Foreign Investments

The Filipino government is encoraging investment from foreign companies. For the most
part, export businesses can be 100% foreign owned. Some restrictions apply to domestically
oriented foreign owned business. Limitations are placed on companies wanting to do business
in the domestic market by the Constitution of the Philippines itself or by national laws (2).
Starting a business in the Philippines is fairly easy - the organization only has to set up a branch
office in the Philippines or set up a new subsidiary (2). The Filipino government offers a variety
of incentives for foreign investors including tax deductions for labor expenses, and exemtions
from taxes and duties on import materials such as capital goods and spare parts. All business is
conducted in English.

Restrictions are placed on the following industries:

A. No foreign onwership - 0%
1. Mass Media
2. Services involving the practice of a licensed profession, such as engineering,
medical and allied professions, law, etc.
3. Retail trade, such as the operations of department stores, supermarkets, and
restaurants, except in hotels
4. Cooperatives
5. Private security or watchmenís agencies
6. Small-scale mining
7. Rice and Corn, except where authorized by the National Food Authority (NFA)
8. Those listed in the Foreign Investments Negative List prepared by the National
Economic Development Authority

B. Up to 25% foreign ownership

1. Private recruitment agencies, whether for local or foreign employment

C. Up to 30% foreign ownership

1. Advertising

D. Up to 40% foreign ownership

1. Exploration, development, and utilization of natural resources. However in case
the corporation has a financial or technical assistance agreement with the
President, full foreign participation is allowed.
2. Ownership of private lands
3. Operation and management of public utilities
4. Educational institutions, except those owned by religious groups or mission
boards
5. Financing companies regulated by the Securities and Exchange Commission (SEC)
6. Banks, except those licensed by the Monetary Board to establish branches in the
Philippines