Retail Trade Laws

Someone asked me, "I have a friend who...

wants to know when a foreigner can engage in retail trade? 

My answer is Retail Trade is legally reserved only for Filipinos under R.A. 1180, or the Retail Trade Nationalization Law. Foreigners cannot engage in retail business, not even thru corporations majority owned by Filipinos

Retail Trade is

- any act, occupation or calling

- of habitually selling

- direct to the general public

- merchandise, commodities or goods

- for consumption.

(Sec 3(1) RA 8762)

Sales not Considered Retail

- Sales arising from restaurant operations by a hotel owner or inn-keeper irrespective of the amount of capital, provided, that the restaurant is incidental to the hotel business

- Sales through a single outlet owned by a manufacturer of products manufactured, processed or assembled in the Philippines, irrespective of capitalization

- Sales to industrial and commercial users or consumers who use the products bought by them to render service to the general public and/or produce or manufacture of goods which are in turn sold by them; or

- Sales to the government and/or its agencies and government-owned and controlled corporations. 

- Sales of a manufacturer, processor, laborer, or worker of products manufactured, processed or produced by him to the general public whose capital does not exceed One hundred thousand pesos (100,000.00);

- Sales by a farmer or agriculturist selling the products of his farm, regardless of capital;

RA 8762 liberalized retail trade by  allowing foreigners to engage in retail business

If he is a former Natural Born Filipino. (Sec 4)

If Enterprises specializes in high end or luxury products with a paid up capital of the peso equivalent of US$ 250,000 per store

  - (Sec 5 Category D)

If Enterprises has a paid up of peso equivalent of US$ 2.5 million provided that in no case shall investments for each store be less than peso equivalent of US$ 830,000.

  - (Sec 5, Category B and C)

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. (Sec 3, par 2)