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8179 : REPUBLIC ACTS - PHILIPPINE LAWS STATUTES and CODES

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REPUBLIC ACTS

REPUBLIC ACT NO. 8179

REPUBLIC ACT NO. 8179 - AN ACT TO

FURTHER LIBERALIZE FOREIGN
INVESTMENTS, AMENDING FOR THE
PURPOSE REPUBLIC ACT NO. 7042, AND FOR
OTHER PURPOSES

Section 1. Sec. 3, paragraph (a), of Republic Act

No. 7042, otherwise known as the "Foreign
Investments Act of 1991," is hereby amended
to read as follows:

REPUBLIC ACT NOS.

"Sec. 3. Definitions. – as used in this Act:
8101 - 8200

a) the term Philippine national shall mean a

citizen of the Philippines; or a domestic
Republic Act No.
partnership or association wholly owned by
8101
citizens of the Philippines; or a corporation

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organized under the laws of the Philippines of

Republic Act No. which at least sixty percent (60%) of the capital
8102 stock outstanding and entitled to vote is owned
and held by citizens of the Philippines; or a
Republic Act No. corporation organized abroad and registered as
8103 doing business in the Philippines under the
Corporation Code of which one hundred percent
Republic Act No. (100%) of the capital stock outstanding and
8104 entitled to vote is wholly owned by Filipinos or a
trustee of funds for pension or other employee
Republic Act No. retirement or separation benefits, where the
8105 trustee is a Philippine national and at least sixty
percent (60%) of the fund will accrue to the
Republic Act No. benefit of Philippine nationals: provided, that
8106 where a corporation and its non-Filipino
stockholders own stocks in a Securities and
Republic Act No. Exchange Commission (SEC) registered
8107 enterprise, at least sixty percent (60%) of the
capital stock outstanding and entitled to vote of
Republic Act No. each of both corporations must be owned and
8108 held by citizens of the Philippines and at least
sixty percent (60%) of the members of the Board
Republic Act No. of Directors, in order that the corporation shall be
8109 considered a Philippine national."

Republic Act No. Sec. 2. Sec. 7 of Republic Act No. 7042 is hereby
8110 amended to read as follows:

Republic Act No. "Sec. 7. Foreign Investments in Domestic Market

8111 Enterprises. – Non-Philippine nationals may own
up to one hundred percent (100%) of domestic
Republic Act No. market enterprises unless foreign ownership
8112 therein is prohibited or limited by the Constitution
and existing law or the Foreign Investment
Republic Act No. Negative List under Sec. 8 hereof."
8113
Sec. 3. Sec. 8 of the Foreign Investments Act of
Republic Act No. 1991 is hereby amended to read as follows:
8114
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"Sec. 8. List of Investment Areas Reserved to

Republic Act No. Philippine Nationals (Foreign Investment Negative
8115 List). – The Foreign Investment Negative List
shall have two (2) component lists: A and B:
Republic Act No.
8116 "a) List A shall enumerate the areas of activities
reserved to Philippine nationals by mandate of
Republic Act No. the Constitution and specific laws.
8117
"b) List B shall contain the areas of activities and
Republic Act No. enterprises regulated pursuant to law:
8118
"1) which are defense-related activities, requiring
Republic Act No. prior clearance and authorization from
8119 Department of National Defense (DND) to engage
in such activity, such as the manufacture, repair,
Republic Act No. storage and/or distribution of firearms,
8120 ammunition, lethal weapons, military ordinances,
explosives, pyrotechnics and similar materials,
Republic Act No. unless such manufacturing on repair activity is
8121 specifically authorized, with a substantial export
component, to a non-Philippine national by the
Republic Act No. Secretary of National Defense; or
8122
"2) which have implications on public health and
Republic Act No. morals, such as the manufacture and distribution
8123 of dangerous drugs, all forms of gambling,
nightclubs, bars, beer houses, dance halls, sauna
Republic Act No. and steam bathhouses and massage clinics.
8124
"Small and medium-sized domestic market
Republic Act No. enterprises with paid-in equity capital less than
8125 the equivalent of Two hundred thousand US
dollars (US$200,000.00), are reserved to
Republic Act No. Philippine nationals: provided, that if (1) they
8126 involve advanced technology, or (2) they employ
at least fifty (50) direct employees, then a
Republic Act No. minimum paid-in capital of One hundred
8127 thousand US dollars (US$100,000.00) shall be
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allowed to non-Philippine nationals.

Republic Act No.
8128 "Amendments to List B may be made upon
recommendation of the Secretary of National
Republic Act No. Defense, or the Secretary of Health, or the
8129 Secretary of Education, Culture and Sports,
indorsed by the NEDA, or upon recommendation
Republic Act No. motu propio, of NEDA, approved by the President,
8130 and promulgated by a Presidential Proclamation.

