X.

Special Laws
A. Tha Chattel Mortgage Law and Real Estate Mortgage Law Chattel Mortgage Law ( Act No. 1508) Chattel Mortgage- a contract by virtue of which personal property is recorded in the Chattel Mortgage Register as security for the performance of an obligation (Art. 2140,NCC). Characteristics of CM: 1. Accessory Contract- the purpose of which is to secure the performance of a pricipal obligation; 2. Formal Contract- registration in the Chattel Mortgage Register is indispensable; 3. Unilateral Contract- it produces only obligations on the part of the creditor to free the thing from the encumbrance upon fulfillment of the obligation.\ Essential Requisites: 1. It must be constituted to secure the fulfillment of a principal obligation (Art. 2085, NCC); General Rule: CM can cover only obligations existing at the constitution of mortgage. It cannot cover after incurred obligations. Exception: Promise expressed in a CM to cover debts yet to be contracted (future debts) may be binding BUT security itself arise only AFTER a CM agreement covering the newly contracted debt is executed by concluding a fresh CM or by amending the old contract conformably with the form prescribed by the Chattel Mortgage Law ( Acme Shoe Rubber and Plastic Corp. v. CA, G.R. No. L-56718, January 17, 1985). 2. Mortgage is absolute owner of the thing owned in common; 3. Mortgagor has free disposal of his property or he is legally authorized for the purpose; 4. The property must be personal property.

SUBJECT MATTER OF THE CHATTEL MORTGAGE 1. Shares of Stocks: Recorded at the principal office of business of the corporation and at the residence of the mortgagor 2. Interest in Business 3. Machinery treated by the parties as personal property

4. Vessels: It is essentially the mortgage accorded in the office of the Philippine Coast Guard of the port of documentation of the vessels. 5. Motor Vehicles: Recorded with the LTO where the vehicle is registered, the place where the property may be found and the residence of the owner thereof. 6. House of Mixed Materials 7. House Built on Rented Land: It does not form part of the land. It is treated merely as an object placedonly a land by one who had a temporary right to the same. 8. House of Strong Materials may be considered as personal property for purposes of executing a chattel mortgage as long as the parties to the contract so agrees and no innocent third party will be prejudiced.

LAWS GOVERNING CHATTEL MORTGAGE 1.Chattel Mortgage Law (Act No. 1508, as amended); 2.Civil Code; 3.Revised Administrative Code; and 4. Revised Penal Code.

OWNERSHIP OF THE MORTGAGED PROPERTY The accessory contract of chattel mortgage has no legal effect whatsoever where the mortgagor is not theabsolute owner of the property mortgaged, ownership of the mortgagor being an essential requirement of a valid mortgage contract. The manifestations of ownership are control and enjoyment over the thing owned.(Union vs. Court of Appeals, 361 SCRA 506) OFFENSES INVOLVING CHATTEL MORTGAGE 1. Knowingly removing any personal property mortgaged under Chattel Mortgage to any province or city other than the one in which it was located at the time of the execution of the mortgage without the written consent of the mortgagee; 2. Selling or pledging personal property already mortgaged, or any part thereof, under the terms of theChattel Mortgage Law without the consent of the mortgagee written on the bank

of the mortgage andduly recorded in the Chattel Mortgage Registry. (Article 319, Revised Penal Code) * The mortgagor is not relieved from criminal liability even if the mortgage indebtedness is thereafterpaid in full or the mortgagor-seller informed the purchaser that the thing sold had been mortgaged.* The sale is valid although no written consent was obtained from the mortgagee but the mortgagpr layshimself open to criminal prosecution.

DESCRIPTION OF THE OBJECT OF CHATTEL MORTGAGE Section 7 of the Chattel Mortgage Law does not demand a minute and specific description of every chattelmortgaged in the deed of mortgage, but it only requires that the description of the mortgaged property be suchas to enable the parties to the mortgage or any person to identify the same after a reasonable investigation and inquiry. A chattel mortgage shall be deemed to cover only the property described therein and not like or substitutedproperty thereafter acquired by the mortgagor and placed them in the same depositary as the property originally mortgaged, anything in the mortgage to the contrary notwithstanding. However, this does not apply to stores open to the public for retail business where the goods are constantly sold and substituted with new stock. CHATTEL MORTGAGE OF AFTER-ACQUIRED OBLIGATIONS A stipulation in the mortgage, extending its scope and effect to after-acquired property is valid and binding where the after-acquired property is valid and binding, where the afteracquired property is in renewal of, or insubstitution for, goods on hand when the mortgage was executed, or is purchased with the proceeds of the saleof such goods. CHATTEL MORTGAGE OF AFTER-INCURRED OBLIGATIONS A pledge, real estate mortgage or antichresis may exceptionally secure after-incurred obligations so long asthese future debts are accurately described. However, a chattel mortgage can only cover obligations existing atthe time the mortgage is constituted. Although a promise expressed in a chattel mortgage to include futuredebts can be binding that can be compelled upon, the security itself does not come into existence or arise untilafter a chattel mortgage agreement covering a newly contracted debt is executed either by concluding a fresh chattel mortgage or by amending the old contract conformably with eh form prescribed by the Chattel Mortgage Law.

EFFECTS OF REGISTRATION: 1. Creates a real right 2. Adds nothing to mortgage

AFFIDAVIT OF GOOD FAITH It is an oath in the contract of chattel mortgage wherein the parties severally swear that the mortgage is made for the purpose of securing the obligation specified in the conditions thereof and for no other purposes and that the same is just and valid obligations and not entered into for the purpose of fraud.This special affidavit is required only for the purpose of transforming an already valid mortgage into preferred mortgage. The absence of it vitiates a mortgage only as against third persons without notice like creditors and subsequent encumbrances. RIGHT OF REDEMPTION 1. When the condition of the chattel mortgage is broken, the following may redeem: a. Mortgagor: redemption from buyer is only the purchase price b. Person holding a subsequent mortgage. c. A subsequent attaching creditor 2. In attaching creditor whom so redeems shall be subrogated to the rights of the mortgage and entitled to foreclose the mortgage. 3. The redemption is made by paying or delivering to the mortgagee the amount due on such mortgage and the costs and expenses incurred by such breach of condition before the sale thereof.

** Where mortgagor has breached the chattel mortgage contract, the mortgagee acquires the right to possess the chattel starting from the date of said breach. (Northern vs. Herrera, 49 SCRA 392)

RIGHTS ACQUIRED BY SECOND MORTGAGEE AND SUBSEQUENT PURCHASER 1. Before payment of debt After a chattel mortgage is executed, there remains in the mortgagor a mere right of redemption and only this right passes to the second mortgagee in case of the second mortgage. As between the first and second mortgages, therefore, the latter can only recover the property from the former by paying him the mortgage debt. 2. After payment of debt If the only leviable or attachable interest of a chattel mortgagor in a mortgaged property is his right of redemption, it follows that the judgment or attaching creditor who purchased the property at the execution sale could not acquire anything except such right of redemption. He is entitled to actual possession and delivery without first paying the mortgage debt. RIGHTS OF MORTGAGEE TO POSSESSION 1. When default occurs and the creditor desires to foreclose, the right of the creditor to take the mortgage property is implied from the provision which gives him the right to sell.2.Where the debtor refuses to yield the property, the creditors remedy is to institute an action neither to effect judicial foreclosure directly or to secure possession as preliminary to the sale contemplated. a. The creditor cannot lawfully take the property by force against the will of the debtor because the creditors right of possession is conditioned upon the fact of default, and the existence of this fact may naturally be a controversy. b. Nor can the public officer, such as a sheriff, upon whom the law places the responsibility of conducting the sale, seize the property where the creditor could not, as it is manifest that such officer proceeding under the authority of Section 14 of Act No. 1508, becomes the mere agent of the creditor. (Bachrach Motors Co. vs Summers, 42 Phil 3) c .It is not required in case of such default and the mortgagor refuses upon demand to surrender possession of the mortgaged chattel, for the mortgagee before he can file an action for replevin or for judicial foreclosure, to first ask the sheriff to foreclose the mortgage or take possession of the property. d. Where the mortgagor plainly refuses to deliver the chattel subject of the mortgage upon his failure to pay two or more installments or if he conceals the chattel to a place beyond the reach of the mortgagor, it logically follows as a matter of common sense, that the necessary expenses incurred in the prosecution by the mortgagee of an action for replevin so that he can regain possession of the chattel should be borne by mortgagor. 3. Under Section 14, Rule 14 of the Rules of Court, a third party claimant to a property levied upon by a writ of attachment must make an affidavit showing that he has title thereto or right to

