Investor-friendly visa
Foreigners intending to conduct business in the Philippines can now avail of a special visa being offered by the government without having to comply with the very strict paid-up capital requirement provided by the Foreign Investment Act and the Retail Trade Liberalization Law.
Under the very stringent Retail Trade Liberalization Law, a foreign entity may engage in the local retail trade provided his minimum paid-up capital is at least $2,500,000.00. On the other hand, the Foreign Investment Act prohibits foreign traders to engage in small and medium-sized market enterprises if their capital is less than $200,000.00, subject to exceptions.
What is a SVEG (Special Visa for Employment Generation)?
The investor-friendly Special Visa for Employment Generation (SVEG) takes away the minimum paid-up capital requirement provided under the two laws. Thus, under the simpler SVEG law, the main requirement is that the applicantmust employ at least ten (10) Filipinoseither as managers, executives, professional, technical, skilled or unskilled positions.
SVEG is one of the solutions conceived by the government in order to minimize the current unemployment problem of the country.At the same time it gives foreign traders interested in doing business in the country a chance to set up shop locally.
Thus, credible and determined foreigners with entrepreneurial spirit desiring to engage in the local trade may do so without the burden of raising the minimum paid-up capital required by Philippine laws. In the process, local job opportunities are created.
The SVEG is, however, still subject to all the restrictions imposed by the Philippine Constitution and other laws relating to control, nationality, and ownership of working capital. Generally, however, Manila Visa stresses that the new law is beneficial to both foreigners and locals alike.
In the case of the foreigner, the application process is simpler and the paid-up capital lesser. Meanwhile, on the part of the locals, more jobs are generated. The main purpose of the law is thus achieved.
Proof that foreign investor is serious
Manila Visa explains thatthe potential investor must also prove that:
- he will actually, directly, or exclusively engage in a sustainable commercial investment in the country;
- he shall perform acts of management with the authority to hire, promote and dismiss employees;
- there is a genuine intention to indefinitely remain in the country;
- he is not a risk to national security
Upon approval of the SVEG, the qualified foreign investoris now considered as a “special non-immigrant,” with multiple entry privileges. He is also granted a conditional extended stay. All privileges granted to the SVEG holder shall likewise be extended to the spouse and dependent unmarried children eighteen (18) years of age and below.
Easy approval of SVEG application
Since SVEG was founded mainly on public interest, the purpose of which is to alleviate the unemployment problem the country has been suffering for the past years, the government saw to it that qualified and determined foreign investors are given a substantial chance to invest their much-needed capital in the country.
Thus, the Commissioner of the Bureau of Immigration, the government official mandated by law to approve the special visa has been directed to be lenient in the evaluation and review of evidence and procedure in the approval of SVEG applications.
Businesses allowed
Manila Visa explains that under the law, the SVEG holder can engage in any “viable and sustainable commercial, investment, enterprise or industry” that:
a. Engages in the manufacturing, processing, assembly, production, packaging, supply, delivery and/or trading ofgoods, products and/or commodities, either for mass consumption or for export including foreign investors in specialeconomic zones owned and/or administered by the Philippine Economic Zone Authority (PEZA);
b. Requires or utilizes, on a wide-market proportion, service-intensive support in information technology, systemsresearch and development, education, knowledge and business process out-sourcing, production/services/innovation offshoringand call and/or transaction processing;
c. Provides, on a marketable and profitable degree, service-oriented support in modern, alternative, indigenous,physical, therapeutic, recuperative and health-care facilities; or
d. Provides training for long-term and full-time/regular employment of Filipino workers in a business activity, investment,enterprise or industry.
Foreign employer covered by the Labor Code of the Philippines
Once the SVEG is approved, the foreign investor becomes a legitimate employer covered by the Labor Code of the Philippines. Thus, he is bound to comply with the local permits, clearances, and license requirements such as the Social Security System, Philhealth, and Pag-Ibig, and other requirements provided under the Labor Code.
Other foreigners already in the country may also avail themselves of the privileges afforded to SVEG holders. Foreigners in possession of other investments in the country consisting of real estate, shares of stocks or bonds, insurance, mutual plans, estate funds, local or foreign currency time deposits may convert these investments into an active business activity, investment, enterprise, or industry in order to benefit the privileges offered by the SVEG.
