Expatriates who occupy the position of President & Treasurer of Philippine companies need to secure Alien Employment Permit. There are exceptions.
In the past the expatriate occupying the position of President or Treasurer of a Philippine corporation was exempted from securing an Alien Employment Permit (“AEP”) from the Department of Labor and Employment (DOLE). That exemption has been withdrawn by DOLE under DOLE Advisory No. 2, issued on 12th of July 2016.
Background
Department Order No. 146-15 Series of 2015 (“First Order”), also known as the Revised Rules for the Issuance of Employment Permits to Foreign Nationals (“DO 146-15”), provided the following exclusion, thus:
“Section 3 Exclusion.- The following categories of foreign nationals are excluded from securing an employment permit:
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b. Corporate officers as provided under the Corporation Code of the Philippines, Articles of Incorporation, and By-laws of the Corporation such as President, Secretary and Treasurer. ”
From the foregoing, it is clear that there is no need, for the corporate officers identified above, to secure an AEP. Bearing in mind the First Order, practitioners have cited it as authority to avoid securing an AEP for the expatriate Presidents and Treasurers.
Change in the Rules
However, DOLE issued Advisory No. 2 last 12 July 2016 (“Second Order”). According to the Second Order, Advisory No. 2 was issued to “address some issues” in the implementation of DO 146-15, particularly, the issuance of AEP and Certificates of Exemption/Exclusion. The Second Order states:
“2. Presidents and Treasurers who receive salary or compensation shall not be excluded and shall be required to secure AEP; however, if the President and Treasurer receive allowance only they shall be excluded and shall not secure AEP.”
Conclusion
The rule as it stands today is, not all expatriate President and Treasurers are required to secure an AEP. For more information, please contact Atty. Narciso Reyes Jr. (ngreyes@veralaw.com.ph) or Myra Santos (mqsantos@veralaw.com.ph).