Stricter rules set for foreign traders doing biz in Davao

The two ordinances, approved on second reading at the City Council's regular session Tuesday, require stricter procedures for foreign nationals to do business in the city.  

City legislators approved the proposed ordinance prescribing guidelines in the registration of business establishments with foreign nationals in the city and other purposes.  

The ordinance outlined a registration procedure, requiring foreigners to have a business or investor’s visa, that they should apply for a tax identification number with the Bureau of Internal Revenue, that they should also apply for business registration either with the Securities and Exchange Commission (SEC) for partnerships and corporations and with the Department of Trade and Industry (DTI) for sole proprietorships.  

The ordinance also required the completion of a business permit from the Office of the Business Bureau. It also required foreign firms to get an Alien Employment Permit with the Department of Labor and Employment.  

The ordinance provided also for the creation of an inter-agency task force, to be led by Mayor Rodrigo Duterte, to monitor the business enterprise of foreign nationals.  

Foreigners are allowed to own business with 60-40 ownership scheme, in favor of a Filipino partner. But Majority Floor Leader Bonifacio Militar, chair of the Committee on Rules, Privileges, Laws and Ordinances during the past council, said most violations are on the country's anti-dummy law against putting up Filipinos as front owners and also the retail law. He said most of the violators run “ukay-ukay” shops, bars and casinos.  

Also approved was another proposed legislation to amend the 2005 Revenue Code of Davao City, which sought to include requirements for foreigners in areas such as health and sanitation, cleanliness and beautification, peace and order, zonification, among others.  

Pushed by the City Council's Committee on Rules, Privileges, Laws and Ordinances, the passing of the ordinances came after certain incidents involving Koreans with questionable business engagements in the city caught the public limelight.  

Militar passed resolutions to require the Bureau of Immigration and Deportation to provide the city council with a copy of a list of Korean nationals in the city. He also passed a resolution that asked the Bureau of Customs to probe the importation of golf carts that proliferate in the city's golf courses frequented by Korean sports tourists and also asked the SEC to check the legitimacy of establishments run by Koreans.  

The resolutions caused the holding of committee hearings where recommendations emerged for the monitoring and regulation in the entry and exercise of businesses or trades by foreign nationals in the city.  

Militar stated in the rationale of the ordinance that the increasing number of foreigners, specifying on the Koreans, in the city's business activities "has created an alarm and considerable doubt on the legitimacy of their entry, stay, employment as well as operation of business or trade in the country." 

He said there is a need to protect local trade that is why the ordinance is imperative.  

Militar said the measures are not meant to make it more difficult for foreign investors to come and flow in money to the city.  

"We welcome foreigners but they should comply with our laws," he told reporters after the session.  

Militar cited some businesses run by foreigners do not comply with Social Security System and Philippine Health Insurance Corp. requirements for employees.  

He said of the 200 business establishments operated by foreigners in Davao City, only 32 are considered by the BID to be "legitimate" business organizations under the terms for corporations and partnerships. 

Earlier, Sonia Garcia, Department of Tourism regional director for Southeastern Mindanao, said they also welcome foreign tourists, but they have to comply with local laws.  

She told reporters at the height of the crackdown on foreign-operated illegitimate establishments that the DOT went with BID agents to convince the foreigners to go the legal way. (Walter I. Balane / MindaNews)