Republic Act No. "The Transitory Foreign Investment Negative List

8131 established in Section 15 hereof shall be replaced
at the end of the transitory period by the first
Republic Act No. Regular Negative List to be formulated and
8132 recommended by NEDA, following the process
and criteria, provided in Sections 8 and 9 of this
Republic Act No. Act. The first Regular Negative Lists shall be
8133 published not later than sixty (60) days before
the end of the transitory period provided in said
Republic Act No. section and shall become immediately effective at
8134 the end of the transitory period. Subsequent
Foreign Investment Negative Lists shall become
Republic Act No. effective fifteen (15) days after publication in a
8135 newspaper of general circulation in the
Philippines: provided, however, that each Foreign
Republic Act No. Investment Negative List shall be prospective in
8136 operation and shall in no way affect foreign
investment existing on the date of its publication.
Republic Act No.
8137 "Amendments to List B after promulgation and
publication of the first Regular Foreign
Republic Act No. Investment Negative List at the end of the
8138 transitory period shall not be made more often
than once every two (2) years."
Republic Act No.
8139 Sec. 4. The Foreign Investments Act is further
amended by inserting a new section designated
Republic Act No. as Sec. 9 to read as follows:
8140
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"Sec. 9. Investment Rights of Former Natural-

Republic Act No. born Filipinos. – For purposes of this Act, former
8141 natural born citizens of the Philippines shall have
the same investment rights of a Philippine citizen
Republic Act No. in Cooperatives under Republic Act No. 6938.
8142 Rural Banks under Republic Act No. 7353, Thrift
Banks and Private Development Banks under
Republic Act No. Republic Act No. 7906, and Financing Companies
8143 under Republic Act No. 5980. These rights shall
not extend to activities reserved by the
Republic Act No. Constitution, including (1) the exercise of
8144 profession, (2) in defense related activities under
Sec. 8 (b) hereof, unless specifically authorized
Republic Act No. by the Secretary of National Defense, and (3)
8145 activities covered by Republic Act No. 1180
(Retail Trade Act), Republic Act No. 5487
Republic Act No. (Security Agency Act). Republic Act No. 7076
8146 (Small Scale Mining Act). Republic Act No. 3018,
as amended (Rice and Corn Industry Act), and
Republic Act No. P.D. 449 (Cockpits Operation and Management)."
8147
Sec. 5. The Foreign Investments Act is further
Republic Act No. amended by inserting a new section designated
8148 as Section 10 to read as follows:

Republic Act No. "Sec. 10. Other Rights of Natural Born Citizen
8149 Pursuant to the Provisions of Article XII, Sec. 8 of
the Constitution. – Any natural born citizen who
Republic Act No. has the legal capacity to enter into a contract
8150 under Philippine laws may be a transferee of a
private land up to a maximum area of five
Republic Act No. thousand (5,000) square meters in the case of
8151 urban land or three (3) hectares in the case of
rural land to be used by him for business or other
Republic Act No. purposes. In the case of married couples, one of
8152 them may avail of the privilege herein granted:
provided, that if both shall avail of the same, the
Republic Act No. total area acquired shall not exceed the maximum
8153 herein fixed.
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Republic Act No. "In case the transferee already owns urban or
8154 rural land for business or other purposes, he shall
still be entitled to be a transferee of additional
Republic Act No. urban or rural land for business or other purposes
8155 which when added to those already owned by him
shall not exceed the maximum areas herein
Republic Act No. authorized.
8156
"A transferee under this Act may acquire not
Republic Act No. more than two (2) lots which should be situated
8157 in different municipalities or cities anywhere in
the Philippines: provided, that the total land area
Republic Act No. thereof shall not exceed five thousand (5,000)
8158 hectares in the case of rural land for use by him
for business or other purposes. A transferee who
Republic Act No. has already acquired urban land shall be
8159 disqualified from acquiring rural land area and
vice versa."
Republic Act No.
8160 Sec. 6. The National Economic and Development
Authority, in consultation with the Board of
Republic Act No. Investments, the Department of Trade and
8161 Industry and Securities and Exchange
Commission, shall prepare and issue the
Republic Act No. necessary primer and other information campaign
8162 materials regarding the Foreign Investments Act
and the amendments introduced thereto, with
Republic Act No. copies of said materials furnished all the
8163 Philippine embassies, consulates and other
diplomatic offices abroad and disseminated to
Republic Act No. Filipino nationals, former natural-born Filipino
8164 citizens, and foreign investors, within sixty days
after the effectivity hereof.
Republic Act No.
8165 Sec. 7. The NEDA is hereby directed to make the
necessary amendments to the implementing rules
Republic Act No. and regulations of Republic Act No. 7042 in order
8166 to reflect the changes embodied in this Act.
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Republic Act No. Sec. 8. Sections 9 and 10 of Republic Act No.

8167 7042 and all references thereto in said law are
hereby repealed or modified accordingly. All other
Republic Act No. laws, rules and regulations and/or parts thereof
8168 inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.
Republic Act No.
8169 Sec. 9. If any part or section of this Act is
declared unconstitutional for any reason
Republic Act No. whatsoever, such declarant shall not in any way
8170 affect the other parts or sections of this Act.

Republic Act No. Sec. 10. This Act shall take effect fifteen (15)
8171 days after publication in two (2) newspapers of
general circulation in the Philippines.
Republic Act No.
8172
Approved: March 28, 1996

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