Atty. Luis Q. U. Uranza, Jr

January 6, 1997 Atty. Luis Q. U. Uranza, Jr Luis Q.U. Uranza, Jr. & Associates Suite 309 Delta Building West Avenue, Quezon City Metro Manila, Philippines S i r : This refers to your letter dated December 20, 1996 inquiring whether the allowable 100% foreign ownership under the Foreign Investments Act (RA 7042, as amended by RA 8179) applies only to new corporations to be formed or to existing corporations to be acquired by foreigners. Specifically, your question is whether a foreigner can acquire 100% ownership of an existing Philippine corporation, which is presently a 60% Filipino-40% Japanese owned joint venture import-export trading company . Please be advised that the 100% foreign ownership privilege under the Foreign Investments Act can be availed of by both new and existing corporations. Accordingly, the above situation may be allowed subject to the following requirements: 1. Compliance of the required minimum paid-in equity capital of not less than the equivalent of two hundred thousand US dollars (US $200,000.00). 2. Deed of Assignment of existing Filipino stockholders (transferor) in favor of Foreign investors (transferee). 3. Trading business is limited to wholesale. 4. Application form under FIA duly accomplished. 5. Compliance with Section 38 of the Corporation Code in the event the present authorized capital stock of the corporation is insufficient to cover the required minimum paid-up capital of corporation with 100% foreign ownership 6. Proof of foreign inward remittance. 7. Treasurer must be a resident of the Philippines. 8. Majority of the Board of Directors must be residents of the Philippines. 9. Proof of residence of the incorporators and directors in the Philippines. Please be guided accordingly. Very truly yours, (SGD.) PERFECTO R. YASAY Chairman