Mr. Ricarte R. Padilla

May 5, 1995 Mr. Ricarte R. Padilla Cardio-Vascular Catheter Medequip Corporation UG-1 Star Centrum Condominium, Sen. Gil Puyat cor. Malugay St. Makati, Metro Manila S i r : This refers to your letter of April 26, 1995 requesting opinion whether foreign nationals can invest in your company, a domestic corporation engaged in the business of selling, at wholesale and retail , of medical equipment and supplies, by way of buying out the interest or share holdings of some of the existing stockholders of the corporation. Republic Act 1180, otherwise known as the Retail Trade Nationalization Law, was passed to nationalize the retail trade business. Section 1 thereof provides: "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: . . . " It is clear from the aforecited provision that foreign ownership is not allowed in retail trade business. Ownership of shares in a corporation thru secondary transfer makes no difference when one originally acquires shares directly from the corporation. Accordingly, transfer of outstanding shares from Filipino stockholders to foreign nationals would constitute a violation of the Retail Trade Nationalization Law. llcd Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner