Consider this example:-

A Motorcycle company has been trying to make profits selling Motorcycles in the Philippines.

Clearly this is a BIG Market judging by the number of outlets displaying Motorcycles for sale and the increasing number of Motorcycles on Philippine roads (especially as the economic crises deepens). But this also means it is a very competitive market, and a difficult one for a small Motorcycle Business to survive in. They struggled by for 5 years or so.

Buying motorcycles direct from a Manufacturer in China meant that a consignment of 2000 Motorcycles might be bought for Php25M?

The Proprietor of that Company decided the way to obtain big money for such large consignments, was to entice Foreigners to invest money into the company. They could expand the business with many more showrooms competitively priced motorcycles, giving excellent profits, and the supply of Spare Parts.

To make the sale of the Motorcycles even easier, Rural Bank offer Micro-finance loans over 3 Years making it available for about Php100/day.

For an investor (or group) putting up Php6M the offer was 100%pa paid monthly of 1 Year Term then return of ones investment.

So how can this Company legally offer such Investment to Foreigners?

Selling Shares in the Company might be the ‘normal’ route but complicate, time consuming and expensive.

Selling ‘Securities’ requires SEC Secondary License.

How about offering Sub-Dealerships Contracts?

The First Party offers the Second Party a DEALERSHIP and INVESTMENT Proposal;

It is clearly understood by the Second Party that the First Party shall have the full authority to manage the business operation of the DEALERSHIP, so as not to burden the Second Party with the operational direction .

The First Party shall take charge of all operating expenses of the business such as, Showroom and Office rentals, Telephone, Electric, Water bills and salaries of Employees and Staffs.

The First Party covenants to free the Second Party of any and all liabilities and warranties as a result from the operation of the DEALERSHIP area Including employment issues and furthermore, the First Party shall defend the Second Party on all cases arising as such.

Would such an MOA bearing these Contractual terms, require any Investors Visa?

How about such Foreigner requiring appropriate Visa and/or Alien Employment Permit?

The reason I ask, is because I was conned out of my money by such enticement of 100%pa ROI.

It was basically a Ponzi scheme masquerading as a Motorcycles Company becuse they never paid that Chinese Manufacturer for the 1 one only consignment they ordered, so not all parts supplied to complete assembly, this no sales and no profits.

Payments stopped after 5 months.

We files a case of Syndicated Estafa since there was a Bank Guarantee by the Bank offering the Micro-finance Loans to cover Chattel Mortgage. The clause stipulating that the funds be spent exclusively on the motorcycle expansion business was not enforced or complied with.

Now they filed a complaint with the BI, requesting the Foreigners, be deported for not having appropriate Work Permits and Investment Visa.

So she steals our funds then tries to get us deported with trumped up charges, so we cant continue the Syndicated Estafa against her.

Now others named in the Estafa Complaint Affidavit, say they will file cases of Malicious prosecution againt those who filed, naming them.

I would like to learn what is the legal bottom line position on this situation?