THE MEASURE proposing to reduce the required minimum paid-up capital for foreign companies that seek to enter the Philippine retail sector has been filed anew in the Senate.
Senator Sherwin T. Gatchalian, under Senate Bill No. 921, proposed to amend Republic Act No. 8762, or the “Retail Trade Liberalization Act of 2000,” in hopes of increased foreign direct investments in the country.
Mr. Gatchalian noted that since the passage of the law, only 22 foreign retail firms have invested in the country, based on a 2016 list of firms pre-qualified by the Department of Trade and Industry’s Board of Investment.
“There is a need to revisit the requirements of the retail trade liberalization law to truly liberalize and incentivize investments in the retail sector,” Mr. Gatchalian said in the explanatory note.
The bill proposed to set the minimum paid-up capital for the entry of foreign-owned enterprises at $200,000 and remove the $830,000 minimum investment per store requirement.
The law currently allows foreign entrants to set up wholly owned enterprises with minimum paid-up capital of $7.5 million; while enterprises with $2.5 million to $7.5 million may be wholly owned by foreigners except for the first two years.
The bill will also do away with the $250,000 capital per store for those specializing in high-end or luxury products.
Moreover, the measure removes other requirements such as the $200-million minimum net worth of enterprises with paid-up capital of $2.5 million to $7.5 million and $50 million for those selling high-end or luxury products; as well as the five-year track record in retailing, among others.
The same was filed by Senate Minority Leader Franklin M. Drilon, under SB 14; while six counterpart bills are pending in the House committee on trade and industry.
In the 17th Congress, the measure bagged the House of Representatives’ final approval in May but failed to hurdle the Senate committee.
The bill is one of the Cabinet economic cluster’s priority bills for the first regular session of the 18th Congress, which closes on June 5 next year; along with the proposed amendment of RA 7042, or the Foreign Investments Act of 1991, to remove restrictions on foreigners from practicing their profession in the Philippines; and to the 82-year-old Commonwealth Act No. 146, or the Public Service Act, which will lift foreign ownership limits in transport and telecoms.
The said measures were also among those cited by 14 local and foreign business groups on a list sent to Malacañang and Congress. — Charmaine A. Tadalan