Companies:

What is the law that governs foreign investment companies in Philippines?

Republic Act 7042 as amended or the Foreign Investments Act of 1991.

What types of companies can foreigners own to invest in Philippines?

General Rule: All types of companies. Expn: Negative list

Can foreigners partner with locals to form companies? Will these be considered
foreign investment companies?

Yes. Foreign investment is any equity poured into a local company as allowed by
law.

Yes, for industries or companies allowed by law. (check Froeign equity rule on the
negative list)

Are the laws different for foreign investment companies and local companies?

Generally, they are the same in all aspect but only differ in the registration and
capitalization requirements.

Different law for foreign corporation doing business in the Philippines (Tax
implications)

How long does it take to set up a company?

For sole Proprietorship. 30 days, from registration to payment of government fees

and release of local business permit.

For Partnership and Corporation, 3-5weeks from submission of all documents to

SEC.
Can you explain the process?

Are foreigners allowed to invest into any type of legal business in Phillipines?
GENERAL RULE: YES, except companies in the negative list.

If there are restrictions to foreign investment- can you please explain them?

Negative list A: areas of investment where foreign ownership is limited by mandate

of the Philippine Constitution or by specific laws.

Negative list B: areas of investment where foreign ownership is limited for reasons
of security, defense, risk to health and morals, or for protection of SME’s.

LIST A
No Foreign Equity

 Mass media except recording

 Practice of Professions
o Pharmacy
o Radiologic and x-ray technology
o Criminology
o Forestry
o Law
 Retail trade enterprises with paid-up capital of less than US$ 2,500,00 Retail trade as “any act, occupation or calling
of habitually selling direct to the general public merchandise, commodities or goods for consumption.
 Cooperatives
 Private Security Agencies
 Small-scale Mining
 Utilization of Marine Resources in archipelagic waters, territorial sea, and exclusive economic zone as well as small-scale
utilization of natural resources in rivers, lakes, bays, and lagoons
 Ownership, operation, and management of cockpits
 Manufacture, repair, stockpiling, and/or distribution of nuclear weapons
  Manufacture, repair, stockpiling, and/or distribution of biological, chemical and radiological weapons, and anti-personal
mines (various treaties to which the Philippines is a signatory and conventions supported by the Philippines)
 Manufacture of firecrackers and other pyrotechnic devices

Up to Twenty Percent (20%) Foreign Equity

 Private radio communication network

Up to Twenty-Five Percent (25%) Foreign Equity

 Private recruitment, whether for local or overseas employment

 Contracts for the construction and repair of locally-funded public works, except:
o Infrastructure/development projects covered in RA 7718; and
o Projects which are foreign-funded or assisted and required to undergo international competitive bidding of
contracts for construction of defense-related structure
Up to Thirty Percent (30%) Foreign Equity

 Advertising
Up to Forty Percent (40%) Foreign Equity

 Exploration, development, and utilization of natural resources

 Ownership of Private Lands
 Operation and management of public utilities
 Educational institutions other than those established by religious groups and mission boards
 Culture, production, milling, processing, trading except retailing, of rice and corn and acquiring, by barter, purchase or
otherwise, rice and corn and the by-products thereof
 Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company,
agency or municipal corporation
 Facility operator of an infrastructure or a development facility requiring a public utility franchise
 Operation of deep sea commercial fishing vessels
 Adjustment companies
 Ownership of condominium units
LIST B
Up to Forty Percent (40%) Foreign Equity

 Manufacture, repair, storage, and/or distribution of products and/or ingredients requiring Philippine National Police
(PNP) clearance:
o
 Firearms (handguns to shotguns), parts of firearms and ammunition therefore, instruments or
implements used or intended to be used in the manufacture of firearms
 Gunpowder
 Dynamite
 Blasting supplies
 Ingredients used in making explosives
 Chlorates of potassium and sodium
 Nitrates of ammonium, potassium, sodium barium, copper (11), lead (11), calcium and
cuprite
 Nitric acid
 Nitrocellulose
 Perchlorates of ammonium, potassium and sodium
 Dinitrocellulose
 Glycerol
 Amorphous phosphorus
 Hydrogen peroxide
 Strontium nitrate powder
 Toluene
 Telescopic sights, sniper scope and other similar devices
However, the manufacture or repair of these items may be authorized by the Chief of the PNP to
foreign nationals; provided that a substantial percentage of output, as determined by the said agency,
 is exported and the extent of foreign equity ownership allowed shall be specified in the said
authority/clearance.

 Manufacture, repair, storage, and/or distribution of products requiring Department of National Defense (DND) clearance;
o Guns and ammunition for warfare
o Military ordnance and parts thereof (e.g., torpedoes, depth charges, bombs, grenades, missiles)
o Gunnery, bombing, and fire control systems and components
o Guided missiles/missile systems and components
o Tactical aircraft (fixed and rotary-winged), parts and components thereof
o Space vehicles and component systems
o Combat vessels (air, land, and naval) and auxiliaries
o Weapons repair and maintenance equipment
o Military communications equipment
o Night vision equipment
o Stimulated coherent radiation devices, components, and accessories
o Armament training devices
o Others as may be determined by the Secretary of the DND
However, the manufacture or repair of these items may be authorized by the Secretary of National Defence to
foreign nationals; provided that a substantial percentage of output, as determined by the said agency, is
exported and the extent of foreign equity ownership allowed shall be specified in the said authority/clearance.

