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convenience of establishing a 100% Foreign owned Telecommunication Company in the Philippines

100% Foreign owned Telecommunication Company

Following the amendments to the Public Service Act by Republic Act No. 11659[1] allowing foreigners to fully own companies in the telecommunication, shipping, airline, railway, toll road, and transport network vehicle industries as a public utility, His Excellency, President Ferdinand R. Marcos Jr., issued Executive Order (EO) No. 32 series of 2023. The executive order streamlines the permitting process for the construction of telecommunications and internet infrastructures in the Philippines[2].

EO No. 32 covers all National Government Agencies (NGAs) and Instrumentalities, including government-owned or controlled corporations, as well as the Local Government Units (LGUs) involved in the issuance of permits, licenses, clearances, certifications, and authorizations required for the following:

a. Construction, installation, repair, operation, and maintenance of Shared Passive Telecommunications Tower infrastructure; and

b. Erection of poles, installation of aerial and underground cables and facilities, underground fiber ducts, ground terminals and other transmission or similar telecommunications and internet infrastructure and facilities, and other passive infrastructures.

Further, Section 2 of EO No. 32 provides that no other national and local permit or clearance shall be required in the construction, installation, repair, operation, and maintenance of telecommunications and internet infrastructure, except for the necessary safety requirements[3]. It accelerated pending and new applications after due payment and completion of the documentary requirements from their covered agencies and shall be deemed approved if not acted upon within the prescribed period as provided under existing laws in connection with RA No. 9485, as amended.

To better understand the effects of EO No. 32 to telecommunication and internet corporations, it is highly recommended to seek the advice of the business registration lawyers and the best corporate law firm in the Philippines.

Feasibility of foreign owned telecommunication and internet industries in the Philippines.

In opening up the telecommunication and internet industries to foreigners, the Philippines is one of the leading countries to establish a telecommunication business, with the help of the best corporate law firms in the country. Also, the complexities in establishing telecommunications and internet companies in the Philippines are significantly reduced due to the following reasons:

  1. The Subscriber Identity Module (SIM) registration Act legislated in December 27, 2022 mandates that all end-users are required to register their SIMs with their respective Philippine Telecommunication Entities (PTEs), as a prerequisite to the activation thereof[4]. With this, both the PTEs and the end-users are protected by the law from prevention of fraud and abuse of the mobile phone systems.
  1. Common tower policy[5] provides efficiency that allows multiple telecommunication companies to co-locate at a single site and share on the operation expenses. This improves service quality into fast, affordable, and secure ICT (information communications technology) services, aiding the most significant data and technology barriers to telecommunication transformation.[6]
  1. Strong and Quality Workforce. The Filipino workforce stands out as a remarkable asset that sets the Philippines apart from other Asian countries. The country places great importance on education, resulting in an impressive literacy rate of 99.08 percent,[7] one of the highest in the region. Furthermore, English is a core subject in all schools alongside the native language, making the Philippines one of the world’s largest English-speaking countries that could effectively communicate diverse environments in a workplace no matter what nationality could venture in the Philippines.

The ease of complying with the regulatory permit and licenses for foreign owned entities is now a more convenient through the enactment of EO No. 32. Hence, it best to consult the best business registration lawyer or a lawyer for company registration to be advised on how to establish a 100% foreign owned telecommunication company in the Philippines.  

Written by: Cheene Torino

[1] https://www.officialgazette.gov.ph/downloads/2022/03mar/20220321-RA-11659.pdf

[2] https://officialgazette.gov.ph/downloads/2023/07jul/20230704-EO-32-FRM.pdf

[3] Elaborated in Sec. 2 of the Executive Order No. 32

[4] https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/96154

[5] Department Circular No. 8, s. 2020 “Policy Guidelines on the Co-Location and Sharing of Passive Telecommunications Tower Infrastructure for Macro Cell Sites”.

[6] https://www.ey.com/en_gl/consulting/tech-horizon-survey

[7] http://uis.unesco.org/en/country/ph


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