Attys. Leo G. Dominguez

June 13, 1996 Attys. Leo G. Dominguez and Felix T. Sy, Jr. Quisumbing Torres & Evangelista 11th Flr., Pacific Star Bldg., Makati Ave. cor. Sen. Gil Puyat Ave. Makati City Sirs : This refers to your letter dated June 10, 1996 requesting for a ruling that TMG International Pty. Ltd. (TMF), under the proposed consultancy service described therein, will not be deemed doing business in the Philippines, and therefore is not required to obtain a license from the SEC to do business in the Philippines. cdll As stated, TMG is an international consultant firm, specializing in railway transport and engineering, duly organized and existing under the laws of Australia. The Philippine Government, through the Philippine National Railways (PNR) , has requested TMG to perform " consultancy services " for the construction of Phase II of the Main Line South Revitalization Project which was awarded to John Holland Construction, the main contractor, using the funding made available by the Australian Aid Agency. TMG's objective under the consultancy services agreement with PNR is to assist the PNR in supervising the conduct and completion of the Project by the main contractor. It is your contention that TMG will not be deemed doing business in the Philippines as the proposed consultancy service will only be an " isolated transaction " as it has no plans to enter into any other commercial contracts in the Philippines other than the proposed consultancy service to the PNR. Therefore, it need not secure a license to do business in the Philippines. Please be advised that the Commission, on several occasions, has opined that where a foreign corporation enters into a single agreement or engages in an isolated business act or transaction within the Philippines with no intention to repeat the same, such corporation is not considered to be doing business or transacting business in the Philippines within the meaning of Section 123 of the Corporation Code. In such a case, the foreign corporation may apply for exemption from the licensing requirements under the Corporation Code. However, we regret to inform you that the above allowable exemption does not apply in the present case. Under the " Guidelines On The Hiring Of Foreign Consultants For Government Projects", dated May 5, 1987 , issued by the National Economic and Development Authority ( NEDA ) pursuant to Executive Order No. 164, foreign consultants for government projects are required to be licensed by the SEC as a pre-requisite to the awarding and/or approval of consultancy contracts involving foreign consultants. Accordingly, all foreign consultant firms of government projects, regardless of whether or not they are engaged in an isolated transaction , shall be required to secure a license from the Commission. Very truly yours, (SGD.) ELNORA E. ADVIENTO Director Corporate and Legal Department