Foreign Investment In The Philippines Case Study
Enterprises may be up to 100% foreign-owned as long as foreign ownership is not otherwise limited by the Foreign Investments Negative List. The Negative List is promulgated by the President and it specifies foreign ownership limits in various economic activities, mainly related to defense, public health and morals, and constitutionally protected areas.
By allowing foreign equity participation in most economic activities, the FIA reinforces the importance of foreign investment in Filipino economy. It also establishes legal certainty as it sets the extent of foreign equity participation in a given business endeavor. The FIA encourages more foreign firms to own Philippine subsidiaries, maintain greater equity interest in Philippine firms, and set up operations …show more content…
Through the Code, foreign investors can avail of useful fiscal incentives as well as the advantages of setting up regional headquarters, operating headquarters, and warehouses. The FIA enables foreign investors to enjoy greater equity participation. Besides fiscal and equity incentives, the Ecozone Act enables foreign investors to locate enterprises in specialized ecozones to get the benefit of improved infrastructure and facilities therein.
While these laws are positive developments, there are still opportunities for improvements. Efforts in the years ahead must include: harmonizing and reconciling all the foreign investment laws, liberalizing foreign ownership restraints on non-pioneer enterprises, adopting long-term Investment Priorities Plan and Negative List to ensure certainty, reducing bureaucracy to eliminate corruption, complexity and abuse, and streamlining registration procedures and rules. The ultimate goal is to attract foreign capital into the national economy, and the laws should therefore open the economy