Republic Act 8762, also known as Retail Trade Liberalization Act of 2000, was enacted to promote consumer welfare by attracting, promoting, and welcoming productive investments of foreign nationals and Filipinos overseas to stimulate economic growth, and enable Philippine goods and services to become globally competitive through the liberalization of the retail trade sector.
The law defines retail trade as any act, occupation or calling of habitually selling merchandise, commodities, or goods directly to the general public for consumption.
The law shall not apply to the following:
1. Sales by a manufacturer, processor, laborer or worker, to the general public of products manufactured, processed or produced by him if his capital does not exceed One hundred thousand pesos (P100,000)
2. Sales by a farmer or agriculturist selling the products of his farm
3. Sales in restaurant operations by a hotel owner or inn-keeper irrespective of the amount of capital provided that, the restaurant is incidental to the hotel business
4. Sales that are limited only to products manufactured, processed or assembled by a manufacturer through a single outlet, irrespective of capitalization
Foreign-owned partnerships, associations, and corporations formed and organized under the laws of the Philippines may, upon registration with the SEC and/or DTI, or in the case of single proprietorship with DTI, engage or invest in the retail trade business, subject to the following categories:
1. Category A – Enterprise with paid-up capital equivalent in Philippine Pesos to less that US$2.5 Million is reserved exclusively for Filipino citizens and corporations owned by Filipino citizens
2. Category B – Enterprise with a minimum paid-up capital equivalent in Philippine Pesos to US$7.5 Million may be wholly owned by foreigners except for the first two (2) years after the effectivity of this Act wherein foreign participation shall be limited to not more that sixty percent (60%) of total equity.
3. Category C – Enterprise with a paid-up capital equivalent in Philippine Pesos to US$7.5 Million or more may be wholly owned by foreigners, provided, however, that in no case shall the investments for establishing a store in Categories B and C be less that the equivalent in Philippine Pesos of Eight hundred thirty thousand US Dollars (US$830,000).
4. Category D – Enterprise especializing in high-end or luxury products with paid up capital equivalent in Philippine Pesos to Two hundred Fifty thousand US Dollars (US$250,000) per store may be wholly owned by foreigners.
Under Sec. 4 of the law, natural-born citizens of the Philippines who have lost their Philippine citizenship but who reside in the Philippines, are granted the same rights as Filipino citizens in the retail trade business.
The Legal Department, Board of Investment (BOI) Industry and Investments Bldg. 385 Sen. Gil Puyat Ave., Makati City Tel. Nos. 897-6682 loc. 314; 897-3084; 896-7895
Fax No. 895-3978
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