The country’s corporate regulator is warning foreigners against engaging in retail trade in the country, after receiving reports some entities owned or partly owned by foreigners are doing business without proper registration.

In an advisory posted on its Web site on Monday, the Securities and Exchange Commission (SEC) said under Republic Act No. 8762 (RA 8762), otherwise known as the Retail Trade Liberalization Act of 2000, only retail trade enterprises with paid-up capital of less than $2.5 million are “exclusively reserved for Filipino citizens.”

The SEC described retail trade as “any act, occupation, or calling of habitually selling direct to the general public merchandise, commodities, or goods for consumption.”

Under RA 8762, foreigners may only be fully involved when the paid-up capital exceeds $2.5 million, or when the investment for establishing a store is not less than $830,000. Exception is also allowed for when the business specializes in high end or luxury products, given that the paid-up capital per store is not lower than $250,000.

Those found guilty of the act may be imprisoned for six to eight years, aside from paying a fine of P1 million to P20 million. The penalties will be imposed on partners, directors, managers, officers, and the president of association or corporations found guilty of the law.

In cases involving foreign nationals, the SEC may order their deportation immediately after the sentence for the crime has been served.

The SEC also reminded the public of Section 2-A of Commonwealth Act No. 108, also known as the Anti-Dummy Law of the Philippines.

Here, aliens are prohibited employment in any corporation or association “expressly reserved by the Constitution or the law to the citizens of the Philippines or corporations or associations at least 60% of the capital of which is owned by such citizens.”

The ban on employment from such entities, as well as those engaged in nationalized activities, applies even to minor, clerical, or non-control positions. This is to prevent foreigners from intervening in the management, operation, administration, or control of the entity.

The SEC urged the public to make reports on any unauthorized activities with the agency’s Enforcement and Investment Protection Department. — Arra B. Francia