May an unlicensed foreign corporation "doing business" in the Philippines be allowed from accessing our courts?

As a general rule, no foreign corporation transacting business in the Philippines without a license shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines.

In a number of cases, however, the Supreme Court has held that an unlicensed foreign corporation doing business in the Philippines may bring suit in Philippine courts against a Philippine citizen or entity who had contracted with and benefited from said corporation. Such a suit is premised on the doctrine of estoppel. A party is estopped from challenging the personality of a corporation after having acknowledged the same by entering into a contract with it. The application of this principle prevents a person contracting with a foreign corporation from later taking advantage of its noncompliance with the statutes chiefly in cases where such person has received the benefits of the contract.

The principles regarding the right of a foreign corporation to bring suit in Philippine courts may be condensed in four statements:

(1)  if a foreign corporation does business in the Philippines without a license, it cannot sue before the Philippine courts;

(2)  if a foreign corporation is not doing business in the Philippines, it needs no license to sue before Philippine courts on an isolated transaction or on a cause of action entirely independent of any business transaction;

(3)  if a foreign corporation does business in the Philippines without a license, a Philippine citizen or entity which has contracted with said corporation may be estopped from challenging the foreign corporation’s corporate personality in a suit brought before Philippine courts; and

(4)  if a foreign corporation does business in the Philippines with the required license, it can sue before Philippine courts on any transaction.

On the other hand, the Foreign Investments Act of 1991 (the "FIA"; Republic Act No. 7042, as amended), defines "doing business" as follows:

Sec. 3, par. (d). The phrase "doing business" shall include soliciting orders, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totaling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business, firm, entity, or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in the progressive prosecution of, commercial gain or of the purpose and object of the business organization.

Section 1 of the Implementing Rules and Regulations of the FIA (as amended by Republic Act No. 8179) provides that the following shall not be deemed "doing business":

(1) Mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor;

(2) Having a nominee director or officer to represent its interest in such corporation;

(3) Appointing a representative or distributor domiciled in the Philippines which transacts business in the representatives or distributors own name and account;

(4) The publication of a general advertisement through any print or broadcast media;

(5) Maintaining a stock of goods in the Philippines solely for the purpose of having the same processed by another entity in the Philippines;

(6) Consignment by a foreign entity of equipment with a local company to be used in the processing of products for export;

(7) Collecting information in the Philippines; and

(8) Performing services auxiliary to an existing isolated contract of sale which are not on a continuing basis, such as installing in the Philippines machinery it has manufactured or exported to the Philippines, servicing the same, training domestic workers to operate it, and similar incidental services.

In essence, to constitute "doing business", the activity to be undertaken in the Philippines is one that is for profit-making. (See Steelcase, Inc. v. Design International Selections, Inc. [2012]; Agilent Technologies Singapore (Pte.), Ltd. v. Integrated Silicon Technology Philippines Corporation [2004])

Judicial application for Filipino citizenship (under Commonwealth Act No. 473, as amended): Qualifications and Procedure

I.           Qualifications

The qualifications of an applicant to become a citizen of the Philippines by naturalization are the following:

1.  Must be not less than twenty-one (21) years of age on the day of the hearing of the petition;

2.  Must have resided in the Philippines for a continuous period of not less than ten (10) years. (This is reduced to five (5) years, however, if married to a Filipina);

3.  Must be of good moral character and believes in the principles underlying the Philippine Constitution, and must have conducted himself in a proper and irreproachable manner during the entire period of his residence in the Philippines in his relation with the constituted government as well as with the community in which he is living;

4.  Must own real estate in the Philippines worth not less than five thousand pesos, Philippine currency, or must have some known lucrative trade, profession, or lawful occupation;

5.  Must be able to speak and write English or Spanish and any one of the principal Philippine languages;

6.  Must have enrolled his minor children of school age, in any of the public schools or private schools recognized by the Office of Private Education of the Philippines, where the Philippine history, government and civics are taught or prescribed as part of the school curriculum, during the entire period of the residence in the Philippines required of him prior to the hearing of his petition for naturalization as Philippine citizen.

II.        Procedure

Declaration to become a Filipino citizen

1.  One year prior to the filing of his petition for admission to Philippine citizenship, the applicant for Philippine citizenship shall file with the Office of the Solicitor General(OSG), a declaration under oath that it is his bona fide (or good faith) intention to become a citizen of the Philippines.

1.a His declaration shall include the following:

a.  name

b.  age

c.  occupation,

d.  personal description

e.  place of birth

f.   last foreign residence and allegiance

g.  the date of arrival

h.  the name of the vessel or aircraft, if any, in which he came to the Philippines, and

i.   the place of residence in the Philippines at the time of making the declaration

1.b No declaration shall be valid until lawful entry for permanent residence has been established and a certificate showing the date, place, and manner of his arrival has been issued.

1.c The declarant must also state that he has enrolled his minor children, if any, in any of the public schools or private schools recognized by the Office of Private Education of the Philippines, where Philippine history, government, and civics are taught or prescribed as part of the school curriculum, during the entire period of the residence in the Philippines required of him prior to the hearing of his petition for naturalization as Philippine citizen.

1.d He must furnish two photographs of himself.

Petition for citizenship

2.  One year after making and submitting such declaration, the applicant shall file with the competent court (i.e., in a regional trial in the place where he presently resides for at least a year), a petition in triplicate, with two photographs of the applicant.

2.a The petition must indicate the following:

a.  name and surname

b.  present and former places of residence

c.  occupation

d.  the place and date of his birth

e.  civil status, as single or married

f.   the name, age, birthplace and residence of the wife and of each of the children

g.  the approximate date of his arrival in the Philippines, the name of the port of debarkation, and, if he remembers it, the name of the aircraft on which he arrived

h.  a declaration that he has the qualifications required by law, specifying the same, and that he is not disqualified for naturalization under the provisions of the law

i.   that he has complied with the requirements under the law, and

j.   that he will reside continuously in the Philippines from the date of the filing of the petition up to the time of his admission to Philippine citizenship

2.b The petition must be signed by the applicant in his own handwriting and be supported by the affidavit of at least two credible persons, stating that they are citizens of the Philippines and personally know the applicant to be a resident of the Philippines for the period of time required by law and a person of good repute and morally irreproachable, and that said applicant has in their opinion all the qualifications necessary to become a citizen of the Philippines and is not in any way disqualified under the provisions of law.

2.c The petition shall also set forth the names and post-office addresses of such witnesses as the applicant may desire to introduce at the hearing of the case.

2.d The certificate of arrival, and the declaration of intention must be made part of the petition.

Notice and Publication

3.  Immediately upon the filing of a petition, the clerk of the court will publish the petition at applicant's expense, once a week for three consecutive weeks, (1) in the Official Gazette, and (2) in one of the newspapers of general circulation in the province where the petitioner resides, and (3) to have copies of said petition and a general notice of the hearing posted in a public and conspicuous place in his office or in the building where said office is located.

3.a The notice will contain the name, birthplace and residence of the applicant, the date and place of his arrival in the Philippines, the names of the witnesses whom he proposes to introduce in support of his petition, and the date of the hearing of the petition, which hearing shall not be held within ninety days from the date of the last publication of the notice.

Hearing of the petition

4.  The hearing shall be public, and the Solicitor-General, either by himself or through his delegate or the city prosecutor, shall appear on behalf of the government at all the proceedings and at the hearing.

Issuance and Registration of Naturalization Certificate

5.  If, after the hearing, the court believes, in view of the evidence taken, that the applicant has all the qualifications required by, and none of the disqualifications specified in the law and has complied with all requisites herein established, it shall render a decision granting the petition.

5.a Once the decision becomes final and executory, the court shall order the proper naturalization certificate to be issued and the registration of the said naturalization certificate in the proper civil registry.