August 2, 1984

Lopez, Evangelista, Agravante & Company

Suite 502, Pacific Bank Bldg.

Ayala Avenue, Makat

Metro Manila

Attenton : Resttuto T . Lopez

Managing Partner

Gentlemen:

This refers to your letter dated April 16, 1984 requestng for the opinion of this Commission on
the queries posed therein. cdtai

It appears that a group of investors shall form a realty and development company with an
authorized capital of P10 Million with subscripton to be paid in cash and property. There shall
be seven (7) incorporators; six Filipinos and one Saudi Natonal. The number of directors shall
be five including the foreigner who will act as treasurer-in-trust while the company is in the
process of incorporaton.

With the above facts, the following queries are presented:

1. Will the Securites and Exchange Commission (SEC) approve the incorporaton of the
company following the inital agreement reached among the investors?

2. Will the use of the corporate name which reads as follows "(surname of foreigner)
Realty and Development Corporaton" be allowed by the SEC?

3. Will a "Deed of Assignment in exchange for shares of stocks of the company" suffice for
the real estate investment of the Filipino? What other documents will the SEC require?

4. Will the foreigner who is holder of a special investor visa be allowed to assume any of
the following key positons:

— Chairman of the Board or President, or

— Chairman of the Board and Treasurer, or

— Vice-President Finance or
— General Manager.

5. What other documents will the SEC need other than those mentoned in the SEC
checklist for companies that are to be incorporated?

We answer the above queries in the order they are propounded:

1. The primary purpose quoted for the proposed corporaton is not appropriate for one
which shall engage in realty and development business. We suggest the following primary
purpose:

"To buy, purchase, acquire, lease, hold, sell and exchange or otherwise deal in real estate and
any interest on any kind whatsoever therein; to improve, develop and manage any real estate or
property so acquired, owned, leased or held; to erect or cause to be erected such buildings and
other structures with their appurtenance thereon as shall be deemed advisable for the
betterment of such real estate; to lease, mortgage and encumber the same; to enlarge, rebuild,
alter, improve any buildings or structures now or hereafter erected on any lands so owned, held,
leased or occupied by the corporaton; to subdivide or plot real estate and sell the same in lots
for cash or installments; and in general, to do, conduct and perform general real estate
business." cdtai

Please submit your proposed artcles of incorporaton to this Commission together with all the
supportng papers for processing to determine whether said documents are in accordance with
our rules and regulatons.

2. The existng policy of the Commission does not allow the use of the surname of a non-
resident alien who is merely a minority stockholder in the corporate name of domestc
corporatons.

3. For payment of subscripton by property, a copy of the deed of assignment of property

duly presented for primary entry in the office of the Register of Deed where the property is
located should be submitted as evidence that the subscriber concerned has transferred his real
estate to the corporaton.

For the additonal requirements, please submit:

a. Appraisal report of real property being assigned;

b. OCT or TCT or copies thereof duly certfied by its official custodian (Register of Deeds);
and

c. Real estate tax declaraton(s) and latest real estate tax payment receipt(s)
4. Anent your fourth query, please be informed that this Commission, in a previous opinion
has ruled that, "In firms engaged in wholly or partally natonalized actvites, aliens are banned
from being appointed to management positons such as president, vice-president, treasurer,
auditor, etc. of the same companies pursuant to a ruling of the Ministry of Justce, although
they can be elected directors in proporton to their allowable partcipaton or share in the
capital of such actvites in accordance with the Ant-Dummy Law, as amended by Presidental
Decree No. 715." (Letter to Judge Pio Marcos, dated July 1, 1983). Emphasis supplied)
Corporatons engaged in partally natonalized actvites which includes real estate development,
are those organized under the laws of the Philippines of which, at least 60% of the capital stock
outstanding and enttled to vote is owned and held by citzens of the Philippines.

Moreover, the Commission on Immigraton and Deportaton, in its 2nd Indorsement dated July
27, 1984, xerox copy hereto attached, answering SEC query on the rights and obligatons of a
holder of "special investor visa" states that Presidental Decree No. 1623 has no provision which
allows holder of said visa to assume the positon of Chairman of the Board and Treasurer, or
Vice-President, Finance or General Manager. prcd

5. All the documents required for the registraton of corporatons are stated in the attached
checklist.

Please be advised accordingly.

Very truly yours,

(SGD.) ROSARIO N. LOPEZ

Associate Commissioner
So if you’re planning to start a corporation, or thinking of upgrading your business structure to
one, then here’s a simple guide on how to register a corporation in the Philippines.

Step 1: Verify the availability of the company name

Done with the Securities and Exchange Commission (SEC). Takes 1 day to complete. Once
verified and approved, you will pay P40 to have the name reserved for a month. You must then
file the application for incorporation to the SEC within one month or pay another P40 to extend
the deadline for another month.

Step 2: Obtain a bank certificate of deposit for the paid-in capital

Done at the bank. Takes 1 day to complete. Fees vary from bank to bank.

Step 3: Prepare and register incorporation papers

Done with the SEC. Takes at least 3 days to complete. Fees will add up to around P3,000. You
need to submit the verification slip (from Step 1), bank certificate of deposit (from Step 2),
articles of incorporation and by-laws, treasurer’s affidavit and many other documents. Forms
and check list available at the SEC.

Step 4: Obtain a company Community Tax Certificate (CTC)

Obtained at the barangay office or city hall. Takes only 1 day. Fee will be P500 minimum.

Step 5: Apply for a Barangay or District clearance

Done with the barangay office. Takes 2 days. Fees will be around P1,000.

Step 6: Obtain a mayor’s business permit

Done at the City Hall Business Licensing Office. Takes around 2 weeks to complete. Your
biggest expense in terms of fees as it will depend on your declared capital. Prepare at least
P10,000. Aside from documents obtained in the previous step, you will be required to file other
forms and requirements. Ask the licensing office for the check list.

Step 7: Register for taxes

Done at the Bureau of Internal Revenue (BIR) office. Takes around 4 days. Registration fees
may add up to around P750 plus additional fees for documentary stamp taxes which depends
on your declared capital. You will obtain your company Tax Identification Number (TIN),
authority to print receipt/invoices and other documents.
Step 8: Buy accounting books
Buy from any bookstore. Takes 1 day. You’ll be spending around P500 for a cash receipts
account, a disbursements account, a ledger and the general journal. Consult your local BIR
office for specific requirements on the books.

Step 9: Print your receipts

Done with any print shop accredited by the BIR. Takes around 1 week. Fees vary but it’s usually
around P5,000 for 25 booklets.

Step 10: Have your receipts and books stamped

Done at the BIR office. Takes 1 day at no cost. At this point, you can now legally operate your
business.

Step 11: Register your employees

Done at various offices. Takes around 2 weeks to process everything. As required by law, you
will need to enroll your employees (which may include yourself) with the Social Security System
(SSS), Department of Labor and Employment (DOLE), Home Development Mutual Fund
(HDMF) and Philippine Health Insurance Corp. (PhilHealth).

This step-by-step guide is just a simplified summary and other steps may be required, specially
for businesses which require special permits and clearances (ie, real estate, pawnshops,
schools, etc.).

For a comprehensive list of the additional licenses, you may check out the article: How To
Register Your Business in the Philippines.

Lastly, the filing duration and fees mentioned are based from personal experience. If you’ve
recently registered a corporation in the country and have a different experience than what I’ve
written above, then please share it below as a comment so I may add it here. Thank you.