Joint Foreign Chambers backs proposed amendments to ease investment rules
Credit to Author: The Manila Times| Date: Mon, 28 Jan 2019 04:43:10 +0000
The Joint Foreign Chambers of the Philippines (JFC) on Monday expressed support for a Senate bill that would relax rules on foreign investors who fully own firms in the domestic market, including reducing company size requirement to a “more reasonable number.”
The Senate committee on economic affairs started its hearing on Senate Bill (SB) 2102 or the Foreign Investment Act (FIA), which seeks to amend Republic Act 7042 or FIA of 1991.
“It is our view that the practice of all professions is not a germane provision in the Foreign Investment Negative List (FINL), the key document created by the Foreign Investments Act,” JFC said in a statement.
FINL prescribes the limitation of foreign investors in conducting domestic business operations or activities.
This precludes the practice of profession, JFC claimed, noting that it is not an “investment activity under the scope of the FIA and therefore should not be included in the FINL.”
Meanwhile, JFC agreed that the labor force of foreign firms with 100-percent ownership in the domestic market should be decreased to 15 from 50.
Under FIA, the foreign firms are granted full ownership given that they have a minimum investment of $100,000 and use “advanced technology” or maintain 50 direct employees.
The minimum investment, JFC said, could not support the current yearly minimum wage of 50-member staff as these firms would spend $114,269 for salaries, excluding other labor expenses and operational costs.
“So as not to render pointless this provision of the law, and to align it with the spirit of the FlA, there is a need to reduce the employment requirement and lower the threshold to a more reasonable number, which the bill recommends to be 15 employees,” JFC said.
Sen. Sherwin Gatchalian, committee chairman, said that the SB 2102 would be a priority bill that would be passed before Congress would adjourn on February 8. Session will resume on May 20. TYRONE JASPER C. PIAD
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