Anti-Dummy Law Philippines Guide

The Anti-Dummy Law prohibits arrangements that evade nationality restrictions through simulated Filipino ownership, prohibited intervention in management or false representations. The substance of ownership, funding and control matters.

Risk indicators

• Filipino shareholders who did not provide or control their investment
• Undisclosed trust, side agreement or repayment arrangement
• Foreign control beyond what the governing law permits
• False citizenship or beneficial-ownership declarations
• Board, bank or contract controls inconsistent with the permitted structure
• Nominees who do not exercise genuine ownership rights

Compliance review

1. Classify the restricted activity and exact nationality rule.
2. Trace the source of funds and beneficial ownership.
3. Review board, veto, management and signing rights.
4. Compare contracts and actual conduct with SEC disclosures.
5. Correct inaccurate records and obtain advice before implementation.

Documents to examine

Articles, bylaws, stock and transfer book, subscription records, loan documents, shareholders’ agreements, voting arrangements, bank mandates, management contracts and beneficial-ownership filings.

Sources and review

• Commonwealth Act No. 108, as amended
• Revised Corporation Code
• SEC official website

Verified 22 September 2026. Criminal and regulatory exposure requires fact-specific professional review.