To attract more foreign investments, President Rodrigo Duterte has signed Republic Act No 11647 otherwise known as “Act Promoting Foreign Investments”.
Republic Act. 11647 is a consolidation of Senate Bill No. 1156 and House Bill No. 300 that was passed by Congress in December 2021. A copy of which is now available to the public.
The new law seeks to improve investment factors to attract, promote, and welcome foreign investment activities, which are expected to contribute to the country’s national industrialization and socio-economic development.
The new law has the following features:
- It reduces the list of investment areas reserved for Filipinos to just 1) defense-related businesses like the manufacture, repair, storage, and distribution of firearms, ammunition, and lethal weapons, and 2) small and micro domestic market enterprises with paid-up equity capital of less than $200,000 (the old law had a broader restriction – enterprises with paid-up equity capital of less than the equivalent $500,000).
- It allows foreigners 100% ownership of startups or startup enablers, enterprises involving advanced technology, enterprises where a majority of direct employees are Filipinos and there must be at least 15 such employees.
- Creates the Inter-Agency Investment Promotion Coordination Committee led by the Department of Trade and Industry which will craft plans to promote the Philippines as a foreign investment destination, maintain an online database of foreign investments and local enterprises that can be partnered up, help local governments attract foreign investments, and address concerns of foreign investors.
- Export enterprises involving foreign investors that fail to meet export ratio requirements will be ordered to reduce its domestic market sales to at most 40% of its total production, compared to at most 60% in the old law.