In the evolving landscape of Philippine philanthropy, many individuals with dual allegiance seek to give back to their roots by establishing non-stock, non-profit organizations. However, the intersection of citizenship laws and corporate regulations often raises a crucial question: Can a dual citizen legally serve as an incorporator of a Philippine foundation?
The short answer is yes, but the implementation is governed by specific provisions of the Revised Corporation Code and the Dual Citizenship Act.
1. The Legal Framework: Who Can Be an Incorporator?
Under Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines (RCC), the requirements for incorporators have been significantly liberalized.
- Number of Incorporators: Any person, partnership, association, or corporation, singly or jointly with others but not more than fifteen (15) in number, may organize a corporation.
- Residency vs. Citizenship: The RCC removed the previous requirement that a majority of incorporators must be residents of the Philippines. Furthermore, for most types of corporations, there is no general citizenship requirement for incorporators.
- Legal Age: Natural person incorporators must be of legal age.
The Impact of Dual Citizenship
Under Republic Act No. 9225 (the Citizenship Retention and Re-acquisition Act of 2003), natural-born Filipinos who become citizens of another country and subsequently retain or re-acquire their Philippine citizenship are deemed to have never lost their Philippine citizenship.
Legally, they enjoy full civil and political rights as Filipinos, including the right to own property and engage in business, subject to certain constitutional limitations.
2. Foundations and Nationalized Activities
While the RCC allows foreigners to be incorporators, foundations (non-stock, non-profit corporations) are subject to the Foreign Investment Negative List (FINL) if their activities fall under restricted categories.
- General Rule: If the foundation is purely for charitable, social welfare, or cultural purposes that do not involve "nationalized" activities (like mass media or professional practice), there is no citizenship restriction for the Board of Trustees or incorporators.
- The "Philippine National" Status: A dual citizen is considered a Philippine National. This is critical because if a foundation’s activities require 100% Filipino ownership/control, a dual citizen fulfills this requirement perfectly, whereas a purely foreign national would not.
3. Key Requirements for Incorporators
If you are a dual citizen looking to head a foundation, you must satisfy the following Securities and Exchange Commission (SEC) requirements:
| Requirement | Description |
|---|---|
| Tax Identification Number (TIN) | All incorporators, whether resident or non-resident, must have a Philippine TIN. |
| Proof of Identity | A valid Philippine Passport or a Recognition/Retention Certificate (from the Bureau of Immigration) is usually required to prove Filipino status. |
| Capacity to Contract | The individual must be a natural person (or a recognized legal entity) capable of entering into legal obligations. |
4. Distinguishing Incorporators from Trustees
It is important to distinguish between those who start the foundation and those who run it:
- Incorporators: The signatories to the Articles of Incorporation. Their role is primarily at the birth of the entity.
- Board of Trustees: The body that manages the foundation. The RCC requires that each trustee must own at least one share (for stock) or be a member (for non-stock) of the corporation.
- The Residency Requirement: While the incorporators don't need to be residents, the Corporate Secretary of a Philippine foundation must be a citizen and resident of the Philippines.
5. Potential Hurdles to Consider
- Anti-Dummy Law: While dual citizens are Filipinos, they must ensure they are not acting as "fronts" for foreign interests in activities strictly reserved for 100% Filipino citizens, though this is rarely an issue for standard charitable foundations.
- Bureau of Internal Revenue (BIR): To attain tax-exempt status (Donee Institution status), the BIR and the Philippine Council for NGO Certification (PCNC) look closely at the organizational structure. Having dual citizens is acceptable, but the foundation must demonstrate that its funds are utilized primarily within the Philippines for its declared purpose.
Summary for Dual Citizens
If you hold two passports and wish to be an incorporator of a Philippine foundation:
- You are legally permitted to do so under the Revised Corporation Code.
- You count as a Filipino toward any citizenship quotas (if applicable).
- You must secure a Philippine TIN before filing with the SEC.
- You should use your Philippine identity documents for the incorporation papers to streamline the process.
Would you like me to draft a checklist of the specific documents required by the SEC for registering a non-stock foundation?