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1. Prequalification Requirements
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Before a foreign retailer is allowed to establish or organize an entity that will engage in
the retail trade business or invest in a retail store in the Philippines, it must possess all of the
following qualifications:
(a) A minimum Net Worth, of:
(i)
US $200 Million of the registrant corporation in Categories B and C; and
(ii)
US $50 Million of the registrant corporation in Category D.
Net Worth (Sec. 1 (k), Rule I, IRR)
(b) Five (5) retailing branches or franchises, in operation anywhere around the world
unless such retailer has at least one (1) store, capitalized at a minimum of US $25
Million;
Franchise (Sec. 1 (e), Rule I, IRR)
Store/Branch (Sec. 1 (s), Rule I, IRR)
(c) Five (5) year track record in retailing; and
(d) They must be nationals from, or juridical entities formed or incorporated in, countries
which allow the entry of Filipino retailers. (Sec. 1, Rule IV, IRR)
For purposes of determining compliance with the requirements:
Sec. 1, Rule IV, IRR
For purposes of determining the track record of a foreign retailer:
Sec. 1, (t), Rule I, IRR
For publicly traded companies, net worth may be determined by:
Sec. 1, Rule IV, IRR
2. Application for Prequalification
Request for prequalification;
Duly signed and acknowledged under oath by an authorized officer of the foreign
retailer;
Must be submitted to the Board of Investments before filing a formal application
to engage in retail or invest in a retail store; and
Application must be accompanied by a certification by the proper official of the
home state of the applicant-foreign retailer or the local embassy/consulate of the
home-country, to the effect that the laws of such state allows or permits
reciprocal rights to Philippine citizens and enterprises together with the extent
of participation allowed. (Sec. 2, Rule IV, IRR)
Reciprocity rights (Sec. 1, (n), Rule I, IRR)
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Notwithstanding RTLA 2000 allowing 100% foreign ownership of retail activities subject
to the capitalization requirements, a foreign retailer shall be allowed to own only up to the extent
of the foreign ownership allowed for retailing in its home country.
3. Branches/Stores
a. Direct Opening of Branches/Stores
A registered foreign retailer may open branches and/or stores in the Philippines falling
under Categories B and C, provided that the investments for each branch/store must be no less
than the peso equivalent of US $830,000.00. (Sec. 2, Rule III, IRR)
Such requirement shall be complied with also, when at least 51% of the outstanding
capital stock of any existing retail store is acquired by a single foreign retailer. (Sec. 63, Rule IV,
IRR)
b. Acquiring/Investing in Existing Retail Stores
Whenever a foreign investor is also engaged in retail trade and such foreign investor
acquires 51% or more of the outstanding capital stock of an existing retail store, no transfer of
shares to any such foreign investor shall be recorded by the Corporate Secretary in the
corporate books thereof, unless a Certificate of Compliance with Prequalification is presented.
(Sec. 2, Rule IV, IRR)
4. Promotion of Locality-Manufactured Products
For ten (10) years after the effectivity of RTLA 2000, at least thirty (30) of the aggregate
cost of the stock inventory of foreign retailers falling under Categories B and C and ten percent
(10%) for Category D shall be made in the Philippines. (Sec. 9, R.A. No. 8762)
5. Prohibited Activities of Qualified Foreign Retailers
Not allowed to engaged in certain retailing activities outside their accredited stored
through:
the use of mobile or rolling stores or carts;
the use of sales representatives;
door-to-door selling;
restaurants and sari-sari stores; and
such other similar retailing activities.
(Sec. 10, R.A. No. 8762)
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