Article 13Supplement v1, p. 13

COMMERCIAL LAWS SUPPLEMENT

cancel the said license. In such cases, no injunction shall

issue without notice and hearing; and appeals and other

proceedings for review shall be filed directly with the

Supreme Court.

TITLE II General Provisions

ARTICLE 51. Mergers and Consolidations . — The provisions

of this Book Two shall apply to any merger, consolidation,

syndicate or any other combination of firms, associations,

partnership or other forms of business organization that

will result in ownership or control by persons or entities

that are not Philippine nationals or have foreign equity

participation, of more than forty per cent (40%) of the

outstanding capital of whatever organization results from

the

merger,

consolidation,

syndicate

or

other

combination.

ARTICLE 52. Local Government Action . — No agency,

instrumentality or political subdivision of the Government

shall take any action in conflict with or which will nullify

the provisions of Book Two of this Code, or any certificate

of authority granted hereunder.

ARTICLE 53. Automatic Registration . — Applications filed

under

this

Book

shall

be

considered

automatically

approved if not acted upon within ten (10) working days

from official acceptance thereof.

ARTICLE

54.

Publication

and Posting of Notices . —

Immediately after the application has been given due

course by the Board, the Secretary of the Board or any

official

designated

by

the

Board

shall

require

the

applicant to publish the notice of the action of the Board

thereon at his expense once in a newspaper of general

circulation in the province or city where the applicant has

its principal office, and post copies of said notice in

conspicuous places, in the office of the Board or in the

building where said office is located; setting forth in such

copies the name of the applicant, the business in which it

is engaged or proposes to engage or invest, and such

other data and information as may be required by the

Board. No approval or certificate shall be valid without

the publication and posting of notices as herein provided.

ARTICLE 55. Limited Authority to do Business . — When

appropriate,

the

Board

may

grant

permissible

investments or authority to do business under Book Two

of this Code for a limited period where the need to prove

economic viability of such activity warrants the issuance

of a temporary authorization.

ARTICLE

56.

Periodic

Reports .

—

The

Board

shall

periodically

check and verify compliance with these

provisions,

either

by

inspection

of the books or by

requiring regular reports from aliens or foreign firms,

domestic enterprises with foreign investments and new

entities licensed to do business under Article 48 of this

Code.

A summary of said reports shall be periodically submitted

by the Board to the President. For this purpose, the Board

may require other government agencies licensing and/or

regulating foreign enterprises or domestic firms with

foreign equity, to furnish the Board with reports on such

foreign investments.

ARTICLE 57. Penal Clause . — (1) Without prejudice to the

provisions of Articles 42 and 50 hereof a violation of any

provision of Books I and II of this Code, or of the terms

and

conditions

of

registration,

or

of

the

rules and

regulations promulgated pursuant thereto, or the act of

abetting or aiding in any manner any such violation, shall

be punished by a fine not to exceed one hundred

thousand pesos (P100,000.00) or imprisonment for not

more than ten (10) years, at the discretion of the Court.

(2)

No

official

or

employee

of

the

government, its

subdivisions or instrumentalities shall appear as counsel

for or act as agent or representative of, or in any manner

intervene or intercede, directly or indirectly, in behalf of

any party in any transaction with the Board regarding any

application under Books I and II of this Code. The penalty

for violation of this prohibition is the same as that

provided for in the preceding paragraph. If the offender is

an appointive official or employee, the maximum of the

penalty herein prescribed shall be imposed, and the

offender shall suffer the additional penalty of perpetual

disqualification from public office, without prejudice to

any administrative action against him.

(3) If the offense is committed by a juridical entity, its

president and/or other officials responsible therefor shall

be subject to the penalty prescribed above. If the offender

or the president/official, in cases where the offense was

committed by a juridical entity, is an alien, he shall be

deported without further proceedings on the part of the

Deportation Board in addition to the penalty herein

prescribed and shall, if naturalized, be automatically

denaturalized from the date his sentence becomes final.

(4) Payment of the tax due after apprehension shall not

constitute a valid defense in any prosecution for violation

of any provision of this Code.

BOOK III Incentives To Multinational Companies

Establishing Regional Or Area Headquarters And

Regional Operating Headquarters In The

Philippines

(as amended by RA No 8756)

CHAPTER I Licensing Of Regional Or Area Headquarters

ARTICLE

58.

Qualification

of

Regional

or

Area

Headquarters. — Any foreign business entity formed,

organized and existing under any laws other than those

of the Philippines whose purpose, as expressed in its

organizational documents or by resolution of its Board of

Directors or its equivalent, is to supervise, superintend,

inspect or coordinate its own affiliates, subsidiaries or

branches in the Asia-Pacific Region and other foreign

markets may establish a regional or area headquarters in

the Philippines, by securing a license therefor from the

Securities and Exchange Commission, upon the favorable

recommendation of the Board of Investments.

The Securities and Exchange Commission shall, within

thirty (30) days from the effectivity of this Code, issue the

implementing

rules

and

regulations.

The

following

minimum requirements shall, however, be complied with

by the said foreign entity:

(a) A certification from the Philippine Consulate/Embassy,

or

a

duly

authenticated

certification

from

the

Department of Trade and Industry or its equivalent in the

foreign firm's home country that said foreign firm is an

entity

engaged

in

international trade with affiliates,

subsidiaries or branch offices in the Asia-Pacific Region

and other foreign markets.

(b) A duly authenticated certification from the principal

officer of the foreign entity to the effect that the said

foreign

entity

has

been authorized by its Board of

Directors or governing body to establish its regional or

area headquarters in the Philippines, specifying that:

(1) The activities of the regional or area headquarters shall

be limited to acting as a supervisory, communications

and coordinating center for its subsidiaries, affiliates and

branches in the region;

(2) The regional or area headquarters will not derive any

income from sources within the Philippines and will not

participate in any manner in the management of any

subsidiary

or

branch

office

it

might

have

in

the

Philippines nor shall it solicit or market goods and

services whether on behalf of its mother company or its

branches, affiliates, subsidiaries or any other company;

and

(3) The regional or area headquarters shall notify the

Board of Investments and the Securities and Exchange

Commission of any decision to close down or suspend

operations of its headquarters at least fifteen (15) days

before the same is effected.

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