LEGAL FRAMEWORK
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FOREIGN INVESTMENTS ACT
Republic Act No. 7042, as amended, otherwise known as the Foreign Investments Act of 1991 (FIA), primarily governs the participation of foreign nationals in economic and commercial activities in the Philippines. The FIA expresses the policy of the Philippine Government to attract, promote, and welcome productive investments from foreign individuals, partnerships, corporations, and governments, including their political subdivisions, in activities that significantly contribute to national industrialization and socioeconomic development to the extent that foreign investment is allowed in such activity by the Constitution and relevant laws.
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To encourage foreign investments, Philippine laws expressly recognize various rights of foreign investors in the Philippines, including the right to repatriation of investments, the right to remittance of earnings and freedom from expropriation (except for public use or in the interest of national welfare or defense, and upon payment of just compensation).
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CORPORATION CODE OF THE PHILIPPINES
The Corporation Code of the Philippines (Corporation Code) governs the establishment, powers and governance of corporations in the Philippines. It recognizes different classes of corporations, such as stock corporations, non-stock corporations and special corporations.
Among the matters which are covered by the Corporation Code are those relating to incorporation requirements, duties and qualifications of directors and officers, meetings, quorum and voting requirements, rights of stockholders and dissolution.
The Corporation Code also regulates certain aspects of the licensing and reporting requirements of foreign corporations doing business in the Philippines.
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CIVIL CODE OF THE PHILIPPINES
The Civil Code of the Philippines (Civil Code) governs the establishment and operations of partnerships in the Philippines, the rights and obligations of partners, governance and dissolution.
Commercial contracts and arrangements of corporations doing business in the Philippines will be subject to the Civil Code provisions on obligations, contracts and damages, and those that apply to special types of contracts such as sales, agency, lease and loan.
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SPECIAL LAWS
Special laws may apply to special types of corporations, such as public companies, corporations with secondary licenses, or those that engage in highly regulated business activities.
