The Anti-Dummy Law (Commonwealth Act 108, as amended by Presidential Decree 715) is often cited and frequently misunderstood. It does not prohibit foreign nationals from sitting on Philippine company boards — it prohibits using Filipino proxies to disguise foreign control in sectors where the law limits foreign equity.
What the Anti-Dummy Law actually prohibits
The law targets two things:
- Dummy arrangements: Using a Filipino citizen as a nominee shareholder or director to hold equity on behalf of a foreign national in a restricted sector, when the foreign national effectively controls that stake
- Unauthorised intervention: Foreign nationals intervening in the management or operation of businesses reserved for Filipinos, beyond what their lawful equity stake permits
Both the dummy (the Filipino) and the foreign principal face criminal liability.
What it does NOT prohibit
- Appointing Filipino directors in a company that is fully or partially foreign-owned in a non-restricted sector
- Filipino professionals sitting on boards of foreign-owned companies in their professional capacity
- A foreign national sitting on the board of a company where their equity stake permits it
If your sector is not on the FINL and you can be 100% foreign-owned, you can appoint any mix of Filipino and foreign directors without Anti-Dummy Law concern. See 100% foreign ownership.
Board composition rules in restricted sectors
In sectors with a foreign equity ceiling, the proportion of foreign directors must not exceed the foreign equity percentage. A sector with a 40% foreign equity cap can have at most 40% of board seats held by foreign nationals.
This is a bright-line rule. Getting it wrong — even unintentionally — creates legal risk for both the company and the individual directors.
The corporate secretary: always Filipino
Separately from the Anti-Dummy Law, the Revised Corporation Code requires the corporate secretary to be a Filipino citizen and Philippine resident. This applies universally, not just in restricted sectors. See corporate secretarial services.
The corporate treasurer: resident, not necessarily a citizen
The corporate treasurer must be a Philippine resident but does not need to be a Filipino citizen. A foreign national who resides in the Philippines can lawfully serve as treasurer. The treasurer cannot simultaneously serve as president.
How Chamberlain approaches board structuring
We help foreign founders and investors structure boards that are compliant from day one — right sector classification, right equity limits, right mix of Filipino and foreign directors. Where a Filipino resident director is needed, we introduce qualified professionals, not warm bodies.
Book a consultation to discuss your board structure, or see transparent pricing for what’s included.
Frequently asked questions
What is the Anti-Dummy Law in the Philippines?
Commonwealth Act 108 (as amended by PD 715) prohibits using Filipino citizens as nominees or 'dummies' to circumvent constitutional or statutory nationality restrictions on business ownership. It does not prohibit all foreigner-Filipino board structures — only those designed to evade equity limits.
Can a foreign-owned company appoint Filipino directors?
Yes. A foreign-owned company in a non-restricted sector can freely appoint Filipino directors. The Anti-Dummy Law applies only when Filipino ownership or board seats are used to disguise foreign control in a restricted sector.
How many foreign nationals can sit on a Philippine company's board?
In sectors with foreign equity limits, foreign nationals may sit on the board in proportion to their equity stake. For example, in a sector capped at 40% foreign ownership, foreign nationals cannot hold more than 40% of board seats.