the possession thereof. This provision excludes a chattel mortgage because a chattel mortgage is merely a security for a loan and does not transfer title to the property mortgage and to the chattel mortgage. (Serra vs. Rodriguez, 56 SCRA 538) 4. Where the right of the plaintiff to the possession of the specific is so conceded or evident, the action need only be maintained against him who so possesses the property. 5. Neither is a chattel mortgagee entitled to the possession of the property upon the execution of the chattel mortgage for otherwise, the contract become a pledge and ceases to be a chattel mortgage. FORECLOSURE OF CHATTEL MORTGAGE -After payment of the debt or the performance of the condition specified in the Chattel Mortgage, the mortgageemust discharge the mortgage otherwise, he may be held liable for damages by any person entitled to redeemthe mortgage. Public Sale If the mortgagor defaults in the payment of the secured debt or otherwise fails to comply with the conditions of the mortgage, the creditor has no right to appropriate to himself the personal property because he is only permitted to recover his credit from the proceeds of the sale of the property at the public auction.

Private Sale There is nothing illegal, immoral or against public order in an agreement for theprivate sale of personal properties covered by the chattel mortgage. PERIOD TO FORECLOSE MORTGAGE 1. Chattel Mortgage The mortgagee may, after thirty (30) days from the time of the condition broken, cause the mortgage property to be sold at public auction by a public officer. 2. Real Estate Mortgage In case of judicial foreclosure, the grace period for the mortgagor to pay the amount is not less than 90 days but not more than 120 days from the entry of judgment on foreclosure. In default of such payment, the property shall be sold at public auction to satisfy judgment. (Section 2, Rule 68 of Rules of Court)

CIVIL ACTION TO RECOVER CREDIT 1. The mortgagee is not obligated to file an independent action for the enforcement of his credit. To do otherwise would defeat the purpose of the chattel mortgage, which is to give him preference over the mortgaged chattels for the satisfaction of his credit. (Northern Motors, Inc. vs. Coquia, supra) 2. A mortgagee who sues and obtains a personal judgment against a mortgagor upon his credit waives thereby his right to enforce the mortgage securing it. (Movido vs. Rehabilitation FinanceCorp., 105 Phil 886) RIGHT OF MORTGAGOR TO RECOVER DEFICIENCY 1. Where mortgage foreclosed The creditor may maintain an action for recovery although the Chattel Mortgage Law is silent on this point. The reason is that a chattel mortgage is only given as a security and not the payment of loan in case of non-payment. The action may be brought within ten (10) years from the time the cause of action accrues. 2. Where the mortgage constituted as security for purchase of personal property payable in installments. The vendor of the personal property is precluded from proceeding against the security put up by a third person for if the latter should be compelled to pay the balance of the purchase pride, he will, in turn, been titled to recover what he has paid from the debtor-vendee. 3. Where the mortgaged property subsequently attached and sold The chattel mortgagee is entitled to the deficiency judgment in an action fro specific performance where the mortgaged property is specifically attached and sold. The execution of the sale is not a foreclosure sale. (Industrial Finance Corp. vs. Ramirez, 232 SCRA 714) APPLICATION OF PROCEEDS OF SALE 1. Costs and expenses of keeping sale; 2. Payment of obligations secured by the mortgage; 3. Claims of persons holding subsequent mortgages in their order, and4.The balance, if any, shall be paid to the mortgagor, or person holding under him.

JUDICIAL FORECLOSURE OF MORTGAGE 1. File a suit for the purpose; 2. Court orders payment of mortgage debt within a period of not less than 90 days but notmore than 120 days from the entry of judgment; 3. If mortgagor fails to pay, the court shall order the sale in public auction; 4. Confirmation of Sale: by order of the court which operates to divest the rights of all parties to the action and to vest their rights to the buyer subject to the right of redemption before confirmation, the court retains control of the proceeding by exercising sound discretion whether to confirm or not; 5. Execution of judgment; 6. Application of Proceeds; and 7. Execution of Sheriffs certificate.

