Aliens Doing Business in The Philippines

Many global readers of this website are expatriates, who have not yet reached the pensioner's age, or simply want to stay in the Philippines and do business here.

So far so good!

Like me, for instance, I didn't reach my retirement age yet, while running some businesses here in the Philippines. An agency (Translation and Documentation Services for the Philippines and Germany - and other countries) - i.e. I am also teaching German at the University of Southeastern Philippines here in Davao City.

Can a foreigner do business in the Philippines?

The Commercial Law of the Philippines (compiled by the AFA editorial staff and chaired by Aguedo F. Agbayani) says it very clearly in its 1994 edition: Chapter III: Authority to do business: NO ALIEN, AND NO FIRM, association, partnership, corporation or any form of business organisation formed, organized, chartered or existing under any laws other than those of the Philippines, or which is not not a Philippine national, or more than 40% of the outstanding capital of which is owned or controlled by aliens, shall do business or engage in any economic  activity in the Philippines or be registered, licensed, or permitted by the Securities and Exchange Commission or by any other bureau, office, agency, political subdivision ... of the government to do business ... without first securing a written certificate from the Board of investments to the effect:

1. That the operation or activity of such alien ... is not inconsistent with the investment priorities plans;

2. That such business ... will contribute to the sound and abalanced development of the national economy ... ;

3. That such business ... by the applicant would not conflict with the Constitution or other laws of the Philippines;

4. That the field of business ... by the applicant is not one that is being adequately exploited by Philippine nationals; and

5. That the entry of application therein will not pose a clear and present danger of promoting monopolies ... in restrain of trade.

Chapter II, Art. 59 says also very clearly, that an alien (a foreigner) has to check at first his immigration status. Of course, a tourist is never allowed to do any business in the Philippines.

Fact is: I am an expatriate with a 'permanent residence stay' in the Philippines as well as my wife, a natural born Filipina, but carrying a German passport the past 20 years. We can do business in the Philippines - but here we are: the permit has been issued to my brother-in-law, a Philippine national.

Don't misinterpret me, please: I am not talking about foreign corporation i.e. For the purpose of this code, a foreign corporation is formed, organized or existing under laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or state. Philippine law also sets the guidelines for investment requirements for foreign corporations under section 126 of the Philippine Corporation Code.

I am not a lawyer, but I came in touch with Philippine law during my time as coordinating editor of law magazines of a publish house based in Berlin and New York. Now I am working together with lawyers here in the Philippines. So please, ask YOUR lawyer, before you start any kind of business.

Very personal: many expatriates have been asking me (mostly by emails) during the last years: "Can your morals allow you to do that?" My answer is clear again: "Yes, why not? I can!" The problem is only, if you can't trust your Philippine spouse and/or her/his family. This seems to become a very big problem sometimes. Fortunately not for me... .