be appointed where the initial funds of the Corporation shall be deposited prior to its registration.

The Corporation will also have to elect a President (who must be a director), a Treasurer, and a Corporate Secretary (who must be a citizen and resident of the Philippines).

Foreigners may own up to 40% of a Philippine corporation, except in specific industries regulated by law, such as retail trade, media, advertising, and other nationalized industries, which has a lower maximum allowable foreign ownership. Subject to the said exception, foreigners may own more than 40% of a Philippine corporation if it is engaged in an export enterprise where more than 60% of its products are exported out of the Philippines, or if the initial paid-up capital of the Philippine Corporation is at least US$200,000.

The Corporation is usually registered within 3 to 7 days upon submission of the complete documents with the SEC.

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