REAL ESTATE MORTGAGE LAW (Act No. 3135, as amended by R.A. No. 4118) Purpose: To regulate the sale of property under special powers inserted in or annexed to a real estate mortgage (REM), and redemption thereof. Applicability: 1. If a special power to extrajudicially foreclose the mortgage is inserted or attached to REM contract, Act No. 3135 applies. 2. If the REM contract is silent as to the manner of foreclosing the mortgage, Rule 68 of Rules of Court applies. Real Estate Mortgage A contract whereby the debtor secures to the creditor the fulfillment of a principal obligation, specially subjecting to such security immovable property or real rights over immovable property which obligation shall be satisfied with the proceeds of the sale of said property or rights in case the said obligation is not complied with at the time stipulated.

Foreclosure A remedy available to the mortgagee where he subjects the mortgaged property to the satisfaction of the obligation to secure for which the mortgage was given. Procedure for Extrajudicial Foreclosure of Sale of REM: 1. Filing of application for extrajudicial foreclosure with the Executive Judge through the Clerk of Court who is also the Ex-officio sheriff (A.M. No. 99-10-05-00). 2. Venue: place where each of the mortgaged property is located. 3. Publication and Posting of Notice 4. Public Auction Sale -It shall be made between 9:00AM and 4:00PM under the direction of the: a. Sheriff of the province; b. Municipality or auxiliary municipal judge of the municipality in which the sale has to be made; or c. Notary public of said municipality. 5. Certificate of Sale issued by the Clerk of Court must be approved by the Executive Judge or in his absence, the Vice Executive Judge. No certificate of sale shall be issued in favor of the highest bidder until all fees shall have been paid. 6. Filing of Certificate of Sale with the Register of Deeds who shall make a brief memorandum on the certificate of title. 7. After the redemption period has expired, the clerk of court shall archive the records. Rules on Recovery of Deficiency -Where the proceeds of the sale are insufficient to cover the debt in an extrajudicial foreclosure of mortgage, the mortgagee is entitled to claim the deficiency from the debtor. Redemption -A transaction by which the mortgagor requires or buys back the property which may have passed under the mortgage or divests the property of the lien which the mortgage may have created. Kinds of Redemption: 1. Equity of Redemption- right of the mortgagor in case of judicial foreclosure to recover the mortgaged property after his default in the performance of the conditions of the mortgage but before the confirmation of the sale of the mortgaged property.

2. Right of Redemption- right of the mortgagor on case of extrajudicial foreclosure to redeem the mortgaged property within a certain period after it was sold for the satisfaction of the mortgage debt.

B. Anti- Money Laundering Act (R.A. No. 9160, as amended by R.A. No. 9194) 1. Policy of the Law
To protect and preserve the integrity and confidentiality of bank accounts; To ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity; Consistent with its foreign policy, to extend cooperation in transactional investigations and prosecutions of persons involved in money laundering activities whenever committed. (Sec. 2, R.A. No. 9160)

2. Covered Institutions
1) banks, non-banks, quasi-banks, trust entities, and all other institutions and their subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas (BSP);

2) insurance companies and all other institutions supervised or regulated by the Insurance Commission; and 3) the following entities supervised or regulated by SEC: (i) securities dealers, brokers, salesmen, investment houses and other similar entities managing securities or rendering services as investment agent, advisor, or consultant, (ii) mutual funds, close-end investment companies, common trust funds, pre-need companies and other similar entities, (iii) foreign exchange corporations, money changers, money payment, remittance, and transfer companies and other similar entities, and (iv) other entities administering or otherwise dealing in currency, commodities or financial derivatives based thereon, valuable objects, cash substitutes and other similar monetary instruments or property supervised or regulated by Securities and Exchange Commission and Exchange Commission .

3. Obligations of Covered Institutions

a) Customer Identification. - Covered institutions shall establish and record the true identity of its clients based on official documents. They shall maintain a system of verifying the true identity of their clients and, in case of corporate clients, require a system of verifying their legal existence and organizational structure, as well as the authority and identification of all persons purporting to act on their behalf.The provisions of existing laws to the contrary notwithstanding, anonymous accounts, accounts under fictitious names, and all other similar accounts shall be absolutely prohibited. Peso and foreign currency non-checking numbered accounts shall be allowed. The BSP may conduct annual testing solely limited to the determination of the existence and true identity of the owners of such accounts. b) Record Keeping. - All records of all transactions of covered institutions shall be maintained and safely stored for five (5) years from the dates of transactions. With respect to closed accounts, the records on customer identification, account files and business correspondence, shall be preserved and safely stored for at least five (5) years from the dates when they were closed. c) Reporting of Covered Transactions. - Covered institutions shall report to the AMLC all covered transactions within five (5) working days from occurrence thereof, unless the Supervising Authority concerned prescribes a longer period not exceeding ten (10) working days.

