Investment Opportunities in the Philippines

April 25, 2024
MA. CARLA P. MAPALO, AMBER SHAWN A. GAGAJENA, MA. ANDREA V. NAGUIT The Philippines has exhibited a strong and positive momentum in 2023 with the implementation of key legislative and regulatory measures in a bid to steer the economy to stability. These measures, primarily aimed at attracting foreign direct investments, played a pivotal role in engendering investor confidence by eliminating bureaucratic hurdles and streamlining regulatory complexities. Foreign Players in the Retail Trade Industry At the behest of the Philippine government, Republic Act (“RA”) No. 11595 was passed, which amended the Retail Trade Liberalisation Act (“RTLA”) and relaxed the basic requirements for a foreign retailer to engage in retail business in the Philippines. A foreign retailer refers to a foreign national, partnership, association, or corporation of which more than 40% of the capital stock outstanding and entitled to vote is owned and held by a foreign national, engaged in retail trade. Prior to the amendment of the RTLA, a foreign retailer may only engage in retail business if it has a minimum paid up capital of USD 2,500,000.00. With the amendment, the prescribed minimum paid up capital for retail trade enterprises with foreign equity has been lowered to PHP25,000,000.00 (approximately USD 500,000.00). For foreign retailers with more than one physical store, the amendment decreased the minimum investment per store from USD 250,000.00 to USD200,000.00. The amendment also removed certain pre-qualification requirements which foreign retailers must secure from the Board of Investments. Similarly, under the Foreign Investments Act (“FIA”), micro and small domestic market enterprises with paid-in equity capital of less than USD 200,000 are generally reserved for Filipinos and corporations...

Philippine Internet Transactions Act: An Overview

January 11, 2024
The rapid advancement of digitalization brought with it increased patronage for e-commerce. In April 2023, the Secretary of the Philippines’ Department of Trade and Industry (“DTI”) reported that the increase in online transactions globally resulted in 80% growth in suspected digital fraud attempts. Suffice to say that one of the pronounced effects of the rise of e-commerce is the consequent proliferation of e-commerce fraud. While the growth of e-commerce demonstrated its potential of transforming how businesses are conducted, it also highlighted the need for governments to put in place ethical, legal and regulatory frameworks to aid consumers and entrepreneurs in navigating this increasingly complex and evolving business landscape. In the Philippines, Republic Act (“R.A.”) No. 11967 or the Internet Transactions Act of 2023 (“ITA”) was recently signed into law with the objective of regulating commercial activities through the internet. The goal is to ensure that consumer rights and data privacy are protected, innovation is encouraged, fair advertising practices and competition are promoted, online transactions are secured, intellectual property rights are upheld, and product standards and safety are guaranteed. SCOPE OF THE LAW AND JURISDICTION OF REGULATORY ENTITY In terms of application, the ITA applies to all business-to-business (“B2B”) and business-to-consumer (“B2C”) internet transactions within the mandate of the DTI where at least one of the parties is situated in the Philippines. The ITA defines an “internet transaction” as the sale or lease of digital or non-digital goods and services over the internet. The ITA is extraterritorial in scope in that it encompasses all e-commerce participants including foreign retailers which avail of the Philippine market to the extent of establishing...