An Act Amending R.A. No. 8762, Otherwise Known as the "Retail Trade Liberalization Act of 2000," by Lowering the Required Paid-up Capital for Foreign Retail Enterprises, and for Other Purposes

Case Overview and Summary

Summary of Republic Act No. 11595

Definition of Minimum Investment per Store (Section 1)
- Includes the value of gross assets, tangible or intangible, such as buildings, leaseholds, furniture, equipment, inventory, and common use investments and facilities.
- Investment for common use facilities shall be pro-rated among the number of stores being served.
- Paid-up capital may be used to purchase assets for complying with the investment requirement per store.

Foreign Equity Participation (Section 2)
- Foreign retailers must register with the Securities and Exchange Commission (SEC) or the Department of Trade and Industry (DTI).
- Conditions for foreign retailers:
    - Minimum paid-up capital of Twenty-five million pesos (P25,000,000.00). (Section 5(a))
    - The foreign retailer's country of origin does not prohibit the entry of Filipino retailers. (Section 5(b))
    - For multiple physical stores, minimum investment per store must be at least Ten million pesos (P10,000,000.00), except for existing foreign retailers not previously required to comply. (Section 5(c))
- Foreign retailers must maintain the paid-up capital of Twenty-five million pesos (P25,000,000.00) in the Philippines at all times, unless they notify the SEC or DTI of their intention to cease operations. (Section 5)
- Failure to maintain the paid-up capital before notification will subject the foreign retailer to penalties or restrictions. (Section 5)
- Foreign retailers must submit certification from the Bangko Sentral ng Pilipinas (BSP) of the inward remittance of their capital investment or proof of deposit in a Philippine bank. (Section 5)

Review of Minimum Paid-up Capital Requirement (Section 3)
- The DTI, SEC, and the National Economic and Development Authority (NEDA) shall review the required minimum paid-up capital every three (3) years from the effectivity of this Act.
- The DTI, SEC, and NEDA shall each report its recommendation to Congress.

Labor Policy (Section 4)
- Employment of foreign nationals by foreign retailers shall comply with the Labor Code provisions on determining the non-availability of competent, able, and willing Filipino citizens before engaging foreign nationals, with due regard to the State policy of promoting the preferential use of Filipino labor. (Section 7)

Promotion of Locally Manufactured Products (Section 6)
- Foreign retailers are encouraged to have a stock inventory of products made in the Philippines. (Section 8)

Implementing Agencies and Rules and Regulations (Section 8)
- The SEC is responsible for monitoring and regulating foreign retailers that are partnerships, associations, and corporations.
- The DTI is responsible for monitoring and regulating foreign retailers that are single proprietorships.
- Both agencies shall keep a record of foreign retailers registered with them.
- Within ninety (90) days after the approval of this Act, the DTI, in coordination with the SEC and NEDA, shall formulate and issue the implementing rules and regulations. (Section 10)

Penalties (Section 9)
- Violation of any provision of this Act shall be punishable by imprisonment of not less than four (4) years to six (6) years and a fine of not less than One million pesos (P1,000,000.00) but not more than Five million pesos (P5,000,000.00). (Section 11)
- For partnerships, associations, or corporations, the penalty shall be imposed upon partners, president, directors, general manager, and other responsible officers. (Section 11)
- If the offender is not a citizen of the Philippines, he or she shall be deported immediately after service of sentence. (Section 11)
- If the Filipino offender is a public officer or employee, he or she shall, in addition to the penalty, suffer dismissal and permanent disqualification from public office. (Section 11)