Hon. Roberto De Ocampo

June 3, 1996 Hon. Roberto De Ocampo Department of Finance DPF Bldg.,Valencia Circle, Ermita Manila S i r : This refers to the fax letter from your office dated May 29, 1996 in relation to the letter of Mr. Adrian Matadeen of Bjork Matadeen Financial Services Ltd. dated April 25, 1996 addressed to you, inquiring whether the SEC gives a license to a foreign company engaged in financial planning services to operate in the Philippines. Under the Corporation Code, a foreign corporation desiring to operate as a " branch office " in the Philippines is required, as a general rule, to secure a license pursuant to Section 123 of the Corporation Code which provides: "SECTION 123. Definition and rights of foreign corporations . For the purposes of this Code, a foreign corporation is one formed, organized or existing under any law, other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or state. It shall have the right to transact business in the Philippines after it shall have obtained a license to transact business in this country in accordance with this Code and certificate of authority from the appropriate government agency." (Emphasis supplied) Should a foreign firm desire to organize as a " domestic corporation " instead as a mere " branch office ", it shall be registered as such by filing with the SEC the Articles of Incorporation of the proposed domestic corporation executed in accordance with Section 14 of the Corporation Code, quoted in part hereunder: "SECTION 14. Contents of articles of incorporation . All corporations organized under this Code shall file with the Securities and Exchange Commission articles of incorporation in any of the official languages, duly signed and acknowledged by all of the incorporators, containing substantially the following matters except as otherwise prescribed by this Code or by special law: ..." (Emphasis supplied) Section 129 of the Corporation Code further provides: "SECTION 129. Law applicable . Any foreign corporation lawfully doing business in the Philippines shall be bound by all laws, rules and regulations applicable to domestic corporations of the same class ,save and except such only as provided for the creation, formation, organization or dissolution of corporations or such as fix the relations, liabilities, responsibilities, or duties of stockholders, members, or officers of corporations to each other or to the corporation." (Emphasis supplied) On the basis of the letter of Bjork Matadeen Financial Services Ltd. attached to your letter, we cannot categorically determine as to whether or not the company can be issued a Philippine license since the business scheme or mode of operation of its business is not clearly disclosed in the letter. Take note that the business term "financial planning services" described in the letter is a very broad term which may cover the following special types of business activities: " trust business " contemplated under RA 337, as amended, otherwise known as the General Banking Act; " investment adviser/manager " of an investment company under RA 2629 otherwise known as the Investment Company Act; or " investment house " under PD 129, otherwise known as the Investment Houses Law. The operations of the above mentioned special type of business activities require the issuance of secondary licenses and are subject to the requirements prescribed under the special law covering the same and rules and regulations issued by the Bangko Sentral and/or SEC. Very truly yours, (SGD.) PERFECTO R. YASAY, JR. Acting Chairman