An Act Promoting Foreign Investments, Amending Thereby Republic Act No. 7042 (Republic Act No. 11647)

SECTION 1. Section 2 of Republic Act No. 7042 (R.A. No. 7042), as amended by Republic Act No. 8179, otherwise known as the “Foreign Investments Act of 1991,” is hereby amended to read as follows: “Src. 2. Declaration of Policy. — Recognizing that increased capital and technology benefits the Philippines and that global and regional economies affect the Philippine economy, it is the policy of the State to attract, promote and welcome productive “(b) The term “investment” shall mean equity investments from foreign individuals, partnerships, participation in any enterprise organized or existing corporations, and governments, including their under the laws of the Philippines and duly recorded political subdivisions, in activities which significantly in the enterprise’s stock and transfer book, or any contribute to sustainable, inclusive, resilient, and nen equivalent registry of ownership; . innovative economic growth, productivity, global vee Reneesnes ee me competitiveness, employment creation, technological “(c) The term “foreign investment” shall mean advancement, and countrywide development to the an equity investment made by a non-Philippine extent that foreign investment is allowed in such national in the form of foreign exchange and/or other activity by the Constitution and relevant laws, and assets actually transferred to the Philippines and duly consistent with the protection of national security. registered with the Bangko Sentral ng Pilipinas; Foreign investments shall be encouraged in enterprises that significantly expand livelihood and “(d) xX X; employment opportunities for Filipinos; enhance economic value of agricultural products; promote the welfare of Filipino consumers; expand the scope, “e) XXX; quality and volume of exports and their access to foreign markets; and/or transfer relevant technologies “(f) x x x; in agriculture, industry and support services. Foreign investments shall be welcome as a supplement to “(g) KX X; Filipino capital and technology in those enterprises serving mainly the domestic market. “(h) The term “practice of profession” shall mean an activity or undertaking rendered and performed “The State shall promote accountability and by a registered and duly licensed professional or holder integrity in public office, as well as the promotion of a special temporary permit as defined in the scope and administration of efficient public service to entice of practice of a professional regulatory law; and foreign investments. “@) The term “pipeline transportation” shall “Foreign investments shall be conducted based mean the sector which includes transport of goods or on the principles of transparency, reciprocity, equity, materials through a pipeline such as crude, refined and economic cooperation. petroleum, natural gas, biofuels, and other chemically stable substance.” SEC. 3. Section 4 of R.A. No. 7042 is hereby amended to SEc. 2. Section 3 of R_A. No. 7042 is hereby further amended read as follows: to read as follows: “SEC. 4. Inter-Agency Investment Promotion “SEC. 3. Definitions. — As used in this Act: Coordination Committee. ~ There is hereby created. the “Inter-Agency Investment Promotion Coordination Committee”, hereinafter referred to as the“IIPCC’, So which shall be the body that will integrate all promotion and facilitation efforts to encourage foreign nationally recognized leading industry or business investments in the country. The Department of Trade. chambers, who shall be of known competence, probity, and Industry (DTI) shall act as the IIPCC’s lead integrity and.expertise in any of the fields of agency. The IIPCC shall be composed of the: investment, advertising, banking, finance management and law, with at least ten (10) years of “(a) Secretary of the DTI, to preside as outstanding management or leadership experience. Chairperson; “The Chairperson may from time to time, asa “(b) Secretary/Undersecretary of: the particular foreign investment may require, request Department of Finance (DOF) as Vice-Chairperson; the participation of other government departments and agencies or instrumentalities, local government - “c) One (1) representative from the DTI-Board units (LGUs), nongovernmental organizations (NGOs) of Investments (BOD; and local business chambers and enterprises. _ “(d) One (1) representative from the DTI- “The IIPCC shall coordinate and, when — Philippine Economic Zone Authority (PEZA); necessary, partner with and assist the Bases Conversion and Development Authority (BCDA), One (1) representative from the Authority of the Freeport Area of Bataan (AFAB), “(e) Clark Development Corporation (CDC), Subic Bay. Department of Foreign Affairs (DFA), Office of Metropolitan Authority (GBMA), Cagayan Economic the Undersecretary for Multilateral Affairs and International Economic Relations (OQUMAIER); Zone Authority (CEZA), John Hay Management Corporation (JHMC), Poro Point Management Corporation (PPMC), Zamboanga City Special “(f) One (1) representative from the National Economic