Roco Bunag & Kapunan Law Offices

November 6, 1989 Roco Bunag & Kapunan Law Offices C/o Attys. Barbara Anne C. Migollos and Peter Dunnely A. Barot 4th Floor, A. Soriano Building 8776 Paseo de Roxas Makati, Metro Manila Sir/Madam: This refers to your letter dated June 20, 1989, requesting confirmation of your contention that a corporation 70% of the capital stock of which is owned by San Miguel Corporation (SMC) and 30% by a foreign entity, is qualified to acquire private lands in the Philippines. (SMC itself is 70% owned by Filipinos). In connection therewith, the Commission en Banc, in its meeting of November 2, 1989, resolved to adopt the method of determining corporate nationality on the basis of the opinion of the Department of Justice No. 18, s. 1989, dated January 19, 1989. The rule in the determination of citizenship of corporations with alien equity states as follows: "Shares belonging to corporations or partnerships at least 60% of the capital of which is owned by Filipino citizens shall be considered as of Philippine nationality, but if the percentage of Filipino ownership in the corporation or partnership is less than 60% only the number of shares corresponding to such percentage shall be counted as of Philippine nationality. Thus, if 100,000 shares are registered in the name of a corporation or partnership at least 60% of the capital stock or capital respectively, of which belong to Filipino citizens, all of the said shares shall be recorded as owned by Filipinos. But if less than 60% or, say, only 50% of the capital stock or capital of the corporation or partnerships, respectively belongs to Filipino citizens, only 50,000 shares shall be counted as owned by Filipinos and the other 50,000 shares shall be recorded as belonging to aliens." In the light of the foregoing, the Commission hereby confirms your view on the matter. cdlex Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman