Mr. Bernard Go

June 1, 1999 Mr. Bernard Go 651 Nuqua St. Galaxy Bldg. Binondo, Manila S i r : This refers to your letter dated May 10, 1999 inquiring whether or not a native born resident alien can validly become an incorporator/stockholder/ director of a domestic corporation engaged in the business of operating a fine dining restaurant, and if in the negative, can such corporation employ a native-born resident alien to the position of an operation manager exercising supervisory powers, or as an order taker, or as a head accountant or assistant head accountant. llcd Republic Act No. 1180, otherwise known as the Retail Trade Nationalization Law, 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 above provision that foreign ownership is not allowed in retail trade business. The above-cited prohibition does not qualify or make a distinction. It is well-settled in statutory construction that where the law does not qualify, we should not distinguish or qualify. Therefore, a non-Filipino, regardless of whether he is a natural born or naturalized, resident or non-resident, is disqualified from holding shares of stock in a corporation engaged in "retail business". Accordingly, inasmuch as under said Law restaurant business is considered a retail business, your query is answered in the negative. However, an exception is allowed under Section 4 paragraph (d) thereof. Said provision explicitly excludes from the coverage of retail business "a hotel-owner or keeper operating a restaurant, irrespective of the amount of capital, provided that the restaurant is necessarily included in, or incidental to, the hotel business ." Relative to your second query, in firms engaged in wholly or partially nationalized business activities, foreigners, regardless of whether they are resident or non-resident, are barred from being elected or appointed to management positions pursuant to Section 2-A of Commonwealth Act No. 108, otherwise known as the Anti-Dummy Law, as amended by PD 715 and the ruling of the Department of Justice Re: Opinion No. 37, Series of 1976. The prohibition extends to employees or laborers who intervene in the management, operation, administration or control thereof as can be gleaned from the following provision of Act. "...to intervene in the management operation administration or control thereof whether as an officer employee or laborer therein with or without remuneration except technical personnel whose employment may be specifically authorized by the Secretary of Justice ...(Emphasis supplied) However, take note that the above prohibition provides for an exception in cases of technical personnel whose employment may be specifically authorized by the Secretary of Justice. LibLex Please be advised accordingly. Very truly yours, (SGD.) ROSALINDA U. CASIGURAN Associate Commissioner