4. Covered Transactions
- is a single, series, or combination of transactions involving a total amount in excess of Four million Philippine pesos (Php4,000,000.00) or an equivalent amount in foreign currency based on the prevailing exchange rate within five (5) consecutive banking days except those between a covered institution and a person who, at the time of the transaction was a properly identified client and the amount is commensurate with the business or financial capacity of the client; or those with an underlying legal or trade obligation, purpose, origin or economic justification.

5. Suspicious Transactions - are transactions with covered institutions, regardless of the

amounts involved, where any of the following circumstances exists:

there is no underlying legal/trade obligation, purpose or economic justification; the client is not properly identified; the amount involved is not commensurate with the business or financial capacity of the client; the transaction is structured to avoid being the subject of reporting requirements under the AMLA; there is a deviation from the clients profile/past transactions; the transaction is related to an unlawful activity/offense under the AMLA; and

transactions similar or analogous to the above.

6. When is Money Laundering Committed?

Money Laundering is a crime whereby the proceeds of an unlawful activity as defined in the AMLA are transacted or attempted to be transacted to make them appear to have originated from legitimate sources. It is committed by the following:

Knowingly transacting or attempting to transact any monetary instrument/property which represents, involves or relates to the proceeds of an unlawful activity. Penalty is 7 to 14 years imprisonment and a fine of not less than P3M but not more than twice the value of the monetary instrument/property. Knowingly performing or failing to perform an act in relation to any monetary instrument/property involving the proceeds of any unlawful activity as a result of which he facilitated the offense of money laundering. Penalty is 4 to 7 years imprisonment and a fine of not less than P1.5M but not more than P3M. Knowingly failing to disclose and file with the AMLC any monetary instrument/property required to be disclosed and filed. Penalty is 6 months to 4 years imprisonment or a fine of not less than P100,000 but not more than P500,000, or both.

7. Unlawful Activities or Predicate Crimes

Unlawful Activity is the offense which generates dirty money or property. It is commonly called the predicate crime. It refers to any act or omission or series or combination thereof involving or having direct relation to the following:

Kidnapping for ransom Drug trafficking and related offenses Graft and corrupt practices Plunder Robbery and Extortion Jueteng and Masiao Piracy Qualified theft Swindling Smuggling Violations under the Electronic Commerce Act of 2000 Hijacking; destructive arson; and murder, including those perpetrated by terrorists against non-combatant persons and similar targets Fraudulent practices and other violations under the Securities Regulation Code of 2000 Felonies or offenses of a similar nature that are punishable under the penal laws of other countries. Terrorism financing and organizing or directing others to commit terrorism financing (R.A. 10168). Attempt/conspiracy to commit terrorism financing and organizing or directing others to commit terrorism financing (R.A. 10168).

Attempt/conspiracy to commit dealing with property or funds of designated person. Accomplice to terrorism financing or conspiracy to commit terrorism financing. Accessory to terrorism financing.

8. Anti-Money Laundering Council is composed of:

Governor of the BSP (Chairman) Commissioner of the Insurance Commission; and Chairman of the SEC

9. Functions
(1) to require and receive covered transaction reports from covered institutions; (2) to issue orders addressed to the appropriate Supervising Authority or the covered institution to determine the true identity of the owner of any monetary instrument or property subject of a covered transaction report or request for assistance from a foreign State, or believed by the Council, on the basis of substantial evidence, to be, in whole or in part, wherever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of an unlawful activity; (3) to institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General; (4) to cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses; (5) to initiate investigations of covered transactions, money laundering activities and other violations of this Act; (6) to freeze any monetary instrument or property alleged to be proceeds of any unlawful activity; (7) to implement such measures as may be necessary and justified under this Act to counteract money laundering; (8) to receive and take action in respect of, any request from foreign states for assistance in their own anti-money laundering operations provided in this Act; (9) to develop educational programs on the pernicious effects of money laundering, the methods and techniques used in money laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders; and (10) to enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including government-owned and -controlled corporations, in undertaking any and all anti-money laundering operations, which may include the use of its personnel,

facilities and resources for the more resolute prevention, detection and investigation of money laundering offenses and prosecution of offenders.

