10/3/2014

R.A. 8762

Today is Friday, October 03, 2014

REPUBLIC ACT NO. 8762

AN ACT LIBERALIZING THE RETAIL TRADE BUSINESS, REPEALING FOR THE PURPOSE REALING FOR
THE PURPOSE REPUBLIC ACT NO. 1180, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines of Representatives of the Philippines
in Congress assembled:
Section 1. Title This Act shall be known as the "Retail Trade Liberalization Act of 2000."
Section 2. Declaration of Policy. It is the policy of the State to promote consumer welfare in attracting promoting
and welcoming productive investment that will bring down price for the Filipino consumer, create more jobs, promote
tourism, assist small manufacturers, stimulate economic growth and enable Philippine goods and services to
become globally competitive through the liberalization of the retail trade sector.
Pursuant to this policy, the Philippine retail industry is hereby liberalized to encourage Filipino and competitive retail
trade sector in the interest of empower the Filipino consumer through lower prices, higher quality goods, better
services and wider choices.
Section 3. Definition. - As used in this Act.
(1) "Retail trade" shall mean any act, occupation or calling of habitually selling direct to the general public
merchandise, commodities or good for consumption, but the restriction of this law shall not apply to the
following:
(a) Sales by manufacturer, processor, laborer, or worker, to the general public the products
manufactured, processed or products by him if his capital dose not exceed One hundred thousand
pesos(100,000.00);
(b) Sales by a farmer or agriculturist selling the products of his farm;
(c) Sales in restaurant operations by a hotel owner or inn-keeper irrespective of the amount capital:
provided, that the restaurant is incidental to the hotel business; and
(d) Sales which are limited only to products manufactured, processed or assembled by a
manufactured, processed or assembled by a manufacturer though a single outlet, irrespective of
capitalization.
(2) "High-end or luxury goods" shall refer to goods which are not necessary for life maintenance and whose
demand is generated in large part by the higher income groups. Luxury goods shall include, but are not
limited to products such as; jewelry, branded or designer clothing and footwear, wearing apparel, leisure and
sporting goods, electronics and other personal effects.
Section 4. Treatment of Natural Born Citizen Who Has Lost His Philippine Citizenship. - A natural-born citizen of the
Philippines who resides in the Philippines shall be granted the same rights as Filipino citizens for purposes of this
Act.
Section 5. Foreign Equity Participation. - Foreign-owned partnerships, associations and corporation formed and
organized under the laws of the Philippines may, upon registration with the Securities and Exchange Commission
(SEC) and the Department of Trade and Industry (DTI), or in case of foreign owned single proprietorships, with the
DTI, Engage or invest in the retail trade business, subject to the following categories.
Category A Enterprises with paid-up capital of the equivalent in Philippine Peso of the than Two
million five hundred thousand US dollars (US$2,500,000.00) shall be reserved exclusively for Filipino
citizens and corporations wholly owned by Filipino citizens.
Category B Enterprises with a minimum paid-up capital of the equivalent in Philippine Pesos of two
million five hundred thousand US dollar (US$2,500,000.00) but less than Seven million five hundred
thousand US dollars (US$7,500,000.00) 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 than sixty
http://www.lawphil.net/statutes/repacts/ra2000/ra_8762_2000.html

1/3

10/3/2014

R.A. 8762

percent (60%) of total equity.