 Manufacture and distribution of dangerous drugs

 Sauna and steam bathhouses, massage clinics and other like activities regulated by law because of risks posed to public
health and morals
 All forms of gambling, except those covered by investment agreements with PAGCOR
 Domestic market enterprises with paid-in equity capital of less than the equivalent of US$200,000
 Domestic market enterprises which involve advanced technology or employ at least fifty (50) direct employees with paid-
in equity capital of less than the equivalent of US$100,000

2. Domestic Corporations and Subsidiaries

Up to 100% foreign ownership is allowed for domestic corporations that:

 Are not part of the foreign investment negative lists*Note that retail businesses (selling directly to consumers) with less
than $2.5 Million in paid-up capital is listed under Negative List A.
 Have at least the peso equivalent of USD $200,000 in paid-in equity capital.

This amount can be reduced to USD $100,000 if :

 the enterprise employs 50 employees or

 if it will be using “advanced technology”—to be determined by the Department of Science and Technology.

3. Retail Trade Enterprise

Retail Trade Enterprise are businesses that sell directly to consumers.

Under the law (RA 8762 – Retail Trade Liberalization Act of 2000) , up to 100% foreign ownership is allowed for retail trade
enterprises for two categories of businesses:

 Category A: Have a paid-up capital of USD 2.5 Million or more

 Category B:Specializing in high end or luxury products, provided that the paid-up capital per store is not less than USD
250,000.00 (Sec. 5 of R.A. 8762)

Additional qualification requirements for foreign retailers can be found below:

 Parent company with USD 200M net worth (USD 50M net worth for luxury brands)
 At least 5 branches or franchises around the world OR at least one store capitalized at a minimum of USD $25M
 Five year track record in retailing; and
 Only nationals from, or juridical entities formed or incorporated in Countries which allow the entry of Filipino retailers
shall be allowed to engage in retail trade in the Philippines.
 Finally, all retail trade enterprises under category A that exceeds 80% foreign equity must list and offer a minimum of 30%
equity in any stock market in the Philippines. This should be done within 8 years from the company’s start of operations.

4. Export Businesses

100% foreign ownership is allowed for export businesses, as long as it doesn’t fall under the negative lists. A business is
considered as an export business if at least 60% of its output or sales are exported.

Call centers, BPOs, KPOs, back offices and similar businesses can all be considered as export businesses provided they adhere
to the output rule.

Export businesses can also claim tax incentives via various laws (EO 226 / Board of Investments, PEZA law, and other
economic zone laws)

Is there a minimum amount of capital that has to be paid up to invest into the
Phillipines?

G.R: must not less than 5,000 for corporation paid up capital. For Retail Trade: More
than $2.5M paid up. For other industries Please see attachment:

What is the cost for setting up a foreign investment company?

If corporation, it would depend on the industry and the required paid up capital on
which the investor wants to invest in. But normally,

Name Reservation 60 days PHP 80.00

Articles of Incorporation PHP 1,000.00

By-laws PHP 500.00

Foreign Investment Act Application PHP 2,000.00

Foreign Investment Act Application PHP 2,000.00

Legal Research Fee PHP20.00

Stock & Transfer Book PHP470.00

Notarial PHP 900.00

Total PHP 4,970.00

At what stage of the set up process can the company start trading?

G.R. Upon the issuance of the Certificate of Registration by the SEC.

Visas
What is the law the governs visas in Phillipines?

Philippine Immigration Laws and other Related Laws

CA 613 - Philippine Immigration Law of 1940

RA 562 - Alien Registration Act of 1950

RA 9225 - Citizenship Retention and Reaquisition Act of 2003

MCL-08-006 - Revised Rules Governing Philippine Citizenship Under Republic Act
9225 and Administrative Order No. 91 Series of 2004

RA 9139 - Administrative Naturalization Law of 2000

RA 9208 - Anti-Trafficking in Person Act 2003

RRI-RA 9208 - Rules and Regulation Implementing the Anti-Trafficking in Person

Act of 2003

RA 8042 - Migrant Workers and Overseas Filipinos Act of 1995

RA 10022 - Amendment of R.A. 8042 known as Migrant Workers and Overseas

Filipinos Act of 1995

PD 1034 - Authorizing the Establishment of an Offshore Banking System in the

Philippines

RA 8756 - Ombudsman Investments Code of 1987 - Incentives to Multinational

Companies Establishing Regional or Area Headquarters and Regional Operating
Headquarters in the Philippines

AO 091 - Implementing Agency of Republic Act 9225 known as Citizenship

Retention and Reaquisition Act of 2003

LML-M-03-A12-001 - Guideline on Departure Formalities for International Bound

Passengers in all Airports and Seaports in the Country

RA 7919 - Social Integration Program in the Philippines Under Certain Conditions

RA 10364 - Expanding RA 9208 - To Institute Policies to Eliminate TRafficking in

Persons

RA 8247 - Alien Social Integration Act of 1995 Under Executive Order 324

PC 1987 - The 1987 Constitution of the Republic of the Philippines

MO 036 - Inter-Agency Council Against Trafficking (IACAT) Revised Guidelines on

Departure Formalities for International-Bound Passengers

What are the different types visas that foreigners can use when investing in
Phillipines?

