Are directors required to be residents of the Philippines?
The Revised Corporation Code (“RCC”) provides the qualifications of a director of a corporation. The qualifications of a director may be summarized as follows: (1) must have legal ownership of at least one share of the capital stock, as provided under Section 22 of the RCC; and (2) Must not be disqualified under Section 26 of the RCC.
At present, therefore, residency in the Philippines is not required to be a director of a corporation. This is also supported by the Securities and Exchange Commission (SEC) Office of the General Counsel (OGC) Opinion No. 22-07. In such opinion, the SEC explained that “Section 23 of the old Corporation Code provides that “a majority of the directors or trustees of all corporations must be residents of the Philippines.” On the other hand, Section 22 of the RCC provides for the qualifications and term of the board of directors or trustees of a corporation which does not anymore include the residency requirement.
However, in SEC-OGC Opinion No. 22-07, it was explained that the RCC still allows private corporations to prescribe in their By-Laws the directors’ qualifications such as residency requirements. Section 46(f) of the RCC allows corporations to put in their respective By-Laws its directors’ qualifications. As such, the residency requirement may still be required, if it is in the By-Laws of the corporation.
Thus, unless the By-Laws are amended, the provision on the residency requirement will apply.