Category C Enterprises with a paid-up capital of the equivalent in Philippine Pesos of Seven million
five hundred thousand US dollars (US$7,500,000.00), or more may be wholly owned by foreigners:
Provided, however, That in no case shall the investments for establishing a store in vestments for
establishing a store in Categories B and C be less than the equivalent in Philippine pesos of Eight
hundred thirty thousand US dollars (US$830,000.00).
Category D Enterprises specializing in high-end or luxury products with a paid-up capital of the
equivalent in Philippine Pesos of Two hundred fifty thousand US dollars (US$250,000.00) per store
may be wholly owned by foreigners.
The foreign investor shall be required to maintain in the Philippines the full amount of the prescribed minimum
capital unless the foreign investor has notified the SEC and the DTI of its intention to repatriate its capital and cease
operations in the Philippines. The actual use in Philippine operations of the inwardly remitted minimum capital
requirement shall be monitored by the SEC.
Failure to maintain the full amount of the prescribed minimum capital prior to notification of the SEC and the DTI,
shall subject the foreign investor to penalties or restrictions on any future trading activities/business in the
Philippines.
Foreign retail stores shall secure a certification from the Bangko Sentral ng Pilipinas (BSP) and the DTI, which will
verify or confirm inward remittance of the minimum required capital investments.
Section 6. Foreign Investors Acquiring Shares of Stock of Local Retailers. - Foreign investors acquiring shares from
existing retail stores whether or not publicly listed whose net worth is in the excess of the peso equivalent of Two
million five hundred thousand US dollars (US$2,500,000.00) may purchase only up to a maximum of sixty percent
(60%) of the equity thereof within the first two (2) years from the effectivity of this Act and thereafter, they may
acquire the remaining percentage consistent with the allowable foreign participation as herein provided.
Section 7. Public Offering of Shares of Stock. All retail trade enterprises under Categories B and C in which
foreign ownership exceeds eighty percent (80%) of equity shall offer a minimum of thirty percent (30%) of their
equity to the public through any stock exchange in the Philippine within eight (8) years from their start of operations.
Section 8. Qualification of Foreign Retailers. - No foreign retailer shall be allowed to engage in retail trade in the
Philippine unless all the following qualifications are met:
(a) A minimum of Two hundred million US dollar (US$200,000,000.00) net worth in its parent corporation for
Categories B and C, and Fifty million US dollar (US$50,000,000.00) net worth in its parent corporation for
category D;
(b) (5) retailing branches or franchises in operation anywhere around the word unless such retailer has at
least one (1) store capitalized at a minimum of Twenty-five million US dollars (US$25,000,000.00);
(c) Five (5)-year track record in retailing; and
(d) Only nationals from, or juridical entities formed or incorporated in Countries which allow the entry of
Filipino retailers shall be allowed to engage in retail trade in the Philippines.
The DTI is hereby authorized to pre-qualify all foreign retailers, subject to the provisions of this Act, before they are
allowed to conduct business in the Philippine.
The DTI shall keep a record of Qualified foreign retailers who may, upon compliance with law, establish retail stores
in the Philippine. It shall ensure that parent retail trading company of the foreign investor complies with the
qualifications on capitalization and track record prescribed in this section
The Inter- Agency Committee on Tariff and Related Matters Authority (NEDA) Board shall formulate and regularly
update a list of foreign retailers of high-end or luxury goods and render an annual report on the same to Congress.
Section 9. Promotion of Locally Manufactured Products. - For ten (10) year after the effectivity of this Act, at least
thirty percent (30%) of the aggregate cost of the stock inventory of foreign retailers falling under Categories B and C
and ten percent (10%) for category D shall be made in the Philippines.
Section 10. Prohibited Activities of Qualified Foreign Retailers. Qualified foreign retailers shall not be allowed to
engage in certain retailing activities outside their accredited stores through the use of mobile or rolling stores or
carts, the use of sales representatives, door-to-door selling, restaurants and sari-sari stores and such other similar
retailing activities: Provided, That a detailed list of prohibited activities shall hereafter be formulated by the DTI
http://www.lawphil.net/statutes/repacts/ra2000/ra_8762_2000.html

2/3

10/3/2014

R.A. 8762

Section 11. Implementing Agency: Rule and Regulations. The monitoring and regulation of foreign sole
proprietorships, partnerships, associations or corporations allowed to engage in retail trade shall be the
responsibility of the DTI. This shall include resolution of conflicts.
The DTI, in coordination with the SEC, the NEDA and the BSP, shall formulate and issue the implementing rules
and regulation necessary to implement this Act within ninety (90) days after its approval.
Section 12. Penalty Clause. - Any person who shall be Found guilty of Violation of any provision of this Act shall be
punished by imprisonment of not less that six (2) years and one (1) day but not more than eight (8) years, and a fine
of not less than One million pesos
(P1,000,000.00) but not more that Twenty million pesos (P20,000,000.00) In the case of associations, partnerships
or corporations, the penalty shall be imposed upon its partners, president, directors, manager and other officers
responsible for the violation. If the offender is not a citizen of the Philippines he shall be deported immediately after
service of sentence. If the Filipino of fender is a public officer or employee, he shall, in addition to the penalty
prescribed herein, suffer dismissal and permanent disqualification from public office
Section 13. Repealing Clause. Republic Act No. 1180, as amended, is hereby repealed. Republic Act No. 3018,
as amended, and all other laws, executive orders, rules and regulations or parts thereof inconsistent with this Act
are repealed or modified accordingly.
Section 14. Separability Clause. If any provisions of this Act shall be held unconstitutional, the other provisions
not otherwise affected thereby shall remain in force and effect.
Section 15. Effectivity. This act shall take effect fifteen (150 days after its approval and publication in at least two
(2) newspapers of general circulation in the Philippines.
Approved: March 07, 2000
(SGD.) JOSEPH E. ESTRADA
President of the Philippines
The Lawphil Project - Arellano Law Foundation

http://www.lawphil.net/statutes/repacts/ra2000/ra_8762_2000.html

3/3