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4d SEC Opinion, 06 November 1989

The document summarizes the Department of Justice's ruling on how to determine a corporation's nationality for purposes of land ownership. It states that if 60% or more of a corporation's capital is owned by Filipino citizens, then the entire corporation is considered Filipino. But if Filipino ownership is less than 60%, only the number of shares corresponding to the Filipino percentage is counted as Filipino. The letter provides an example that if a corporation is 70% owned by another corporation (SMC) that is itself 70% owned by Filipinos, then it qualifies as Filipino.

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Norberto Sarigumba III
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63 views1 page

4d SEC Opinion, 06 November 1989

The document summarizes the Department of Justice's ruling on how to determine a corporation's nationality for purposes of land ownership. It states that if 60% or more of a corporation's capital is owned by Filipino citizens, then the entire corporation is considered Filipino. But if Filipino ownership is less than 60%, only the number of shares corresponding to the Filipino percentage is counted as Filipino. The letter provides an example that if a corporation is 70% owned by another corporation (SMC) that is itself 70% owned by Filipinos, then it qualifies as Filipino.

Uploaded by

Norberto Sarigumba III
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CORPORATE NATIONALITY: METHOD OF

DETERMINATION

The Department of Justice in its opinion dated January


19, 1989 ruled that shares belonging to corporations or
partnerships at least 60 percent of the capital of which
is owned by Filipino citizens shall be considered as of
Philippine nationality, but if the percentage of Filipino
ownership is less than 60 percent, only the number of
shares corresponding to such percentage shall be
counted as of Philippine nationality.

Sir/Madam:*

This refers to your letter dated June 20, 1989, requesting confirmation of our
contention that a corporation 70% of the capital stock of which is owned by San
Miguel Corporation (SMC) and 30% by a foreign entity, is qualified to acquire private
lands in the Philippines. (SMC itself is 70% owned by Filipinos).

In connection therewith, the Commission en Banc, in its meeting of November


2, 1989, resolved to adopt the method of determining corporate nationality on the
basis of the opinion of the Department of Justice No. 18, s. 1989, dated January 19,
1989. The rule in the determination of citizenship of corporations with alien equity
states as follows:

“Shares belonging to corporations or partnerships at least 60% of the


capital of which is owned by Filipino citizens shall be considered as of Philippine
nationality, but if the percentage of Filipino ownership in the corporation or
partnership is less than 60% only the number of shares corresponding to such
percentage shall be counted as of Philippine nationality. Thus, if 100,000 shares
are registered in the name of a corporation or partnership at least 60% of the
capital stock or capital respectively, of which belong to Filipino citizens, all of the
said shares shall be recorded as owned by Filipinos. But if less than 60% or,
say, only 50% of the capital stock or capital of the corporation or partnerships,
respectively belongs to Filipino citizens, only 50,000 shares shall be counted as
owned by Filipinos and the other 50,000 shares shall be recorded as belonging
to aliens.”

In the light of the foregoing, the Commission hereby confirms your view on the
matter.

Please be advised accordingly.

*
Letter-opinion dated 06 November 1989, addressed to Roco Bunag and Kapunan Law Offices; penned by Chairman Rosario
N. Lopez.

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