Section 4November 23, 1999, Sec./Art. 4

Book III of the same Code is hereby further amended by adding a new chapter designated as Chapter II to read as follows:

"CHAPTER II

"LICENSING OF REGIONAL OPERATING HEADQUARTERS

"Art. 59. Qualification of Regional Operating Headquarters (ROHQs). - Any foreign business entity formed, organized and existing under any laws other than those of the Philippines may establish a regional operating headquarters in the Philippines to service its own affiliates, subsidiaries or branches in the Philippines, in the Asia-Pacific Region and other foreign markets. ROHQs will be allowed to derive income by performing the qualifying services enumerated under paragraph (b) 1 hereunder.

ROHQs of non-banking and non-financial institutions are required to secure a license from the Securities and Exchange Commission, upon the favorable recommendation of the Board of Investments. ROHQs of banking and financial institutions, on the other hand, are required to secure licenses from the Securities and Exchange Commission and the Bangko Sentral ng Pilipinas, upon the favorable recommendation of the Board of Investments.

"The Securities and Exchange Commission and the Bangko Sentral ng Pilipinas shall, within thirty (30) days from the effectivity of this Code, issue the implementing rules and regulations.

"The following minimum requirements shall 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 operating headquarters in the Philippines, specifying that:

"(1) The regional operating headquarters may engage in any of the following qualifying services:

- General administration and planning;

- Business planning and coordination;

- Sourcing/procurement of raw materials and components;

- Corporate finance advisory services;

- Marketing control and sales promotion;

- Training and personnel management;

- Logistics services;

- Research and development services, and product development;

- Technical support and maintenance;

- Data processing and communication; and

- Business development.

"ROHQs are prohibited from offering qualifying services to entities other than their affiliates, branches or subsidiaries, as declared in their registration with the Securities and Exchange Commission nor shall they be allowed to directly and indirectly solicit or market goods and services whether on behalf of their mother company, branches, affiliates, subsidiaries or any other company.

"(2) The regional operating headquarters shall notify the Board of Investments, the Securities and Exchange Commission and the Bangko Sentral ng Pilipinas, as the case may be, of any decision to close down or suspend operations of its headquarters at least fifteen (15) days before the same is effected.

"(c) An undertaking that the multinational company will initially remit into the country such amount as may be necessary to cover its operations in the Philippines but which amount will not be less than Two hundred thousand United States dollars ($200,000) or its equivalent in other foreign currencies.

"Within thirty (30) days from receipt of certificate of registration, the multinational company will submit to the Securities and Exchange Commission a certificate of inward remittance from a local bank showing that it has remitted to the Philippines the amount of at least Two hundred thousand United States dollars ($200,000) or its equivalent in other foreign currencies and converted the same to Philippine currency.

"(d) Any violation by the regional operating headquarters of a multinational company of the provisions of this Code, or its implementing rules and regulations, or other terms and conditions of its registration, or any provision of existing laws, shall constitute a sufficient cause for the cancellation of its license or registration."