Zone Authority (ACSEZA), PHIVIDEC Economic and Development Authority (NEDA); Industrial Authority (PIA), Aurora Pacific Economic Zone and Freeport Authority (APECO), Tourism “(g) One (1) representative from the Department Infrastructure and Enterprise Zone Authority (TIEZA) of Information and Communications Technology and all other similar existing authorities or that may (DICT); be created by law, in promoting foreign investments to the country: Provided, That this shall not include _ “th) One (1) representative from the Commission the administration, design, and grant of fiscal on Higher Education (CHED); incentives. “@) One (1) representative from the Technical “The BOI is designated as the secretariat of the Education and Skills Development Authority IIPCC, implementing its policies and resolutions.” (TESDA); and SkEc. 4. A new section of R.A. No. 7042, as amended, is “G) Four (4) representatives composed of one inserted as Section 4-A to read as follows: (1) representative each from the National Capital Region, Luzon, Visayas and Mindanao, to be chosen “SEC. 4-A. Powers and Functions of the from a list of nominees prepared and submitted by TIPCC. — “(a) To establish both a medium-and-long-term Foreign Investment Promotion and Marketing Plan SEC. 5. A new section of R.A. No. 7042, as amended, is (FIPMP), coordinating all existing investment inserted as Section 4-B to read as follows: development plans and programs under the BOI, PEZA, and various investment promotion agencies “SEC. 4-B. Development of the Foreign (IPAs), LGUs, and other agencies, as delineated in Investment Promotion and Marketing Plan (FIPMP).

Section 4-B of this Act; ~ A comprehensive and strategic Foreign Investment Promotion and Marketing Plan (FIPMP) shall be “(b) To design a comprehensive marketing developed by the IIPCC for the medium five-year and strategy and campaign, promoting the country as a the long-term ten-year plan: Provided, That itis based desirable investment area; on competitive advantages, natural resources, skill and educational development, traditional linkages, and international market potential, and it is fully “(c) To support inbound and outbound foreign consistent with the strategic investment priorities direct and trade missions for new international plan under Title XIII of the National Internal Revenue markets to explore the country as a possible location Code, as amended: Provided, further, That an online to do business; portal containing the FIPMP shall thereafter be uploatied, containing further details such as the “d) To encourage and support research and IIPCC’s procedure, contacts, schedules, among others. development in priority areas indicated by the FIPMP; ' “Said database should also include a directory ‘“e) To monitor actual performance against of local enterprises capable and willing to partner with measurable and timebound targets in the FIPMP, to potential foreign investors. The IIPCC shall consult include job generation; local chambers of commerce, sectoral, business groups, and other individual partners whenever foreign “@ Tosubmit annual evaluation and reports applicants seek partners, subcontractors, suppliers, to the President of the Philippines and the Congress and other local business counterparts. regarding the activities of the ITPCC; “Similarly, Department of Education (DepEd), “g) To establish and regularly update an CHED, TESDA, Department of Labor and online database including a directory of ready local Employment (DOLE), the Professional Regulation partners from priority sectors under the FIPMP, asa Commission (PRC), and other training agencies tool for promoting investments and business matching involved in education and skills development shall in local supply chains: and likewise direct curriculum and training efforts toward manpower requirements of the FIPMP. ‘) ‘ To support local government efforts to promote foreign direct investments, expedite “The ITPCC shall coordinate with the concerned compliance with national requirements and address government agencies to ensure their alignment with other safeguards and services requested by foreign the FIPMP. investors in their different localities involved with said foreign investments.” “DTI shall promulgate such rules and regulations necessary to implement this provision.” &

Sec. 6. Section 5 of R. A. No. 7042, as amended, is hereby Sec. 7. Section 6 of R. A. No. 7042, as amended, is hereby amended to read as follows: amended to read as follows: ae “SEC. 5. Registration of Investmenis of “SEC. 6. Foreign Investments in Export Non-Philippine Nationals. — Without need of prior Enterprises. ~ Foreign investment in export approval, anon-Philippine national, as that term is enterprises whose products and services do not fall defined in Section 3(a), and not otherwise disqualified within Lists A and B of the Foreign Investment by law may, upon registration with the Securities Negative List provided under Section 8 hereof is and Exchange Commission (SEC), or the DTI in the allowed up to one hundred percent (100%) ownership. case of single proprietorships, do business as defined in Section 3(d) of this Act or invest in a domestic “Export enterprises which are non-Philippine enterprise up to one hundred percent (100%) of its nationals shall register with BO] and submit the capital, unless participation of non-Philippine reports that may be required to ensure continuing nationals in the enterprise is prohibited or limited to compliance of the export enterprise with its export a smaller percentage by existing law and/or under requirement. BOI shall advise SEC or DTI, as the the provisions of this Act. The'SEC or the DTI, as the case may be, of any export enterprise that fails to case may be, shall not impose any limitations on the meet the export ratio requirement. The SEC or DTI extent of foreign ownership in an enterprise additional shall thereupon order the non-complying export to those provided in this Act: Provided, however, That enterprise to reduce its sales to the domestic market any enterprise seeking to avail of incentives under to not more than forty percent (40%) of its total the Omnibus Investment Code of 1987 must apply production; failure to comply with such SEC or DTI for registration with the BOI, which shall process order, without justifiable reason, shall subject the such application for registration in accordance with enterprise to cancellation of SEC or DTI registration, the criteria for evaluation prescribed in said Code: and/or the penalties provided in Section 14 hereof. Provided, finally, That a non-Philippine national intending to engage in the same line of business as “Export enterprises shall register and comply an existing joint venture, in which he or his majority with the export requirements in accordance with Title shareholder is a substantial partner, must disclose XIII of the National Internal Revenue Code (NIRC), the fact and the names and addresses of the partners as amended, for purposes of availing any tax incentive in the existing joint venture in his application for or benefit.” registration with SEC. During the transitory period as provided in Section 15 hereof, SEC shall disallow SEc. 8. Section 8 of R.A. No. 7042, as amended, is hereby registration of the applying non-Philippine national further amended to read as follows: if the existing joint venture enterprise, particularly ; the Filipino partners therein, can reasonably prove ’ they are capable to make the investment needed for “SEC. 8. List of Investment Areas Reserved to the domestic market.activities to be undertaken by Philippine Nationals (Foreign Investment Negative the competing applicant. Upon effectivity of this Act, List). — x x x SEC shall effect registration of any enterprise applying under this Act within fifteen (15) days upon “a) x KX submission of completed requirements.” “(b) xk xX xX ll 10 e “Labor Code of the Philippines” and other applicable “(1) which are defense-related activities, laws, rules and regulations issued by DOLE shall requiring prior clearance and authorization from prevail. oe Department of National Defense (DND) to engage in such activity, such as the manufacture, repair, “Amendments to List B may be made upon storage and/or distribution of firearms, ammunition, recommendation of the Secretary of National Defense, lethal weapons, military ordinance, explosives, or the Secretary of Health, endorsed by the NEDA, pyrotechnics and similar materials, unless such or upon recommendation motu proprio, of NEDA, manufacturing or repair activity is specifically approved by the President, and promulgated through authorized by the Secretary of National Defense; or the issuance of the Foreign Investment Negative List by Executive Order. “Q)K XX ee. xX xkxX “Except as otherwise provided under Republic Act No. 8762, otherwise known as the Retail Trade “Amendments to the Foreign Investment Liberalization Act of 2000 and other relevant laws, Negative List shall not be made more often than once micro and small domestic market enterprises with every two (2) years: Provided, That the NEDA, in paid-in equity capital less than the equivalent of Two consultation and cooperation with the BOL, DTI, SEC, hundred thousand US dollars (US$200,000.00), are DICT, IPAs and other pertinent government agencies, reserved to Philippine nationals: Provided, That if: shall, every two (2) years, (i) review the Foreign (1) they involve advanced technology as determined Investment Negative List, and (ii) submit to Congress by the Department of Science and Technology, or an analysis of foreign investment performance (2) they are endorsed as startup or startup enablers economic activities of the industries under the Foreign by the lead host agencies pursuant to Republic Act Investment Negative List and the reasons for the No. 11337, otherwise known as the Innovative Startup recommended amendments, if any: Provided, further, Act; or (3) a majority of their direct employees are That NEDA shall recommend to Congress Filipinos, but in no case shall the number.of Filipino investment-related matters requiring necessary employees be less than fifteen (15), then a minimum legislation.” paid-in