A new law that would further open up the Philippine retail trade sector to more foreign trade businesses by lowering their required capital was recently enacted in the Philippines.
Republic Act (RA) 11595, which amends RA 8762, also known as the Retail Liberalization Act of 2000, was signed into law by President Rodrigo Roa Duterte on 10 December 2021.
Under the law, a foreign retailer shall have a minimum paid-up capital of PHP25 million. The current law sets the required capital at USD2.5 million or PHP119.67 million.
The law also mandates the entry of foreign retailers coming from countries that do not prohibit the entry of Filipino retailers.
In the case of foreign retailers engaged in retail trade through more than one physical store, the minimum investment per store must be at least PHP10 million “provided that this requirement shall not apply to foreign investors and foreign retailers who are legitimately engaged in retail trade and were not required to comply with the minimum investment per store at the time of the effectivity of this Act.”
The Department of Trade and Industry, Securities and Exchange Commission, and the National Economic and Development Authority shall review the required minimum paid-up capital every three years and their recommendations should be submitted to Congress.
Foreign retailers are also encouraged to have a stock inventory of products that are made in the Philippines.
"I hope that this new law would encourage the entry of more investors and further boost economic recovery amid Covid-19 pandemic", said Philippine Ambassador to Norway, Enrico T. Fos.