Special Investor's Resident Visa (SIRV)

The Special Investor's Resident Visa (SIRV) entitles the holder to reside in the
Philippines for an indefinite period as long as the required qualifications and
investments are maintained.

Who can Apply for a SIRV?

Any alien, except for restricted nationals, at least twenty-one (21) years of age, who
meets the qualifications and follows the implementing rules provided for in the
issuance of an SIRV. The applicant's spouse and unmarried children under twenty-
one (21) years of age may also be issued the same visa.

The applicant must not have been convicted of a crime involving moral turpitude,
been afflicted with any loathsome, dangerous or contagious disease; has not been
institutionalized for any mental disorder or disability; and is willing and able to
invest the amount of at least USD75,000 in the Philippines.

What are the Privileges of having a SIRV?

The holder may reside in the Philippines for as long as his investment subsists and is
entitled to import used household goods and personal effects tax and duty-free as an
alien coming to settle in the Philippines for the first time.

Requirements for a SIRV

1. Duly-accomplished and notarized application form, with recent photographs;

2. Clearance from the National Intelligence Coordinating Agency (NICA),
together with either a clearance from the central government agency of the
applicant's country or place of residence, competent to give information about
any criminal record that the applicant may have, duly authenticated by the
Philippine Embassy, or the Interpol Division of the National Bureau of
Investigation (NBI) indicating that the applicant has not been convicted by
final judgement of a crime involving moral turpitude. The NICA shall issue
an initial clearance within three (3) working days from receipt of the BOI
endorsement, and a more thorough verification to cover the Armed Forces of
the Philippines and the Philippine National Police should be made within
three(3) months after the grant of the probationary visa. Any derogatory
record may be the basis for revocation of the SIRV holder's visa. The
expiration date of said clearances should not be earlier than six (6) months
from date of filing of application;
3. Medical certificate issued by the Department of Health (DOH), any
government hospital or health facility, or any licensed and accredited
hospital, medical center, or laboratory or the equivalent in the applicant's
home country, certifying that the applicant is physically and mentally fit. The
expiration of the certification should not be earlier than six (6) months from
date of filing of application;
4. Certification under oath from the duly-authorized officers of any accredited
depository bank in the Philippines as to the amount of foreign exchange
 inwardly remitted by applicant, and its conversion to pesos through the said
bank, in the prescribed form. Should the inward remittance be sent through
non-accredited correspondent banks, the total amount of remitted money
should be immediately transferred to the accredited banks. In all cases,
inward remittances shall not be made earlier than one (1) year prior to the
filing of the application;
5. Certified true copy of the certificate of peso time deposit with a maturity
period of at least thirty (30) days. The original copy of the certificate of time
deposit shall remain with the depository bank for safe-keeping;
6. Birth certificate/family registry/household registry duly authenticated by the
Philippine Consulate/Embassy located in the applicant's home country or the
applicant's embassy in the Philippines;
7. If spouse and dependent children are included in the application, marriage
contract duly authenticated by the Philippine Consulate/Embassy located in
the applicant's home country or by the applicant's Embassy in the Philippines;
8. Original passport of the applicant; and
9. Payment (3,600 NOK)

WORK VISAS: 9(G) PRE-ARRANGED EMPLOYEE COMMERCIAL VISA

The 9(g) or Pre-Arranged Employee Visa Commercial is the most common type of work
visa availed by foreign nationals engaged in gainful employment in the
Philippines. This visa entitles the holder multiple entries and exits into and out of
the country while working with a company registered or licensed to do business and
existing under Philippine laws. With the 9g visa, the foreigner is entitled to
legitimately work and stay in the country for a duration approved by the Bureau of
Immigration, which should correspond with his employment contract.
A requisite to this visa is the Alien Employment Permit (AEP), issued by the
Department of Labor and Employment (DOLE).
The whole visa processing (including the AEP) usually takes 2 – 3 months to process.
The AEP alone takes 2 – 3 weeks to process in the Labor Department upon
submission of the complete documentary requirements. While waiting for the
approval of the 9g visa, the applicant who wishes to stay in the country even with an
AEP, should continuously update his immigration status by extending his tourist
visa. An important point to remember is that we can only start the processing of the
AEP application when the employer-company has already secured its local/city
business permit.
If the foreign employee is required to start working immediately even while the the
visa is in process, a Provisional Work Permit (PWP) can be an alternative option. The
PWP is a document, which authorizes the foreigner to start working even while the
AEP or 9g visa is still in process. It can be filed as soon as the AEP application is filed
and can be obtained after 2 weeks.

