Mr. Manuel Fong, Sr.

November 8, 1984 Mr. Manuel Fong, Sr. c/o United Supermarkets Greenbelt Park, Makati Commercial Center, Makati Metro Manila Sir : This refers to your letter dated November 5, 1984, informing this Commission that certain foreign entities desire to invest in some Philippine companies. Hence, the following queries: 1. What is the percentage allowed for investments in existing corporations engaged in the manufacture of biscuit and baking products? What are the specific SEC regulations governing the implementation of such investment? 2. Is the SEC the only government entity that regulate and implement rules and regulations concerning all business corporations and partnerships? 3. What if foreigners would like to invest in an existing real estate corporation? What is the percentage of ownership allowed in such a corporation? Anent your first query, please be informed that under existing Philippine laws, the Board of Investments determines the area or line of business in which foreigners could invest. The Board determines whether or not the business is still open to foreign participation that it is not yet crowded or adequately exploited by Filipino citizens or corporations. However, if the total investment of non-Philippine nationals shall not exceed thirty (30%) per cent of the outstanding capital of that enterprise ,(unless existing law forbids any non-Philippine ownership in the enterprise or limits ownership by non-Philippine nationals to a percentage smaller than thirty (30%) per cent), prior authority from the Board of Investment is not required .In such a case, the Commission requires the submission of BOI Form 504 as well as proof of foreign remittance of any non-resident alien. Please be further advised that under Section 1 of R.A. 1180, otherwise known as the Retail Trade Nationalization Law, " No corporation the capital of which is not wholly owned by citizens of the Philippines shall engage directly or indirectly in retail business" . As regard your second query, the Securities and Exchange Commission shall have absolute jurisdiction, supervision and control over all corporations, partnerships or associations, who are grantees of primary franchises and/or a license or permit issued by the government to operate in the Philippines. (Sec. 3, P.D. 902-A, as amended). Corporations and partnerships may likewise be regulated by other government agencies depending on the type of business undertaken by the company. In response to your third query, quoted hereunder is the provision of Section 9, Article XIV of the New * Philippine Constitution: "The disposition, exploration, development, exploitation, or utilization of any of the natural resources of the Philippines shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens. cdll xxx xxx xxx" In view thereof, foreigners may invest up to forty (40%) per cent of the total outstanding capital stock of a corporation engaged in real estate business subject, however, to BOI approval. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner * Copied verbatim from documents obtained directly from the Securities and Exchange Commission .