Mr. Narain Issardas

August 18, 1989 Mr. Narain Issardas I. N. Enterprises 552 P. Gomez Street Quiapo, Manila Sir : This refers to your letter requesting clarification on the following queries: 1. Is an alien who has been residing permanently in the Philippines for 14 years allowed to invest in a corporation engaged in Retail Trade practices within the prescribed ratio of 60% Filipino-40% Foreigners? 2. Is an alien allowed to invest in a corporation engaged in real estate business activities also within the prescribed ratio of 60% Filipino and 40% Foreigners? Under Section 1 of RA 1180, otherwise known as the Retail Trade Nationalization Law, as amended by PD 714, corporations whose capital are not wholly owned by citizens of the Philippines are barred from engaging directly or indirectly in retail business. The law provides thus: "SECTION 1. No person who is not a citizen of the Philippines, and no association, partnership, or corporation the capital of which is not wholly owned by citizens of the Philippines , shall engage directly or indirectly in the retail business . . .. (emphasis supplied). Our answer to your first query is therefore in the negative. Relative to your second query, the Department of Justice has had occasion to rule that "real estate business" is considered a partly nationalized business, foreign equity participation of which, under the Philippine Constitution, is limited to 40% (Department of Justice Opinion, No. 84, S. 1988). In view thereof, foreigners may invest up to forty (40%) percent of the total outstanding capital stock of a corporation engaged in real estate business. llcd Please be advised accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Director Corporate and Legal Department