RETAIL TRADE LIBERALIZATION ACT

Republic Act 8762, also known as the Retail Trade Liberalization Act of 2000, was enacted to promote
consumer welfare by attracting and promoting productive investments of foreign nationals and Filipinos
overseas to stimulate economic growth, and enable Philippine goods and services to become globally
competitive through the liberalization of the retail trade sector.
The law defines retail trade as any act, occupation or calling of habitually selling merchandise,
commodities, or goods directly to the general public for consumption.
Exempted Trade Activities
The law shall not apply to the following:
1. Sales by a manufacturer, processor, laborer or worker, to the general public of products manufactured,
processed or produced by him if his capital does not exceed One Hundred Thousand Pesos (P100,000)
2. Sales by a farmer or agriculturist selling the products of his farm
3. Sales in 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
4. Sales that are limited only to products manufactured, processed or assembled by a manufacturer
through a single outlet, irrespective of capitalization
Foreign Equity Participation
Foreign-owned partnerships, associations, and corporations formed and organized under the laws of the
Philippines may, upon registration with the SEC and/or DTI, or in the case of single proprietorship with
DTI, engage or invest in the retail trade business, subject to the following categories:
a. Category A – Enterprise with paid-up capital equivalent in Philippine Pesos of less than US$2.5
Million is reserved exclusively for Filipino citizens and corporations owned by Filipino citizens.
b. Category B – Enterprise with a minimum paid-up capital equivalent in Philippine Pesos of US$2.5
Million but less than US$7.5 million may be wholly owned by foreigners except for the first two
(2) years after the effectivity of this Act wherein foreign participation shall be limited to not more
than sixty percent (60%) of total equity.
c. Category C – Enterprise with a paid-up capital equivalent in Philippine Pesos of US$7.5 million or
more may be wholly owned by foreigners, provided, however, that in no case shall the
investments for establishing a store in Categories B and C be less than the equivalent in Philippine
Pesos of Eight Hundred Thirty Thousand US Dollars (US$830,000).
d. Category D – Enterprise specializing in high-end or luxury products with paid up capital equivalent
in Philippine Pesos of Two Hundred Fifty Thousand US Dollars (US$250,000) per store may be
wholly owned by foreigners.
NOTES:

Paid-up Capital = means the total investment in a business that has been paid-up in a corporation or
partnership or invested in a single proprietorship which may be in cash or in property. It shall also refer
to assigned capital in the case of foreign corporations.

The foreign investor shall be required to maintain in the Philippines the full amount of the prescribed
minimum capital. Unless the foreign investor has notified the SEC (DTI) of its intention to repatriate its
capital and cease operations in the Philippines. The actual use in Philippine operations of the inwardly
remitted minimum capital requirements shall be monitored by the SEC.

All retail trade enterprises under Categories B and C in which foreign ownership exceeds 80% of equity
shall offer a minimum 30% of their equity to the public through any stock exchange in the Philippines
within 8 years from their start of operations. (Sec. 7)

Strict compliance with qualifications on capitalization, track record, and reciprocity pursuant to Sec. 8 for
foreign retailers. (Pre-qualification requirements)

Sec. 9 on Promotion of Locally Manufactured Products: 30%-Categories B & C; 10%-Category D

Sec. 10 on Prohibited Activities of Foreign Retailers

Rights of Former Filipino Citizens

Under Sec. 4 of the law, natural-born citizens of the Philippines who have lost their Philippine citizenship
but who reside in the Philippines, are granted the same rights as Filipino citizens in the retail trade
business.