Government may ease foreign retail investors law
The Philippines government plans to lower the required minimum capital for foreign retail investors to $200,000.
If implemented, it would be a 92 per cent cut from the current requirement.
According to the law, a retail enterprise with paid-up capital of less than $2.5 million “shall be reserved exclusively for Filipino citizens and corporations wholly owned by Filipino citizens”.
Socioeconomic Planning Secretary Ernesto Pernia says that lowering the required capital would allow more foreign players to do business in the country. “The purpose is to make consumers happier.”
Liberalising the retail trade would be part of a shortened list of investment areas or activities reserved solely for Filipinos, set to be released by the government by year-end.
Pernia says the move will force local players to be internationally competitive.
The Philippines’ required minimum paid-up capital of $2.5 million is among the highest in Asean. In contrast, foreign-owned retailers can wholly own a store in Singapore without any required minimum capital, thanks to the country’s free enterprise economy, while in Thailand, foreign retailers need a minimum capital of only $598,000 to wholly own a store.
The Philippines government is mandated to release a new Foreign Investment Negative List every two years.
“It is being revised now,” says Pernia. “The final form will be more aggressive. It will be closer to Asean norms. It is still a long list, and I want it to be shortened drastically.”