Alampay, Alvero & Alampay

November 7, 1985 Alampay, Alvero & Alampay c/o Atty. Eliseo B. Alampay, Jr. Ground Flr.,Salcedo Mansion Tordesillas St.,Salcedo Vill. Makati, Metro Manila Gentlemen: This refers to your letter dated August 28, 1985 requesting for an opinion on whether or not the International Irrigation Management Institute (IIMI), a corporate entity created under Act No. 6 of 1985 of the Parliament of the Democratic Socialist Republic of Sri Lanka, is exempted from securing a license to transact business in the Philippines under Section 125 of the Corporation Code of the Philippines. cdll It appears therein that earlier this year, the Philippine Government entered into a Technical Assistance Agreement (TAA) with IIMI to carry out a study into ways of adopting irrigation management for the purpose of crop diversification in the Philippines. The results of this study will also be used to support the second phase of a bank-assisted (ADB) regional study on food demand and supply and related strategies (T.A. No. 5160) being implemented by the International Food Policy Research Institute (IFPRI) in collaboration with the International Rice Research Institute. The said agreement was signed by the Honorable Prime Minister, Cesar Virata, on behalf of the government of the Republic of the Philippines. In line with its undertaking and obligations under the TTA, and limited to discharging the same, IIMI has established and is now maintaining a local liaison office at the 4th Floor, NIA Building, EDSA, Diliman, Quezon City under the management of a project coordinator, Mr. Alfredo Valera. Other than such activities, IIMI shall not engage in any venture/ activity/involvement whatsoever for profit or commercial gain . Anent thereto, please be informed that under Section 123 of the Corporation Code of the Philippines, a foreign corporation shall have the right to transact business in the Philippines after it shall have obtained a license to do business in the country in accordance with the Code and a Certificate of Authority from the appropriate government agency. However, the Commission has previously ruled that a foreign corporation is deemed not doing business in the Philippines within the meaning of our statute and is consequently exempted from the license required under the Code if its commercial dealing is limited to a single or isolated transaction and indicates no elements of continuity to conduct business in that respect. Said ruling of the Commission is quoted hereunder: prcd "Where the corporation enters into a single agreement, or engages in some isolated business act or transaction within a particular state, with no intention to repeat the same or make such state a basis for the conduct of any part of its corporate business, such corporation cannot be said to be doing business or transacting business within the state within the meaning of the usual statutory provisions regulating the transaction of business by foreign corporations. (SEC Opinion dated February 23, 1983 addressed to Bharat Heavy Electrical Ltd. citing Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Philippines, Vol. 3, pp. 634-635, citing Pacific Micronesian Line, Inc. v. del Rosario, G.R. 7154, Oct. 23, 1954). It appearing that IIMI will not engage in any activity other than the execution of its undertakings and obligations under the Technical Assistance Agreement with the Philippine Government, the corporation is deemed not doing business in the Philippines. Hence, it does not have to apply for a license under Section 123 of the Corporation Code. It is understood, however, that IIMI will not engage in any other business or economic activity without securing prior authority from the Board of Investments and the corresponding license from the Securities and Exchange Commission. Attached herewith for your information is a xeroxed copy of the letter of the Board of Investments (BOI) dated October 9, 1985, advising this Commission that the above-mentioned proposed transaction is not subject to the registration requirements of P.D. 1789 otherwise known as the Omnibus Investments Code. Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman