Under the new tax code that replaces previous legislation promulgated in 1955, income from stock trading will not be subject to tax.

It was unclear whether the previous income tax rate was ever applied but its existence and the ambiguity surrounding its enforcement is widely believed to have been a deterrent to foreign investment in local companies. The new law is expected to boost foreign interest in the stock exchange.

Foreign entities can own up to 100 per cent of local companies except banks, in which each foreign investor is restricted to 5 per cent ownership and the total foreign ownership cannot exceed 49 per cent.