Certified as urgent, Senate Bill No. 1156, which introduces amendments to the Foreign Investments Act of 1991, was approved by the Senate on its third and final reading. The economic reform seeks to attract and welcome foreign investment activities by easing the restrictions and requirements for foreign businesses in the Philippines.
Senate Bill No. 1156, which introduces amendments to the Foreign Investments Act (FIA) of 1991, was approved by the Senate on the third and final reading last September 14, 2021. Certified as urgent by President Rodrigo Duterte, the economic reform seeks to attract and welcome foreign investment activities by easing the restrictions and requirements for foreign businesses in the Philippines.
The amended FIA also mandates the creation of the Investment Promotions Council, which will develop an Investment Priority Plan to address the concerns of foreign investors, such as power, technology, and infrastructure development. The Investment Promotions Council will comprise of representatives from various government agencies and will serve as the governing body that will integrate, promote, and facilitate foreign investment efforts in the country along with all existing investment promotion agencies.
Below are the highlights and key amendments introduced in SB 1156. Colliers anticipates that the economic reform measure will increase foreign investment inflows, create job opportunities, and boost the country’s economy as it recovers from the pandemic.
• Reduction of local employment requirement for foreign companies from 50 to 15 Filipino employees
• Allow foreigners to own up to 100% of domestic market enterprises (except in areas included in the foreign investment negative list)
• Allow foreign investors to set up and own 100% of small and medium-sized enterprises (SMEs)
With these amendments introduced to the law, investors can look forward to supportive government policy and a progressive business environment.
Colliers believes that the relaxed restrictions would allow more investments to flow through various sectors, create more job opportunities, and unlock new opportunities within the economy. The economic growth to be brought by this liberalization of investment policies will ultimately cascade to areas such as the Metro Manila and countryside office market as more companies and investments are set up in the Philippines.
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