ANTI-DUMMY ACT

1. The Act penalizes Filipinos who permit aliens to use them as nominees or dumm
ies to enjoy privileges reserved for Filipinos or Filipino corporations. Crimina
l sanctions are imposed on the president, manager, board member or persons in ch
arge of the violating entity and causing the latter to forfeit its privileges, r
ights and franchises.
2. Disqualified aliens cannot intervene in the management, operation, administra
tion or control of the business reserved to Filipinos whether as an officer, emp
loyee or laborer, with or without remuneration, except when:
a. alien takes part in technical aspects;
b. provided that no Filipino can do such technical work; and
c. with express authority from the President, upon the recommendation of the dep
artment head concerned.
3. By way of exception, the following may participate in management:
a. Aliens may be elected to the Board of Directors to the extent of their allowa
ble share in the capital of the corporation (in partially nationalized industrie
s).
b. A registered enterprise may employ foreign nationals in supervisory, technica
l, and advisory positions for a period of 5 years subject to extension.
c. Where majority of stocks of a pioneer enterprise is owned by foreign investor
s, the following positions may be held by foreign nationals:
? president
? treasurer
? general manager
? equivalent positions
4. A Filipino common-law wife of an alien is not barred from engaging in the ret
ail business provided she uses capital exclusively derived from her paraphernal
properties; however, allowing her common-law alien husband to take part in the m
anagement of the retail business would be a violation of the law.
5. What doing business means:
a. soliciting orders, purchases, service contracts;
b. opening offices whether called liaison offices or branches;
c. appointing representatives or distributors who are domiciled in the Philippin
es or who in any calendar year stay in the country for a period totaling 180 day
s or more;
d. participating in the management or supervision or control of any domestic fir
m, entity or corporation in the Philippines;
e. any other act or acts that imply continuity in commercial dealings
6. When commissioned merchants/investors or commercial brokers act in their own
name in selling foreign products, the foreign firm manufacturing these products
is not doing business in the Philippines.
7. When a local corporation or person acts in the name of a foreign firm, the la
tter is doing business in the Philippines.
8. The following are NOT doing business:
a. mere investment as a shareholder by a foreign entity in domestic corporations
duly registered to do business;
b. exercise of rights as such investor;
c. having a nominee director or officer to represent interests in such corporati
on;
d. appointing a representative or distributor domiciled in the Philippines which
transacts business in its own name and for its own accounts.