Mr. Leonardo M. Gavina

August 31, 1981 Mr. Leonardo M. Gavina c/o BFAR Regional Office Region I, Dagupan City Sir : This is to acknowledge receipt of your letter dated August 20, 1981, inquiring on the following: 1. Is an alien allowed to lease a foreshore land for residential purposes. cdlex 2. Can an alien (American) form a single proprietorship or partnership with Filipino citizen to engage in hotel and restaurant business. If so, what are the requirements to be complied with. In connection with your first query, please be advised that the issue raised therein falls within the competent jurisdiction of the Ministry of Agriculture and Natural Resources. We have indorsed your letter for appropriate action to said government agency in a first indorsement dated August 31, 1981, a copy of which is attached hereto for ready reference. While under R.A. No. 1180 alien individuals (including U.S. citizens whose rights under said law has been terminated by virtue of Article XVII, Sec. 11 of the 1973 Philippine Constitution), are not allowed to engage in "restaurant" business as the same is considered "retail" business under Section 4 of the same act; nevertheless, Presidential Decree No. 714 amending Section 4 of R.A. No. 1180, allows alien individuals to engage in restaurant business if the restaurant is necessarily included in or incidental to the hotel business operated by such alien. Consequently, an alien individual may engage only in hotel and restaurant business as a sole proprietor or as partner in a partnership under the condition specified by Presidential Decree No. 714. In case of a partnership, the alien capital contribution must be 30% of the total contribution and any percentage in excess of 30% must be approved by the Board of Investments pursuant to R. A. No. 5455. Enclosed herewith is a list of requirements for registration of a partnership with the Securities and Exchange Commission. Where foreign investment does not exceed 30% of the total capital contribution the following are to be submitted: 1. Proof of remittance of foreign exchange if foreign currency will be remitted in; 2. Proof that the Filipino partners have financial capability to invest the amount; 3. BOI form No. 504, duly accomplished in duplicate. Likewise, the articles of partnership must qualify its purposes so as to include the following proviso: "to cater only to its hotel customers and their guests." (SEC rules and regulations) Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner