PHILIPPINES: Government Relaxes Investment Law to Boost Tech Sector

The Philippines approved Republic Act No. 11647 on 2 March 2022, easing entry barriers for foreign investment in the country’s technology sector. The new regulations amend the Foreign Investments Act of 1991, or Republic Act No. 7042, allowing foreigners to set up and own up to 100% equity of small- and medium-sized enterprises, in any business sector not excluded under the country’s current Foreign Investment Negative List, subject to capital and employment requirements. 

The new rules now permit that under certain conditions, fully foreign-owned companies are allowed a minimum paid-up capital of $100,000 as opposed to the US$200,000 minimum previously mandated. Such enterprises must use advanced technology; be a startup or a startup enabler; and employ a Filipino-majority workforce with at least 15 local employees. Foreign enterprises enjoying fiscal incentives that employ foreign nationals must have an understudy or skills development programme for the transfer of technology and skills to local workers.