9(G) VISA SERVICE COMMERCIAL PACKAGE

1. Tax Identification Number (TIN) application with the Bureau of Internal

Revenue (BIR)
 2. Alien Employment Permit (AEP) application with the Department of Labor
and Employment
3. 9(g) Visa Application with the Bureau of Immigration
4. Alien Certificate of Registration Identity Card (ACR I-Card) Visa Application
with the Bureau of Immigration
Additionally, holders of 9g commercial visa who are promoted to a higher position
in the same company are exempted by the Bureau of Immigration from
downgrading to a 9a visitor visa and applying for another 9g visa, pursuant to Board
Resolution No. EED-15-01. This resolution is only effective provided that foreign
nationals:

 apply for a new Alien Employment Permit (AEP) corresponding to the new
position;
 apply for the extension of their 9g visas along with their new AEPs; and
 provide the Bureau of Immigration with a certified copy of their new AEPs.
WORK VISAS: 9(G) PRE-ARRANGED EMPLOYEE NON-COMMERCIAL
VISA
Foreign nationals who are engaged in missionary, social, rehabilitation, and medical
mission can apply for the 9(g) or Pre-Arranged Employee Visa Non- Commercial Visa
(Missionary Visa). A locally registered company can serve as the Petitioner of the visa
application. The applicant national must be involved in the community immersion
project in a community or assigned location. The applicant must also not be
receiving or generating income from the local company.
The processing timeline for this visa application takes between 1 – 2 months from the
date of filing. The visa is valid for 1 year and renewable thereafter as long as the
engagement is existing.
We can facilitate your 9g visa non-commercial application, inclusive of the services
below:
WORK VISAS: SPECIAL NON-IMMIGRANT VISA OR 47(A)(2)
Section 47(A)(2) of the Philippine Immigration Act of 1940, as amended, allows the
President to admit as non-immigrants, foreign nationals who are coming for a
temporary period only, under conditions as he may prescribe. This consequently
paved the way for the creation of special visas, under special laws, for investors or
employees of PEZA and/or BOI-registered companies or those in the oil-drilling
industries.
This type of visa requires the employer’s sponsorship and is valid for the duration of
the contract/term of office or for one (1) year, whichever is shorter. It is a company-
specific visa that limits the percentage of foreign national employees to less than 5%
of the total workforce. Holders of this visa are exempted from ACR I-card
requirement.

9(G) VISA SERVICE NON-COMMERCIAL PACKAGE

1. Tax Identification Number (TIN) application with the Bureau of Internal

Revenue (BIR)
 2. Alien Employment Permit (AEP) application with the Department of Labor
and Employment
3. 47a2 Application with the Philippine Economic Zone Authority (PEZA)
WORK VISAS: SPECIAL NON-IMMIGRANT VISA UNDER E.O. 226, AS
AMENDED BY R.A. 8756 (ROHQ)
The Special Non-Immigrant Multiple Entry Visa is issued pursuant to Book III
Article 60 of Executive Order No. 226, as amended by Republic Act No. 8756, to
foreign personnel, their respective spouses, and unmarried children under twenty-
one (21) years of age, of regional or area headquarters of multinational
companies. The visa shall be valid for a period of three (3) years to enter the
Philippines or equivalent with the applicant’s employment contract with the
headquarters.
To qualify for the visa, the foreigner-applicant must be an EXECUTIVE of the
applicant-company, will work EXCLUSIVELY for applicant’s regional or area
headquarters or regional operating headquarters, will receive a salary, and will be
paid by the headquarters in the Philippines an amount equivalent to at least twelve
thousand United States Dollars (US$12,000), or the equivalent in other foreign
currencies, per annum. This will have to be certified under oath by a responsible
officer of the applicant-company.
The processing time usually takes about 3 – 4 weeks from the date of application in
the Bureau of Immigration.
On top of the multiple entry privilege, the visa holder shall also have the benefit of
getting the following incentives:

1. Exemption from payment of all fees due under immigration and alien
registration laws;
2. Exemption from securing alien certificates of registration (or ACR I-Card);
3. Exemption from obtaining emigration clearance certificates (or ECC)
4. Exemption from all types of clearance required by any government department
or agency, except upon final departure from the Philippines (including AEP
from DOLE).
5. Withholding tax of 15% on compensation income.
6. Tax and duty free importation of personal and household effects
7. Travel tax exemption
WORK VISAS: SPECIAL WORK PERMIT (SWP)
The Special Work Permit (SWP) is a work permit intended for short term
assignments/employment of up to 6 months. A locally registered company must be
willing to serve as the Petitioner. The SWP is good for 3 months during the initial
application and extendible for another 3 months. During the course of the SWP
validity, the status of the foreign national remains as tourist. Thus, tourist visa
extension must be undertaken if necessary.
The approval of the SWP normally takes between 2 – 3 weeks. Upon issuance, the
Bureau of Immigration will grant an Official SWP order of approval which will serve
as the permit to work.
PROVISIONAL WORK PERMIT (PWP)
A Provisional Work Permit (PWP) is issued by the Bureau of Immigration (BI) to
foreign nationals who currently hold temporary visitor visas but wish to commence
work in the Philippines while the approval of their employment visa application,
either the 9g or 9d, is in progress.
A PWP is normally valid for three (3) months from the date of issuance or until the
9g visa is issued, whichever comes first. Foreign nationals who intend to commence
employment while their Alien Employment Permit is pending for approval from the
Department of Labor and Employment (DOLE) must also secure the PWP to be
allowed to work in the country.
This work permit is extendible until a work visa has been approved.

