A MEASURE to change the foreign investments law by scrapping restrictions on the practice of professions and by lowering the workforce threshold of small and medium domestic businesses has been filed at the Senate.
Senate Bill No. 1424, filed by Senator Joseph “JV” G. Ejercito, would amend Republic Act (RA) 7042, the Foreign Investments Act (FIA) of 1991.
According to the FIA, foreigners can invest as much as 100% outlay, except in areas under the foreign investment negative list (FINL), most recently provided by Executive Order No. 98, which includes a prohibition on venturing into certain professions.
“This effectively discourages foreign professionals who would otherwise be allowed to practice here by virtue of reciprocity from coming in and sharing their ideas and technical know-how, contrary to the inclusive policy of the FIA,” Mr. Ejercito said in the explanatory note of the bill.
Under Section 1 of the proposed measure, the scope of the FIA would not include the practice of professions. This would be an addition to the present provision that exempts only banking and other financial institutions from the said law.
The amendment would drop the “practice of all professions” heading in the FINL, which lists 26 professions that have laws granting licenses to expats by virtue of reciprocity.
The professions include engineering, medicine, accountancy, architecture, law and teaching, among others.
A reciprocity provision allows the certification, exam permit or licensure of foreigners as long as the requirements and privileges under the laws of the foreign country are similar to those of the Philippines, and as long as Filipinos may practice the same profession in the foreign country.
Of the 26 professions listed in the FINL, only four professions do not have any reciprocity provision: environmental planning, forestry, master plumbing, fisheries, and criminology.
The FINL is replaced every two years and updated given existing laws and recommendations of concerned sectors.
The proposed amendments to the FIA would also allow foreigners to invest in small and medium domestic market enterprises with a minimum paid-in capital of $100,000 as long as they employ at least 15 workers.
A business of such capital, Mr. Ejercito pointed out in the same explanatory note, “cannot immediately sustain a labor force of 50 persons,” hence the need to lower the threshold.
Ponciano C. Manalo, Jr., Department of Trade and Industry Undersecretary for trade and investment promotions, said in a phone interview that the agency needs to study the bill first before he could comment. — KTDV
Source: BusinessWorld, 8 Sep 2013
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