capital of One hundred thousand US dollars (US$100,000.00) shall be allowed to non-Philippine nationals: Provided, further, That registered foreign Sec. 9. A new section of R.A. No. 7042, as amended, is enterprises employing foreign nationals and enjoying inserted as Section 16 to read as follows: fiscal incentives shall implement an understudy or skills development program to ensure the transfer of “SEC. 16. Review of Strategic Industries. — technology or skills to Filipinos. Compliance with this Upon the order of the President, the IIPCC, in ‘requirement shall be regularly monitored by the coordination with the National Security Council ‘DOLE. (NSC), and the NEDA, shall review foreign investments involving military-related industries, “Nothing in this Act shall operate as a cause cyber infrastructure, pipeline transportation, or such for termination of employees hired prior to the other activities which may threaten territorial effectivity of this Act. In all cases, the provisions of integrity and the safety, security and well-being of Presidential Decree No. 442, otherwise known as the Filipino citizens, when: 13 12 ® shall not apply to the practice of professions that are “(a) Made by a foreign government-controlled covered by specific laws and fall under the jurisdiction entity or state-owned enterprises except independent of various Professional Regulatory Boards (PRBs) or pension funds, sovereign wealth funds and multi- any other equivalent regulating body, or those subject national banks; or to reciprocity agreements with other countries. “(b) Located in geographical areas critical to “To the extent applicable, and provided that the national security. necessary licenses, work permits and visas are properly secured from the relevant government “Any recommendation to suspend, prohibit, or agencies, any occupation, employment or practice of otherwise limit a reviewed foreign investment under profession not covered by any special law or this section shall be transmitted to the Office of the reciprocity agreement as provided in the previous President for appropriate action.” paragraph shall be subject to the provisions of this Act.” SEc. 10. A new section of R.A. No. 7042, as amended, is inserted as Section 17 to read as follows: SEc. 12. The remaining sections in R.A. No. 7042, as amended, are hereby renumbered accordingly. “Sac. 17. Anti-Graft Practices in Foreign . Investment Promotions. — Public officials and SEC. 18. Appropriations. — For purposes of implementing employees involved in foreign investment promotions this Act, the amount of Fifty million pesos (P50,000,000.00) from. shall uphold the highest standards of public service, the Contingent Fund of the General Appropriations Act for the accountability, and integrity. Accordingly, any public current fiscal year is hereby appropriated and shall be released to official or employee involved in foreign investment the IIPCC. Thereafter, the amounts necessary to carry out this - promotions who shall commit any of the acts under Act shall be included in the General Appropriations Act (GAA).

Section 3 of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt SEC. 14. Implementing Rules and Regulations. — The Practices Act, shall, in addition to the penalties NEDA, in consultation with the DTI and the DOF, is hereby provided under Section 9(a) of the said Act, be directed to amend the existing rules and regulations necessary for punished by a fine of not less than Two million pesos the efficient implementation of this Act. (P2,000,000.00) but not more than Five million pesos (P5,000,000.00).” — Republic Act No. 7042, SEc. 15. Repealing Clause. as amended, is hereby amended. All laws, decrees, orders, SEC. 11. A new section of R.A. No. 7042, as amended, is rules and regulations or other issuances or parts thereof inserted as Section 18 to read as follows: inconsistent with the provisions of this Act are hereby repealed or modified accordingly. “SEc. 18. Non-Applicability. — This Act shall - not apply to banking and other financial institutions SEC. 16. Separability Clause. — If any portion or provision which are governed and regulated by Republic Act of this Act is declared unconstitutional, the remainder of this Act No. 8791, otherwise known as “The General Banking or any provision not affected thereby shall remain in force Law of 2000” and other laws under the supervision of and effect. the Bangko Sentral ng Pilipinas. Moreover, this Act 14 SEC. 17. Effectivity. — This Act shall take effect after fifteen (15) days following its publication in the Official Gazette or in a newspaper of general circulation in the Philippines. Approved, VICENTE C.SOTTOJI LORD President of the of Representatives I: This Act which is a consolidation of House Bill No. 300 and hy Senate Bill No, 1156 was passed by the House of Representatives and the Senate of the Philippines on December 7, 2021. AY , RODIGO ROA DUTERTE President of the Philippines oO a Office of the Presiient MALACAHANG RECORDS OFFICE | CERTIFIED COPY SEPSEIC OFr rE PETLTSPrares TTY. CORCEPTS PRRD 2016 - 020708 DIRECTOR fy :