ALIEN EMPLOYMENT PERMIT (AEP)

A foreign national who intends to work in the Philippines is required by the
government to secure an Alien Employment Permit (AEP) from the Department of
Labor and Employment (DOLE). This permit authorizes a foreign national to engage
in gainful activities provided that no domestic manpower is available for the
particular designation.
All foreign nationals are required to have an AEP if the intention of entry in the
Philippines is to engage in any gainful employment except those expressly
exempted by law. Holders of other functional visas such as Special Investors
Resident Visa (SIRV), Special Resident Retiree’s Visa (SRRV), Treaty Traders (9D)
Visa, or Special Non-Immigrant Visa (47A2) are also subject to an AEP.
Unlike the Special Work Permit (SWP), an AEP is for longer work assignments or
contracts. An AEP is initially valid for one (1) to five (5) years depending on the
duration of the contract and renewable for a maximum period of 5 years. This
should be filed personally or through the petitioning employer at the DOLE
Regional Office having jurisdiction over the principal place of business of the
petitioner. In case the foreign national is to be assigned to branch offices or
subsidiaries in a different location, the application must be made at the nearest Field
Office.
Are there any restrictions for working visas for foreigners in Phillipines?

YES. THE FOREIGNER CAN ONLY ENGAGE IN THE KINF OF WORK AS

PERMITTED BY THE VISA.

Can foreigners obtain working visas without sponsorship of a company?

YES. CERTIFICATE OF EXCLUSIONS DOLE DO no. 186 series of 2017

Are there any limits on working visas for foreigners?

How long does it take for working visas to be organised?

Once documents are all submitted, depending on the kind of visa

How long do working visas last?

1year and renewable every year.

What is the process for renewing a working visa?

Pay additional fee AND LIST OF REQUIREMENT IN THE BI WEBSITE

What is the cost for a working visa?

Government fees 9k TO 12K per year and additional 4k TO 6K for another year or
any fraction thereof DEPENDING ON THE KIND OF VISA

Are there any other visas that can be used for foreigners? Can you explain them.

Refer to answer (types of VISA)

What happens if you breach your working visa?

Normally, cancellation of the AEP (9G) then penalty of 10,000 per year WORST IS
DEPORTED

Employees
What is the law that governs employment in the Philippines?

Labor Code of the Philippines, Republic Act No. 8042, Otherwise Known as
the Migrant Workers and Overseas Filipinos Act of 1995,as amended, Rules and
Regulations issued by DOLE with regard to seafarers, land based OCWs.

Can you explain workers rights in the Phillipines?

- minimum wage
Non- Wage Order
Wag Agricultur
Wage
Regio e e Coverag Implementi
Increase/CO Date of Date of Date of
n Orde Minimum e ng Rules
LA Issuanc Publicatio Effectivit
r Wage
Rate e n y

NCR- ₱21.00/day ₱512.00 Minimum Septemb September October Issued –

21 basic wage (₱502.00 Wage er 14, 20, 2017 05, 2017 September
increase basic wage Earners 2017 15, 2017
+ Philippine Approved –
₱10.00 Star September
COLA) 25, 2017
Published –
October 04,
2017

The Manila
Times

WITH
EXEMPTION
NCR Deadline for
filing:
December 18,
2017
NCR- ₱1,000.00 ₱3,500 Domestic Novembe December December Issued – Nov.
DW- increase workers r 20, 01, 2017 16, 2017 21, 2017
01 2017 Approved –
Philippine Dec. 07, 2017
Star Published –
Dec. 13, 2017

The Manila
Times

NO
EXEMPTION
ALLOWED

- How often does it change?

Once increase is allotted, can not be reviewed with one year. (2 years from the
implementation) except economic exisgencies.
- How much does it change? 7% a year?
(no fix amount but it bases from the inflation rate and other factors)
- Working ages
G.R. 18 and above
- Can children be employees?
Yes. 15 and above on certain industries. Special working permit is needed
- Working hours - is there a minimum?
40-48 hours per week.
- Holidays
12 Regular 3 Special
Holiday Pay Rules for an official regular holiday nationwide
 If the employee did not work, he/she shall be paid 100 percent of his/her
salary for that day.
  If the employee works during the regular holiday, the employee shall be paid
200 percent of his/her regular salary for that day for the first eight hours.
 If the employee works more than eight hours (overtime work), he/she shall
be paid an additional 30 percent of his/her hourly rate.
 If the employee works on his/her rest day, he/she shall be paid an additional
30 percent of his/her daily rate of 200 percent
 If the employee works more than eight hours (overtime work) during a
regular holiday that also falls on his/her rest day, he/she shall be paid an
additional 30 percent of his/her hourly rate.

Holiday Pay Rules for a Special non-working day

 If the employee did not work, no pay, unless there is a favorable company
policy, practice or collective bargaining agreement (CBA) granting payment
of wages on special days even if unworked.
 If the employee works during the Special Non-Working Day, the employee
shall be paid 100 percent of his/her regular salary plus 30 percent of the daily
rate
 If the employee works more than eight hours (overtime work), he/she shall
be paid an additional 30 percent of his/her hourly rate on said day
 for that day for the first eight hours.

Holiday Pay Rules for special working holidays

 For work performed, an employee is entitled only to his basic rate. No
premium pay is required since work performed on said days is considered
work on ordinary working days.

