Last Dec. 10, 2021, the President signed into law Republic Act 11595, otherwise known as “An Act amending Republic Act 8762 or the Retail Trade Liberalization Act of 2000 (RTLA), by lowering the paid-up capital requirement for foreign retail enterprises and other purposes.”
The new law lowers the requirement for foreign investors to engage in retail trade in the country by promulgating these amendments:
1. Lowering of the minimum paid-up capital requirement and investment per store requirement
The minimum paid-up capital was lowered from US$2,500,000 to P25,000,000 which, if converted, is around $500,000. For foreign retailers having more than one physical store, the law also decreased the minimum investment per store to P10,000,000 (around $200,000 if converted) from $250,000.
It also removed the Certification of Prequalification that was formerly issued by the Board of Investments (BOI).
2. Removal of public offering requirement
Retail enterprises with more than 80 percent of foreign ownership are no longer required to publicly offer 30 percent of their share in the Philippines.
3. Preferential use of Filipino labor and promotion of locally manufactured products
Before engaging the services of a foreign national, foreign investors should comply with the Labor Code on the determination of non-availability of a competent, able, and willing Filipino citizen. Foreign retailers are also encouraged to have a stock inventory of products that are made in the Philippines.
4. Change of regulatory agency
Partnerships, associations, and corporations are now under the regulation of the Securities and Exchange Commission instead of the Department of Trade and Industry (DTI). Nevertheless, the DTI remains to have authority over foreign retailers who have or will have sole proprietorship in the Philippines.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants