|Carina C. Laforteza
||Lito Paolo T. Martin II
The enactment of Republic Act No. 10881 on August 16
2016 is set to make the Philippines a more attractive
destination for foreign investors in the financing industry.
This new legislation has lifted certain foreign equity
The law was enacted to attract and promote investment from
foreign nationals in activities that are deemed to
significantly contribute to industrialisation, socio-economic
development, and sustainable and inclusive growth.
Foreign investors can now wholly own adjustment, lending and
financial companies and investment houses. Under the previous
legislation, foreign investors were only allowed to own up to
49% in lending companies, up to 60% in financing companies and
investment houses, and up to 40% in adjustment companies.
Notwithstanding these significant amendments, constitutional
limitations on foreign ownership of land remain in place. In
addition, the capitalisation rules for financing companies have
not been amended. However, the law now provides that the
Securities and Exchange Commission can adjust the minimum
paid-up levels if it deems this is warranted by its prudential
Carina C. Laforteza and Lito Paolo T. Martin II