- Work contracts

- Maternity and paternity leave

Maternity leave is 60 to 78 days paid leave for paternity 7 days.
Under Article 133(a) of the Labor Code, “Every employer shall grant to any pregnant
woman employees who has rendered an aggregate service of at least six months for
the last twelve months, maternity leave of at least two weeks prior to the expected
date of delivery and another four weeks after normal delivery or abortion, with full
pay based on her regular or average weekly wages.”
From the above provision, a qualified pregnant woman employee shall be entitled
maternity leave of at least two weeks prior to expected date of delivery and another
four weeks after normal delivery or abortion. That’s a total of six weeks maternity
leave.
Leave extension
Maternity leave may be extended on account of illness arising out of the pregnancy,
delivery, abortion or miscarriage, which renders the woman unfit for work.
Extended maternity leave is without pay, but may be charged against any unused
leave credits.
Maternity Benefits under SSS Law
A pregnant woman member of SSS who has paid at least three monthly
contributions in the twelve-month period immediately preceding the semester of her
childbirth or miscarriage shall be paid a daily maternity benefit.
Amount
SSS maternity benefit shall be equivalent to 100% of the pregnant employee’s
average daily salary credit for 60 days, or 78 days in case of caesarian delivery.
Time of payment
The full payment of maternity benefits shall be advanced by the employer within 30
days from the filing of the maternity leave application.
Who makes the payment
The SSS shoulders the payment of maternity benefits. But the procedure is that the
payment is to be initially advanced by the employer, subject to immediate
reimbursement by SSS.
Checklist for Availment
1. The pregnant woman employee must have paid at least three monthly
contributions within the 12-month period immediately preceding the
semester of her childbirth or miscarriage.
2. She has given the required notification of her pregnancy through her
employer if employed, or to the SSS if separated, voluntary or self-employed
member.
“3-monthly Contribution” Illustration
To avail of maternity benefits, the woman employee must have paid at least three
monthly contributions within the 12-month period immediately preceding the
semester of her childbirth or miscarriage.
 A semester refers to two consecutive quarters ending in the quarter of
contingency;
 A quarter refers to three consecutive months ending March, June, September
or December.
To illustrate, assume that the projected date of delivery is March 2010.
1. The semester of childbirth would be from October 2009 to March 2010. This is
called the semester of contingency.
2. Count 12 months backwards starting from the month immediately before the
semester of contingency, which is September 2009.
3. Hence, the 12-month period immediately preceding the semester of childbirth
or miscarriage is from October 2008 to September 2009.
4. To avail of the benefits, the employee must have paid at least 3 monthly
contributions during this period.
Note that this requirement supersedes Article 133, which requires that the woman
employees must have rendered an aggregate service of at least six months for the
last twelve months.
Valid marriage not required
Unlike in paternity leave where valid marriage is a requisite for availment, the
existence of a valid marriage is not required to avail of maternity leave benefits.
Limitation on Availment
Entitlement to maternity leave under the Labor Code and maternity benefits under
the SSS Law applies only for the first four delivery.
Paternity Leave Benefits
Paternity leave is a form of parental leave. The other form of parental leave is the
Maternity Leave.
Paternity leave refers to the benefits granted to a married male employee in the
private and public sectors allowing him to take a leave for 7 days, with full pay, for
the first 4 deliveries of his legitimate spouse with whom he is cohabiting.
Conditions for Entitlement to Paternity Leave
1. The employee is lawfully married;
2. He is cohabiting with his legitimate wife;
3. His wife is pregnant or has delivered a child or suffered a miscarriage or
abortion;
4. Must be of the first four deliveries;
5. The employer is notified within reasonable time of the pregnancy and of date
of expected delivery (not required in case of abortion or miscarriage).
When Paternity Leave may be Availed of
The paternity benefit may be availed of before, during or after delivery, provided the
total number of days does not exceed 7 working days. For example, the employee
may take a leave of 2 days before delivery, 1 day during delivery, and another 4 days
after delivery.
However, the benefit must be availed of not later than 60 days after date of delivery.
Limitation
The benefit may be availed of only for the first four deliveries.
Commutability to Cash
Paternity leave is not commutable to cash if not availed of.

- Religious obligations
G.R None. Exception on the choice of restday may be compromised.

- Health care
- Does employer have to pay? If so, how much?
Philhealth Check table

- Pensions
- Does employer have to pay? If so, how much?
None.

- Social insurance
- Does employer have to pay? If so, how much?

SSS see table SSS contributions for employers

- Public holidays
- Are employees paid for these holidays?
Please check rules on holiday pay.

- Do women have different rights to men?

None. But women has more benefits than men.
Maternity, VAWC leave, Gynaecological Leave etc.,

- Termination of employees - is there any termination payments?

For legally terminated employees none. For illegally terminated employee yes, a
separation pay of 1 month per year of service.

Foreigners as employees, can they:

- work in any role or are they restricted to management roles?
Alien Employment Permit

An Alien Employment Permit (AEP) authorizes a foreign national to work in the Philippines. Though not a work permit, AEP is an important legal document
required to secure a work visa in the country.

