Darra Matienzo

BSA4

FOREIGN CORPORATION

A corporation formed, organized and existing under any law than those of the Philippines and
whose laws allow Filipino Citizens and corporations to do business in its own country or state – what do
you call this principle?

What constitutes “doing business in the Philippines?”

 Continuity Test- doing business implies a continuity of commercial dealings and arrangements
and contemplates to some extent the performance of acts or works or the exercise of some
functions normally incident to and in progressive prosecution or the purpose and object of its
organization
 Substance Test- a foreign corporation is doing business in the country if it is continuing the body
or substance of the enterprise of business for which it was organized
 Contract Test- actual performance of specific commercial acts within the territory of the
Philippines
o Commercial act must be performed within Philippine territory;
o Must earn points
o Established operations here in the Philippines and is not a mere importer or has
appointed a distributor of goods to the Philippines, except:

 Doing business under Foreign Investment Act of 1991:

o Soliciting orders. Service contracts, opening offices;
o Appointing representatives, distributors domiciled in the Philippines;
o Participating in the management, supervision or control of any domestic business firm,
entity or corporation in the Philippines;
o Any act or acts that imply a continuity of commercial dealings;

 Not doing business:

o Mere investment as a shareholder and exercising the rights of an investor;
o Having a nominee director or officer to represent its interest in the corporation; and
o Appointing a representative or distributor which transact business in its own name and
for its own account

License to do business
Purpose of the license. Requirements for the application/issuance of license

Consequence of doing business without a license

Definition and Rights of foreign corporations

Suspension or revocation of license