House OKs Bill Allowing Foreigners to Practice Their Profession in the Philippines
The House of Representatives recently approved House Bill (HB) No. 300, an amendment for the Foreign Investments Act (FIA), which seeks to remove constraints on foreigners practicing their profession in the Philippines. The bill will enable more foreigners to pursue a career in the country and directly reduce the local hire threshold for businesses with foreign investors.
Members of the House of Representatives officially came down to a vote of 201 to 6 in favor of the newly proposed HB No. 300 during its third reading on 9 September, Monday.
The approved considerations will bring changes to Sections 4 and 8 of the Republic Act 7042 or the FIA, a law ruling foreign ventures in the Philippines.
The last time the FIA was renewed was 1996, and foreign business organizations publicly announced their support on the new changes to the FIA.
Under the new reform, the minimum paid-up capital requirement for foreign investors who own small to medium-sized businesses will be lowered to any amount less than $100,000. The employment threshold required for these companies will also be reduced to 15 local employees, a significant change from the previous minimum hire requirement of 50 local employees.
In addition to the initial progress, the bill eliminates the “practice of professions” from the coverage of the Foreign Investment Negative List, which classifies areas of investment or sectors of the country’s economy where foreign participation is regulated or banned.
According to Wes Gatchalian, Chairman of the House Committee on Trade and Industry, the bill is expected to bring more foreign investors to the Philippines, raise foreign exchange rates from exports, and lead to higher tax revenues.
“Ownership limitations as well as paid-up capital requirements effectively prevent smaller foreign entities with insufficiently large investments to open businesses in the Philippines,” Committee Chair Gatchalian said.
If passed as legislation, HB No. 300 will provide more proficient foreign specialists to work in the Philippines and increase the country’s productivity and competitiveness by enticing businesses with high-skilled professionals.
“By working with professionals from more advanced countries, Filipinos gain fresh perspective and new knowledge, broadening the skill set they may already have. It would be similar to sending Filipinos abroad on exchange programs at a lower cost and less brain drain,” declared House Committee on Economic Affairs Chairperson Sharon Garin.
Once enacted, the bill is expected to drive foreign investors to partner with local firms and increase the number of white-collar professionals in the local job market.