10. Freezing of Monetary Instrument or Property

The AMLC may file before Court of Appeals, before the verified application ex parte (without notice to the other party) after determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activty. The freeze order shall be effective immediately. The freeze order shall be for a period of 20 days unless extended by the court.

11. Authority to Inquire into Bank Deposits

The AMLC may inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution upon order of any competent court in cases of violation of the AMLA when it has been established that there is probable cause that the deposits or investments involved are in any way related to a money laundering offense.

C. FOREIGN INVESTMENTS ACT (R.A. No. 7042) 1. Policy of the Law

to attract, promote and welcome productive investments from foreign individuals, partnerships, corporations, and governments, including their political subdivisions, in activities which significantly contribute to national industrialization and socioeconomic development to the extent that foreign investment is allowed in such activity by the Constitution and relevant laws; to encourage foreign investments in enterprises that significantly expand livelihood and employment opportunities for Filipinos; to enhance economic value of farm products; to promote the welfare of Filipino consumers; to expand the scope, quality and volume of exports and their access to foreign markets; and/or to ransfer relevant technologies in agriculture, industry and support services. Foreign investments shall be welcome as a supplement to Filipino capital and technology in those enterprises serving mainly the domestic market.

2. Definition of Terms

a. Foreign Investment - shall mean as equity investment made by a non-Philippine national in the form of foreign exchange and/or other assets actually transferred to the Philippines and duly registered with the Central Bank which shall assess and appraise the value of such assets other than foreign exchange.

b. Doing business in the Philippines - shall include soliciting orders, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totalling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization. c. Export Enterprise- shall mean an enterprise which produces goods for sale, or renders services to the domestic market entirely or if exporting a portion of its output fails to consistently export at least sixty percent (60%) thereof. d. Domestic Market Enterprise - shall mean an enterprise which produces goods for sale, or renders service or otherwise engages in any business in the Philippines.

3. Registration of Investments on Non-Philippine Nationals

All documents executed abroad must be notarized by a notary public and authenticated by the Ministry of Foreign Affairs and the Philippine Embassy / Consulate of the country where the documents were issued. Pre-Processing of Documents All applications are considered officially accepted only upon submission of complete documents to appropriate government agency. Approval Decision or approval of the application should be made within fifteen (15) working days from official acceptance of said document/s. Otherwise, the application shall be considered as automatically approved if not acted upon within the said period for a cause not attributable to the applicant. Requirements Domestic Corporations or Partnerships which are non-Philippine Nationals

Agency: Securities and Exchange Commission 1. 2. 3. 4. 5. Articles of Incorporation / Partnership Name Verification Slip Bank Certificate of Deposit ICR (Immigrant Certificate of Registration), SIRV (Special Investors Resident Visa) Proof of inward remittance (for non-resident aliens)

Foreign Corporations Agency: Securities and Exchange Commission 1. Name Verification Slip 2. Certified Copy of Board Resolution authorizing the establishment of an office in the Philippines and designating the resident agency to whom summons and other legal processes may be served on behalf of the foreign corporation; 3. Financial statements for the immediately preceding year at the time of filing of the application, certified by an independent Certified Public Accountant of the home country; 4. Certified copies of the Articles of Incorporation / Partnership with an English translation if in a foreign language; 5. Proof of inward remittance such as bank certificate of inward remittance or credit advices. For representative offices, the amount initially remitted should be at least USD30,000.00 Single Proprietorships - Applications for Metro Manila Agency: Bureau of Trade Regulations and Consumer Protection (BTRCP), Department of Trade and Industry -National Capital Region (DTI-NCR) 1. Duly-accomplished BTRCP Form No. 17 and accompanying documents. 2. If the enterprise is engaged in defense-related activities, a clearance from Department of National Defense (DND) or Philippine National Police (PNP) 3. If a small and medium-sized domestic market enterprise with paid-in equity capital less than USD100,000.00, a certificate from the Department of Science and Technology (DOST) that the investment involves advance technology 4. If an enterprise with at least 50 direct employees, a certification from the appropriate Department of Labor and Employment (DOLE) Regional Office Corporations / Partnerships Agency: Provincial Extension Offices of the Securities and Exchange Commission (SEC)

