Mr. Crisostomo A. Dario, Jr.

May 27, 1992 Mr. Crisostomo A. Dario, Jr. Sunico, Malabanan & Associates Second Floor, Natividad II Bldg., Soria Street, Legaspi Village, Makati, Metro Manila S i r : This refers to you letter of May 21, 1992 requesting opinion whether or not a foreigner who: (1) is not a resident of the Philippines; and (2) does not possess an alien certificate of registration and multiple-entry visa can be allowed to occupy the position of "president" of a foreign-owned domestic corporation, given the following by-law provision: "The President shall be the Chief Executive Officer of the Corporation. In addition to such duties as may be delegated to him by the Board of Directors, he shall preside at all meetings of the Board, and shall act as temporary Chairman at, and call to order, all meetings of the stockholders of the Corporation in case of absence of the Chairman. He shall have general supervision of the business affairs and property of the Corporation and over its several Officers and employees. He shall execute all resolutions of the Board. The President shall submit to the Board as soon as possible at each annual meeting a complete report of the operations of the Corporation for the preceding year, and the state of its affairs, and he shall, from time to time, report to the Board, all matters within his knowledge which the interests of the Corporation may require to be brought to its notice. He shall do and perform such other duties from time to time as may be assigned to him by the Board of Directors." Other than CA No. 108, as amended by PD 715, otherwise known as Anti-Dummy Law, there is no law prohibiting non-resident stockholders to be elected as president of domestic corporations. As stated in our previous opinion dated May 27, 1991 addressed to Atty. Jose Ma. Nieto, a requirement or qualification that the president must be a resident of the Philippines is not mandatory taking into consideration that with the present modern and advanced communication and transportation facilities, a continuous stay in the business area is not necessary in the management of corporate business. It should also be noted in this connection that the present Government policy on investments is aimed at encouraging foreign investments which would bring about significant improvement to the nation and its people. The present Government acknowledges that foreign capital has a role to play in the development of Philippine economy; that it is the task of the government to determine this role and provide the much needed climate for their entry and growth. In line with this policy, a need to adopt more liberal statutes and policies seems to emerge to encourage foreign investors. In view of the foregoing, we answer your query in the affirmative. However, it has to be emphasized that in firms engaged in wholly or partially nationalized business activities , foreigners, regardless of whether they are resident or non-resident, are banned from being elected or appointed to management positions as President, Vice-President, Treasurer, Auditor, etc. thereof pursuant to the ruling of the Department of Justice Re: Opinion No. 37, Series of 1976, although they can be elected directors in proportion to their allowable participation or share in the capital of such activities in accordance with the Anti-Dummy Law, as amended by Presidential Decree No. 715. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman