Citizenship Requirement of Executive Committee members A foreigner can be a member of the executive committee without violating the Anti-Dummy

Law, provided that foreign representation in said governing body shall only be in proportion to the foreign shareholdings in the corporation, and provided further, that the foreigners shall not be given specific individual managerial responsibility. (SEC Opinion dated June 3, 1998 addressed to Mr. Greg Post.) Citizenship Requirement of Corporate Officers The SEC, pursuant to the ruling of the Department of Justice re: Opinion No. 37, S.1976, has ruled on several occasions that in firms engaged in wholly or partially nationalized business activities, aliens are barred form being appointed/elected to management positions, such as president, vice-president, treasurer, secretary, auditor, etc. of said companies although they can be elected directors in proportion to their allowable participation or share in the capital of such activities in accordance with Commonwealth Act No. 108, as amended by PD 175, otherwise known as Anti-Dummy Law (SEC Opinion dated February 18, 1994 addressed to Atty. Tomas M. Guno) The above ruling is only the general rule as the law itself provides for an exception in cases of technical personnel whose employment may be specifically authorized by the Secretary of Justice. Thus, an appropriate government agency may favorably recommend to the DOJ the employment or appointment of foreign nationals to management positions in a particular business activity if so necessary. (SEC Opinion dated April 12, 1991 addressed to Mr. Jose M. Sarmiento) Where there is a special law authorizing the employment by foreign national in certain areas of nationalized activities, the special law is deemed to supersede the provisions of the Anti-Dummy Law. (SEC Opinion No. 08-06 dated January 23, 208 addressed to Ms. Regina Peralta, citing DOJ Opinion No. 113, S. 1981) Where the function of the chairman of the board as provided in the by-laws is merely to preside at the meetings of the board or committees of which he is a member, a non-Philippine national may qualify as chairman of the board in companies engaged in partially nationalized business. (SEC Opinion dated May 15, 1985 addressed to Atty Francisco F. Angeles) A domestic corporation owned by 60% Filipino citizens and 40% non-Philippine nationals whose paid-in equity participation is less than the equivalent of US $500,000.00 (now US $200,000.00 under RA 7042, as amended by RA 8179) is considered a nationalized business reserved to Philippine nationals by virtue of the Foreign Investment Act of 1991, hence, a foreigner cannot be elected as president. A foreign national may only be elected as president of a corporation

only if the foreign minimum capital requirement under the said Act is complied with. (SEC Opinion dated September 8, 1992 addressed to Atty. KDM Asuncion) A realty corporation is engaged in partially nationalized business activity, hence, aliens are banned form being appointed as officers. (SEC Opinion dated November 10, 1992 addressed to Mr. Eleno L dela Cruz) Pursuant to Section 10 of RA 7916, otherwise known as The Special Economic Zone Act of 1995 (PEZA Law), as amended, ecozone enterprises may employ foreign nationals in executive supervisory, technical and Advisory positions. (SEC Opinion No. 08-06, dated January 23, 2008 addressed to Ms. Regina S. Peralta) The prohibition against the intervention of foreigners in nationalized business is not limited to corporate officers but also to employees or laborers who intervene in the management, operation, administration or control thereof. (SEC Opinion dated December 4, 1991 addressed to Mr. Jose N Sarmiento)