Amendments to the Retail Trade Liberalization Act of 2000
Reduction of capitalization and relaxation of pre-qualification requirements for foreign retail enterprises under R.A. No. 8762 as amended by R.A. No. 11595
R.A. No. 11595, signed into law on December 10, 2021 and took effect on January 21, 2022, introduced the amendments to the original Retail Trade Liberalization Act under R.A. No. 8762, the salient portions of which are comparatively reproduced as follows:
|R.A. No. 8762||R.A. No. 11595|
|Foreign Equity Participation||1. 100% Foreign Ownership allowed for enterprises with minimum paid up capital the Philippine Peso equivalent of USD 2,500,000.|
Per store/branch investment of the Philippine Peso equivalent of USD 830,000.
100 % Foreign Ownership allowed for enterprises specialized in high-end or luxury products with paid up capital the Philippine Peso equivalent of USD 250,000.
|100% Foreign Ownership allowed for enterprises with minimum paid up capital of Php 25,000,000. |
Per store/branch investment of Php 10,000,000 for more than one (1) physical store.
|Qualification of Foreign Retailers||1. Minimum of USD 200,000,000 net worth of parent corporation; USD 50,000,000 for enterprises specialized in high-end or luxury products; |
2. Five (5) retailing branches worldwide or at least one (1) store capitalized at a minimum of USD 25,000,000;
3. Five (5) year retailing track record;
4. A national from or juridical entity formed or incorporated in countries which allow the entry of Filipino retailers.
|No more qualifications.|
The distinction between a regular foreign retailer and an enterprise which specialized in high-end or luxury products have been omitted, which means that there will no longer be any difference between them
The revised implementing rules and regulations is currently being deliberated by the Department of Trade and Industry.
A copy of the republic act is attached with this advisory for your reference.
DISCLAIMER: The advisory is not a substitute for an expert opinion and is purely a general research that may have not considered the entirety of other related topics. Any tax and/or compliance advice is not intended or written by the author to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on by the regulatory bodies, or (ii) promoting, marketing, or recommending to another party any matters addressed herein.
The opinion or advice expressed in this advisory is based on the facts and circumstances gathered. Any inaccuracy in any of the assumptions set forth above may have the effect of changing all or part of this report, and this report may not apply. The advice is based on our interpretation of the provisions of the Code, the Revenue Regulations promulgated and issued by the tax bureau, BIR positions as set forth in published Revenue Rulings, other pronouncement, orders and circulars, and judicial decisions in effect on the date of this report, any of which could be changed at any time. Any such changes may be retroactive and could significantly modify the statements and opinions/ advice expressed herein In effect, this might render the advisory obsolete or incorrect in partial or in full. We undertake no obligation to advise you of changes that may hereafter be brought to our attention.
- New and Revised PFRSs for Annual Periods beginning on or after January 01,2023
- Further clarification of issues raised in transitory provisions for the VAT Zero-rate Incentives
- Significant Amendment to Glean from Revenue Memorandum Circular (RMC) No. 3-2023
- The Crux of R.A. 11934 or the SIM Registration Act
- Heads up on new revisions from the Insurance Commission re: On-site Examination and Off-site Verification Rules and Procedures