Some foreign nationals are exempted from obtaining an AEP. These include:

 All members of the diplomatic service and foreign government officials;

 Owners and representatives of foreign principals whose companies are accredited by Philippines Overseas Employment Administration (POEA);
and
 Permanent resident foreign nationals and probationary or temporary resident visa holders under the Philippines’ immigration law.

RELATED: Payroll and Human Resources Services from Dezan Shira & Associates

Besides, foreign nationals working in the Philippines whose employers are located abroad, or those who do not have an employer are also excluded from
securing an AEP.

An AEP is valid for a year, or for the complete duration of the employment contract not exceeding three years. However, the issued AEP is valid only for the
position and company that it was secured for. A new AEP must be secured in the event an employee assumes a new job position within the same company,
or joins a new company.

The application for an AEP may be filed by the employer or the foreign nationals themselves.

Documents required for applying for an AEP:

 Application form;
 Photocopy of employee’s passport with valid visa;
 All documents related to the contract of employment;
 Photocopy of current AEP (in cases of reissue); and
 Photocopy of mayor’s permit or photocopy of business permit.

Pre-arranged Employment Visa or 9(G) Visa

The most common type of work visa issued in the Philippines is the 9 (G) visa, also known as the Pre-arranged Employment Visa. It allows employers in the
country to employ foreign nationals with skills, qualifications, and experience that may be in short supply in the country. The issuance of the 9(G) visa falls
within the competences of the BI.

A 9(G) visa is applied through an employer’s sponsorship. Therefore, securing a job with a Philippines-based company is a prerequisite. Further, applicants
are also required to obtain an AEP before securing a 9(G)-work visa.

It is important for applicants to note that a 9(G) holder may only work for the company that has sponsored his/her work visa. In the case of change of
employer, the 9(G) status is downgraded to a tourist visa, and foreign workers are required to make a new work visa application.

A 9(G) is valid for an initial period of one, two, or three years, and can be extended up to three years at a time, depending on the duration of the employment
contract. The validity, however, cannot exceed the period granted under the AEP issued by the DOLE. The visa can be renewed multiple times.

Documents required for applying for a 9(G) Visa

 A Notarized Certification of Number of Foreign and Filipino Employees of the employer;

 Application form;
 Photocopy of employment contract, Securities and Exchange Commission (SEC) certification, and Articles of Incorporation (AOI);
 A certified true copy of AEP from DOLE;
 Original newspaper clipping showing publication of AEP application by DOLE;
 BI clearance certificate;
 Alien certificate of registration;
  Applicant’s passport; and
 Other documents supporting the employment of the applicant.

Treaty Trader’s Visa or 9 (D) Visa

A 9 (D) Visa or Treaty Trader’s Visa is for foreign nationals belonging to countries that have a bilateral trade agreement with the Philippines. Currently, the
Philippines has such an agreement with the United States, Japan, and Germany.

To qualify for a 9 (D) Visa, foreign nationals must prove that:

 They or their employers are engaged in substantial trade, involving investment of at least US$120,000 between the Philippines and their country
of origin;
 They intend to leave the Philippines upon the completion or termination of their work contract;
 They hold the same nationality as their employer or company’s major shareholder; and
 They hold a position of a supervisor or executive in the company;

The Treaty Trader’s Visa is valid for up to two years.

Other employment permits

 Provisionary Work Permit

The Philippines offers expatriates an option to work in the country even if their work visa (9D or 9G) has not yet been issued through a Provisionary Work
Permit (PWP). A PWP is issued to foreigners who already have their Alien Employment Permit (AEP) and whose work visa application is pending approval.

A PWP is valid for up to six months from the date of issuance. Therefore, applicants must secure their work visa before the end of this period.

 Special Work Permit

In the case of short term work contracts that are of six months or less, expatriates are only required to apply for a Special Work Permit (SWP) with the BI.
Applicants may include musical artists, performers, professional athletes, or other non-citizens provide temporary services in the country.

An SWP allows expatriates to work under a Tourist Visa (9A), provided that the validity of the contract is only for up to three months. The visa is extendable
for a maximum period of three months.

- Is there a minimum wage that needs to be paid?

YES, at least 12kUSD per year.

- Do they have any different rights to locals?

G.R. No

Are employees paid monthly?

May be Daily paid or monthly paid.

Property and real estate:

What is the law the governs property and real estate?

Can foreigners own property and real estate in Phillipines?

What are the different land titles in the Phillipines?

Are there restrictions on buying land to foreigners?

Are there restrictions on leasing land to foreigners?

What are the common traps that investors fall into?

What is the stamp duty charge or land tax on buying property or real estate ?

Contracts:
What is the law that governs contracts in the Phillipines?
G.R Civil Law of the Philippines on the Law on Contracts

What are the rules surrounding contracts?

G.R. Art. 1305. A contract is a meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some service. (1254a)
Art. 1306. The contracting parties may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law,
morals, good customs, public order, or public policy.

What are the elements fo a contract? Eg: Intention, consideration, etc...

