Wednesday, April 12, 2017

Can a foreigner be the chairman of the board of a corporation?

For as long as the corporation is not engaged in any nationalized or partly nationalized activity, a foreigner may serve as president or chairman of the board of a corporation.

However, if the purpose of the corporation as stated in its Article of Incorporation does not exclude ownership of land and the corporation eventually owns a land, then a foreigner cannot be chairman of its board. That is because by owning a land, the corporation has engaged in a partly nationalized activity.

Article XII, Section 7 of the Constituion provides that: "Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporation or associations qualified to acquire or hold lands of the public domain."

It also goes without saying that in a 60:40 corporation where 60% of shares is owned by Filipinos and 40% is owned by foreigners, a foreigner cannot be chairman of the board or president of the corporation.

According to the Securities and Exchange Commission in an Opinion, foreigners can be elected as directors in proportion to their participation or share in the capital of corporations engaged in activities that are reserved to Filipino pursuant to PD 715 which amends CA 108, but are prohibited from being elected in management positions such as the President.

"On the citizenship requirement of corporate officers: Sec. 2-A of Commonwealth Act (CA) No. 108, as amended, bans foreigners from being elected or appointed to management positions as president, vice-president, treasurer, secretary, etc. in business activities where there is a constitutional or statutory provision imposing a specific nationality requirement as a requisite for the exercise or enjoyment of a right, franchise or privilege."


The articles in this blog are the writer's own opinion, views or report of facts, AND SHOULD NOT SUBSTITUTE for official documents or issuances, or the advice of an independent and competent legal counsel. We do not warrant the accuracy and suitability of these articles for whatever purpose you may have in copying them. Thank you.

Privacy Policy

This privacy policy tells you how we use personal information collected at this site. Please read this privacy policy before using the site or submitting any personal information. By using the site, you accept the practices described here.

Collection of Information
We collect personally identifiable information, like names, email addresses, etc., when voluntarily submitted by our visitors. The information you provide is used to fulfill your specific request, unless you give us permission to use it in another manner, for example, to add you to one of our mailing lists.

Cookie/Tracking Technology
Our site may use cookies and tracking technology which are useful for gathering information such as browser type and operating system, tracking the number of visitors to the site, and understanding how visitors use the Site. Personal information cannot be collected via cookies and other tracking technology, however, if you previously provided personally identifiable information, cookies may be tied to such information. Third parties such as our advertisers may also use cookies to collect information in the course of serving ads to you. Most web browsers automatically accept cookies, but you can usually modify your browser setting to decline cookies if you prefer.

Distribution of Information
We do not share your personally identifiable information to any third party for marketing purposes. However, we may share information with governmental agencies or other companies assisting us in fraud prevention or investigation. We may do so when: (1) permitted or required by law; or, (2) trying to protect against or prevent actual or potential fraud or unauthorized transactions; or, (3) investigating fraud which has already taken place.

Commitment to Data Security
Your personally identifiable information is kept secure. Only authorized staff of this site (who have agreed to keep information secure and confidential) have access to this information. All emails and newsletters from this site allow you to opt out of further mailings.

Privacy Contact Information
If you have any questions, concerns, or comments about our privacy policy you may contact us by email at

We reserve the right to make changes to this policy. You are encouraged to review the privacy policy whenever you visit the site to make sure that you understand how any personal information you provide will be used.