PHILIPPINES Law and Practice Contributed by: Francis L. Fragante and Jennifer Marie G. Castro, Cruz Marcelo & Tenefrancia
8. Other Review/Approvals 8.1 Other Regimes
In this regard, before the investment is made, and provided that the transaction is subject to mandatory notification, the PCC may block an investment by not approving it. After an investment is made and if it was required to be notified but there was failure to do so, the PCC may declare the merger/acquisition as void and without legal effect. Final orders or decisions of the PCC are appealable to the Court of Appeals in accordance with the Rules of Court. The appeal shall be made within 15 calendar days from receipt of the PCC’s decision. The appeal shall not stay the final order or decision sought to be reviewed, unless the Court of Appeals directs other - wise. 7. Foreign Investment/National Security 7.1 Applicable Regulator and Process Overview Foreign investors who conduct business in the Phil - ippines are required to register with the SEC or the Department of Trade and Industry (DTI), as appropri - ate, and secure additional registrations, permits and licences from relevant government agencies based on their specific industry. However, other than the nationality restrictions, there is no national security review for FDI. 7.2 Criteria for National Security Review This is not applicable in the Philippines. See 7.1 Appli- cable Regulator and Process Overview . 7.3 Remedies and Commitments This is not applicable in the Philippines. See 7.1 Appli- cable Regulator and Process Overview . 7.4 National Security Review Enforcement This is not applicable in the Philippines. See 7.1 Appli- cable Regulator and Process Overview .
Ownership of private land in the Philippines is limited to Filipino citizens and corporations whose capital is at least 60% owned by Filipino citizens. However, Republic Act No 7652 or the Investors’ Lease Act, as amended by Republic Act No 12252, allows foreign investors to enter into long-term leases of private land, subject to certain requirements, namely: • the foreign investor must have an approved and registered investment; • the leased area shall be used solely for the approved and registered investment upon the mutual agreement of the parties; • the aggregate period of the lease contract shall not exceed 99 years; • the lease contract shall be registered with the Registry of Deeds of the province or city where the leased area is located and annotated on the certifi - cate of title of the land and/or the tax declaration, or recorded in the Primary Entry Book for Unregis - tered Lands, as applicable; and • in the case of tourism projects, lease of private lands by a foreign investor shall be limited to projects with an investment of not less than USD5 million, 70% of which shall be infused in the project within three years from the signing of the lease contract. For this purpose, the 70% includes pre- development expenses, pre-operating expenses, cost of land and land improvements, buildings, leasehold improvements, working capital, and machinery and equipment, inventory, and other current and non-current assets.
9. Tax 9.1 Taxation of Business Activities
The taxes imposed on a domestic corporation are: • corporate income tax of 25% of its net taxable income; • minimum corporate income tax (MCIT) of 2% of the gross income; • tax on certain passive income; • VAT of 12% of its gross receipts; and
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