A contract is a meeting of the minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some services. A
contract is also defined as “a juridical convention manifested in legal form, by virtue
of which one or more persons bind themselves in favor of another or others, or
reciprocally, to the fulfillment of a prestation to give, to do, or not to do.” A contract
binds both contracting parties and has the force of law between them.
There are different kinds of contracts and there may be a host of additional
provisions to a basic contract. These flavors and add-ons will be further discussed in
this series on contracts. Right now, let’s start with the basics – the 3 elements or
requisites of a contract. There can be no contract unless the following requisites are
present:
(1) consent of the contracting parties;
(2) object certain which is the subject matter of the contract; and
(3) cause of the obligation which is established.
Consent. Contracts are generally perfected by mere consent, which is the reason
why there’s such a thing as oral contracts. It’s a meeting of the minds between the
parties: there’s a definite offer by one person and there’s an absolute acceptance by
another.
Subject Matter. A thing, right or service may be the object or subject matter of a
contract. All things that are outside the commerce of man (e.g., the moon) may not
be the object of a contract. Rights that are transmissible (e.g., the right to possess a
real property) may be the subject of a contract. Services, on the other hand, must not
be contrary to law, morals, good customs, public order of public policy (e.g., services
of an assassin or a prostitute).
Cause. The cause varies according to the type of contracts: (a) for onerous contracts,
the cause is the promise of a thing or service by the other; (b) for remunatory
contracts, the cause is the service or benefit which is being remunerated; and (c) for
contracts of pure beneficence, the cause is the mere liberality of the benefactor. These
concepts may appear alien, but since this is merely a brief discussion, suffice it to
state that a “cause” is technically different from a contract’s object (or subject matter,
as discussed above) or motive.
These three requisites are important because there’s no perfected contract without
them.

Can English be used in contracts or must it be completed in Filipino?

YES. The Philippines has two official languages, Filipino and English.

What are the restrictions to entering into a contract?

1. Consent
2. Capacity
3. Form
4. Object
 (1) Contracting parties' consent;

 (2) subject matter of the contract; and

 (3) the cause of the obligation.
 The Basic Elements of Contracts

 Consent

 In general, when a consent is given, the contract is considered perfected. It

can be deemed an oral contract that binds both contracting parties. One
person must have a definite offer and the other must have an absolute
acceptance of the offer.
 Object of the Agreement

 The subject matter refers to the object of the contract. If a thing is deemed
outside the commerce of man, it will not be accepted as the object of the
contract. Contracts are made to transfer the rights of property, render services
and others. However, the object of the contract must not be contrary to law,
good customs, morals and public order.
 Consideration

 The cause of the contract will be based on the type of contracts. For instance,
onerous contract's cause is the promise of service or thing by the other person.
Remunatory contract's cause is the benefit or service, which is being
remunerated. For contracts of pure beneficence, the cause is the benefactor's
liberality. The cause can only be defined based on the nature of the contract.
What are the rights if one party breaches the contract?

Remedies for a Breach of Contract

When an individual or business breaches a contract, the other party to the agreement
is entitled to relief (or a "remedy") under the law. The main remedies for a breach of
contract are:
1. Damages,
2. Specific Performance, or
3. Cancellation and Restitution
Damages
The payment of damages -- payment in one form or another -- is the most common
remedy for a breach of contract. There are many kinds of damages, including the
following:
1. Compensatory damages aim to put the non-breaching party in the position
that they had been if the breach had not occurred.
2. Punitive damages are payments that the breaching party must make, above
and beyond the point that would fully compensate the non-breaching party.
Punitive damages are meant to punish a wrongful party for particularly
wrongful acts, and are rarely awarded in the business contracts setting.
3. Nominal damages are token damages awarded when a breach occurred, but
no actual money loss to the non-breaching party was proven.
4. Liquidated damages are specific damages that were previously identified by
the parties in the contract itself, in the event that the contract is breached.
Liquidated damages should be a reasonable estimate of actual damages that
might result from a breach.
Specific Performance
If damages are inadequate as a legal remedy, the non-breaching party may seek an
alternative remedy called specific performance. Specific performance is best described
as the breaching party's court-ordered performance of duty under the contract.
Specific performance may be used as a remedy for breach of contract if the subject
matter of the agreement is rare or unique, and damages would not suffice to place
the non-breaching party in as good a position as they would have been had the
breach not occurred.
Cancellation and Restitution
A non-breaching party may cancel the contract and sue for restitution if the non-
breaching party has given a benefit to the breaching party. "Restitution" as a contract
remedy means that the non-breaching party is put back in the position it was in prior
to the breach, while "cancellation" of the contract voids the contract and relieves all
parties of any obligation under the agreement.

Who cannot enter into a contract? eg: Children? Intoxicated persons?

G.R. Incapacitated person such as minor, insane, deprived of reason, freedom and
freewill.
Taxes:
Companies:
What is the law that governs taxes in Phillipines?

What is the company tax rate in the Phillipines?

Are there any tax discounts for companies? If so, what are they ?

What are the rules for book keeping?

- Language restriction?

Is the tax based on world wide income?

Is there a double tax relief with other countries?

When is company tax paid?

When is the tax calendar?

How is tax paid?

Individuals:

What is the law that governs taxes for individuals in the Phillipines?

Who is considered a tax resident?

Is there an amount of days per year someone needs to be in the country to have a tax
liability?

What is the tax rate for individuals in the Phillipines?

Is the tax rate the same for all income earners?

Is tax on world wide income?

Is there a double tax relief ?

When is tax to be paid?

How is tax paid?