3:25 pm | Sunday, August 17th, 2014
AFP FILE PHOTO
MANILA, Philippines—In a bid to boost foreign direct investment in the retail and wholesale sector, a lawmaker is pushing for a bill allowing foreign investors to fully own retail businesses in the country.
Isabela fourth district representative Giorgidi Aggabao filed House Bill (HB) 4402 that seeks to amend Republic Act 8762 or the Retail Trade Liberalization Law by removing the capital requirement provision in the law that prohibits foreign investors to fully own retail businesses in the country.
Under HB 4402, foreign investors may be allowed to wholly own a retail business in the country with a paid up capital of $2.5 to $7.5 million.
Also, foreigners may wholly own enterprises specializing in high-end or luxury products with a paid-up capital of only $250,000 per store.
“It proposes to do away with these restrictions by removing the equipment and capitalization requirements in the Retail Trade Liberalization Law in order to provide a more attractive and favorable investment climate in the country,” Aggabao said.
HB 4402 also stipulates that foreign investors shall be required to maintain a full amount of their capital or the unsold amount of their capital in case any part of the capital is sold to a Filipino citizen or a local corporation when they cease operation in the country.
Under the proposed bill, foreign investors who will fail to maintain the prescribed capital in their retail businesses will be sanctioned by the Department of Trade and Industry and the Securities and Exchange Commission.
Foreign direct investment (FDI) in the field of retail and wholesale sector amounted only to one percent of the total FDI from 2000-2009, Aggabao claimed.
Currently, under Section 5 of RA 8762, businesses with paid-up capital of less than $2.5 million shall be reserved exclusively for Filipino citizens and corporations wholly owned by Filipinos.
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