Same requirements as above

Sole Proprietorships

Agency: Provincial Offices of the DTI

Same requirements as above

Additional Requirements Former natural-born Filipinos who wish to do business in the Philippines must also submit a copy of birth certificate issued by the National Statistics Office (NSO). For those born abroad, a certificate of birth from the appropriate government agency of the country where the birth is recorded will be required. It must show the father or mother to be a Filipino at the time of birth or if the citizenship of the parents is not indicated, additional proof that the parent is a Filipino citizen or has not lost his/her Filipino citizenship at the time of the applicant investor's birth. Those born before 17 January 1973 of Filipino mothers must also submit all of the following 1. Certified true copies of his / her sworn statement of election of Filipino citizenship 2. Oath of allegiance from civil registrar where documents were filed and/or forwarded 3. Identification certificate issued by the Bureau of Immigration In case of loss and/or destruction of record of birth or non-registration of birth, the following must be submitted: 1. Certificate of non-availability of birth certificate on account of loss and/or destruction of birth record from the local civil registrar and/or appropriate government agency if birth was registered abroad. 2. Copy of birth certificate of mother or father certified by the local civil registrar or the NSO 3. Affidavit of two (2) disinterested persons attesting to their personal knowledge that at the time of the applicant's birth, the child was born of a Filipino mother or father. Documents executed or issued abroad must be authenticated by the Philippine Embassy or Consulate having jurisdiction over the place of execution or issuance of document.

4. Foreign Investments in Export Enterprise

Export enterprises which are non-Philippine nationals shall register with BOI and submit the reports that may be required to ensure continuing compliance of the export enterprise with its export requirement. BOI shall advise SEC or BTRCP, as the case may be, of any export enterprise that fails to meet the export ratio requirement. The SEC or BTRCP shall thereupon order the non-complying export enterprise to reduce its sales to the domestic market to not more than forty percent [40%] of its total production; failure to comply with such SEC or BTRCP order, without justifiable reason, shall subject the enterprise to cancellation of SEC or BTRCP registration, and/or the penalties provided in Section 14 of R.A. No. 7042.

5. Foreign Investments in Domestic Market Enterprise

Non-Philippine nationals may own up to one hundred percent [100%] of domestic market enterprises unless foreign ownership therein is prohibited or limited by the Constitution and existing law or the Foreign Investment Negative List under Section 8 of R.A. No. 7042.

6. Foreign Investment Negative List

The Foreign Investment Negative List shall have three (3) component lists: A, B, and C: a) List A shall enumerate the areas of activities reserved to Philippine nationals by mandate of the Constitution and specific laws. b) List B shall contain the areas of activities and enterprises pursuant to law: 1) Which are defense-related activities, requiring prior clearance and authorization from Department of National Defense (DND) to engage in such activity, such as the manufacture, repair, storage and/or distribution of firearms, ammunition, lethal weapons, military ordnance, explosives, pyrotechnics and similar materials; unless such manufacturing or repair activity is specifically authorized, with a substantial export component, to a non-Philippine national by the Secretary of National Defense; or 2) Which have implications on public health and morals, such as the manufacture and distribution of dangerous drugs; all forms of gambling; nightclubs, bars, beerhouses, dance halls; sauna and steambath houses and massage clinics. Small and medium-sized domestic market enterprises with paid-in equity capital less than the equivalent of five hundred thousand US dollars (US$500,000) are reserved to Philippine nationals, unless they involve advanced technology as determined by the Department of Science and Technology. Export enterprises which utilize raw materials from depleting natural resources, with paid-in equity capital of less than the equivalent of five hundred thousand US dollars (US$500,000) are likewise reserved to Philippine nationals. Amendments to List B may be made upon recommendation of the Secretary of National Defense, or the Secretary of Health, or the Secretary of Education, Culture and Sports, indorsed by the NEDA, or upon recommendation motu propio of NEDA, approved by the President, and promulgated by Presidential Proclamation. c) List C shall contain the areas of investment in which existing enterprises already serve adequately the needs of the economy and the consumer and do not require further foreign investments, as determined by NEDA applying the criteria provided in Section 9 of this Act, approved by the President and promulgated in a Presidential Proclamation.

-Aiza Dimakuta