Act Amending Investment Restrictions in Specific Laws Governing Adjustment, Lending, Financing companies, and Investment houses
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Act Amending Investment Restrictions in Specific Laws Governing Adjustment, Lending, Financing companies, and Investment houses
Republic Act No. 10881
July 17, 2016
Case Overview and Summary
Summary of Republic Act No. 10881Declaration of Policy (Section 1):
- Attract and promote foreign investments in activities that contribute to industrialization, socioeconomic development, and sustainable inclusive growth.
- Amend limitations on foreign investments or participation in certain activities listed in the Foreign Investment Negative List.
Definition of Investment (Section 2):
- Investment refers to equity participation in any enterprise organized or existing under Philippine laws and duly recorded in the Stock Transfer Book or its equivalent.
Lifting of Nationality Requirements (Section 3):
- Repeals the nationality requirements for:
- Adjustment companies (Presidential Decree No. 612)
- Investment houses (Presidential Decree No. 129)
- Lending companies (Republic Act No. 9474)
- Financing companies (Republic Act No. 8556)
Adjustment Companies (Section 4):
- Amends Section 332 of Presidential Decree No. 612 (The Insurance Code):
- No person, partnership, association, or corporation shall act as an adjuster without a license issued by the Commissioner.
Lending Companies (Section 5):
- Amends Section 6 of Republic Act No. 9474 (Lending Company Regulation Act of 2007):
- Lending companies may be owned up to 100% by foreign nationals.
- If the loan is secured by land, a lending company with more than 40% foreign ownership may bid, take part in the sale, avail of enforcement proceedings, take possession, and transfer rights to qualified Philippine nationals within 5 years from actual possession.
- Title to the land shall not be transferred to such lending companies.
- Investments of a lending company shall be in accordance with the Constitution.
Financing Companies (Section 6):
- Amends Section 6 of Republic Act No. 8556 (Financing Company Act of 1998):
- Financing companies may be owned up to 100% by foreign nationals.
- Minimum paid-up capital requirements:
- Metro Manila and first-class cities: ₱10,000,000
- Other cities: ₱5,000,000
- Municipalities: ₱2,500,000
- The Securities and Exchange Commission may adjust the minimum paid-up levels.
- Existing financing companies shall comply with the minimum capital requirement within 1 year.
- Where land is concerned, the financing company shall comply with the constitutional provision on foreign ownership of land.
Investment Houses (Section 7):
- Amends Section 5 of Presidential Decree No. 129 (The Investment Houses Law):
- Investment houses may be owned up to 100% by foreign nationals.
- Foreign nationals may become members of the board of directors to the extent of their equity participation.
Regulatory Powers of the Bangko Sentral ng Pilipinas (Section 8):
- The Bangko Sentral ng Pilipinas retains its powers and authorities over financing companies, lending companies, and investment houses pursuant to existing laws.
Separability Clause (Section 9):
- If any provision is declared invalid, the other provisions shall remain in full force and effect.
Repealing Clause (Section 10):
- All statutory laws, orders, issuances, rules, and regulations inconsistent with this Act are repealed or modified accordingly.
Effectivity (Section 11):
- This Act shall take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation.
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Act Amending Investment Restrictions in Specific Laws Governing Adjustment, Lending, Financing companies, and Investment houses
Republic Act No. 10881
•July 17, 2016
REPUBLIC ACT NO. 10881
AN ACT AMENDING INVESTMENT RESTRICTIONS IN SPECIFIC LAWS GOVERNING ADJUSTMENT COMPANIES, LENDING COMPANIES, FINANCING COMPANIES AND INVESTMENT HOUSES CITED IN THE FOREIGN INVESTMENT NEGATIVE LIST AND FOR OTHER PURPOSES
SECTION 1. Declaration of Policy. — It is the policy of the State to attract and promote investments from foreign individuals, partnerships, corporations and governments, including their political subdivisions, in activities that significantly contribute to industrialization, socioeconomic development and sustainable inclusive growth.
Given the country's development objectives and the need to increase investments to achieve these, amending the limitations on foreign investments or participation in certain activities listed in the Foreign Investment Negative List as provided for in specific laws, becomes necessary.
SECTION 2. Definition of Investment. — As used in this Act, investment shall refer to equity participation in any enterprise organized or existing under the laws of the Philippines and duly recorded in the Stock Transfer Book, or its equivalent, of the enterprise.
SECTION 3. Lifting of Nationality Requirements. — The nationality requirements for adjustment companies as provided in Presidential...
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