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Joint Venture between Foreign company and Local Company

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Peaches


Arresto Menor
Good day! We are a Foreign company that wishes to participate to bid in a locally-funded project of DPWH concerning Data Collection Services. However, it is required on the Bid Documents that foreign companies cannot participate in the bid unless the company is 60% Filipino/40% Foreign investor.
It has been advised by lawyers of Filipino company to enter a Joint Venture Agreement. However, Foreign company would like to ask for your assistance on our below-listed concerns, if possible, please provide necessary legal reference(s):
1. Can Joint Venture be registered in SEC?
2. Is Joint Venture in between "Corporations" or "Partnership" allowed to enter the bidding for Pavement Data Collection Services project?
3. Local companies suggests Investment (40:60) but final profit sharing (90:10 or 80:20) since it is the Foreign company alone that will invest, we would like to confirm whether or not this kind of method has any problems when it comes to financing report for BIR?
4. Can the equipment owned by Foreign company be leased to the Joint Venture which is formed by the same Foreign company and Local company?
5. Who will be the authorised person for the corporate bank account when the operation expenses will all be shouldered by the Foreign Company?
5. What is the better option to take for the project? (Joint Venture with Agreement or Joint Venture registered with SEC)

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Lunkan


Reclusion Perpetua
3. I don't know, but if you can't, then you can have as "backup" solution the Filipin company lease equipment and/or loan money and by that you can make contract between the foreign and Filipin company, so the foreign company get more than their percent of the shares they own.
(Btw in Philippines it's common with agreements where one finance and the other do the main work, but it's common the working side more than 20 %, but of course it depends of how much work it is compared to investment size.)

LOCK UP! It's a percent tax at the REVENUE in the COMPANY, IF the company get low/no profit. (=The tax will be the HIGHEST of that or what it is, when having profit tax.)

4. I suppouse so, because that's how I plan to do Smile (but I haven't checked with lawyer/acountant yet.)

The rest of your questions I don't know anything about.

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iceman_reman


Arresto Menor
1. No. Because JV has no separate and independent entity to register to SEC.
2. Yes. There is no prohibition in law unless the purpose of JV is unlawful.
3. NO. BIR do not concern in profit-sharing but more on ownership. Hence, you can play around with your MOA.
4. Yes. JV for legal purpose is an entity for a particular special project. All its transactions are separate from the entities composing them.
5. JVA.

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