In order to successfully establish a sound and legal business in the Philippines, the foreign investor must comply with several foreign investment laws. The following provides an overview of the most important legislation on the subject.
The Omnibus Investments Code of 1987 (Executive Order No. 226) provides the general rules and regulations for foreign investments in the Philippines, with provision on grant of incentives in particular industries and sectors. The Foreign Investments Act of 1991 (Republic Act No. 7042, as amended by Republic Act No. 8179) provides the regulatory framework of foreign investments without incentives. Those providing incentives to foreign investments are: Bases Conversion and Development Act of 1992 (Republic Act No. 7227), which provides incentives to enterprises with plants and offices located within the Subic Bay Freeport Zone; Special Economic Zone Act of 1995 (Republic Act No. 7916), which provides incentives to enterprises which are located in the Special Economic Zones; and Export Development Act of 1994 (Republic Act No. 7844), which provides incentives to export industries.
Republic Act No. 7721 is a law liberalizing the entry and operations of foreign banks and financial institutions. The Investor's Lease Act (Republic Act No. 7652) allows foreign investors to lease private lands for a period of 50 years, which may be renewed for another 25 years. The Build-Operate-Transfer Act (Republic Act No. 7718 as amended) established various Public-Private Partnership schemes.
The following are agencies enforcing relevant to foreign investments regulation: (i) Board of Investments, for the enforcement of the Omnibus Investments Code, (ii) Securities and Exchange Commission, for the registration of corporations and partnerships, as well as the enforcement of securities regulation and the Foreign Investments Act, (iii) the Philippine Economic Zone Authority, for the enforcement of the Philippine Economic Zone Authority Law, (iv) the Subic Bay Metropolitan Authority, for the enforcement of the Bases Conversion and Development Act, (v) the Bases Conversion Development Authority, also for the enforcement of the Bases Conversion and Development Act, and (vi) Bureau of Internal Revenue, for the enforcement of the National Internal Revenue Code of 1997.