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Four questions, in order
Most foreign investors arrive with the wrong first question. They ask what they need to invest, or what entity to form. Those matter, but they come third and fourth. Working through the sequence in the right order saves restructuring later.
1. Is the activity restricted at all?
The Philippines uses a negative list. Activities on List A or List B of the Foreign Investment Negative List are either reserved to Philippine nationals outright or capped at a stated percentage of foreign equity. Anything not on either list is open to 100% foreign equity, subject to licensing, regulatory and capitalisation requirements.
A large number of investors accept a Filipino partner they never needed, because nobody told them their activity was unrestricted. Start here, with foreign ownership limits under the 13th Negative List.
Two questions sit alongside this one and are easy to miss. Where the activity is a public service, the amended Public Service Act bars entities controlled by or acting on behalf of a foreign government, and foreign state-owned enterprises, from owning capital in a public utility or in critical infrastructure. Sovereign wealth funds and independent state pension funds are treated separately and capped collectively at 30%. And foreign nationals cannot hold more than 50% of a critical infrastructure entity unless their home country accords reciprocity to Philippine nationals.
2. If it is restricted, what does the cap actually require?
A 60/40 requirement is not satisfied by a shareholder register showing 60/40. Two separate tests apply.
The first is arithmetic. Under SEC Memorandum Circular No. 8, series of 2013, the required Filipino percentage is applied to both the outstanding shares entitled to vote in the election of directors and the total outstanding shares, voting and non-voting. A structure that clears one and fails the other does not comply.
The second is substantive. Legal title on the stock and transfer book is not enough. The implementing rules of the Foreign Investments Act require full beneficial ownership of the stocks coupled with appropriate voting rights, in the formulation the Supreme Court adopted in Gamboa v. Teves. Stock whose voting rights have been assigned or transferred to a foreign party does not count toward the Filipino share. This is where arrangements that look compliant on paper fail.
A failure of either test is a nationality and licensing problem. It becomes a criminal matter when the arrangement is a dummy arrangement, meaning a Filipino name or citizenship used as a front to evade the ownership limit, or Filipino capital that exists only on paper. The Anti-Dummy Law reaches both the foreign party and the Filipino who lends the name. The distinction matters, and the guide below sets out where the line falls.
3. How much capital is required?
There is no single figure. It depends on whether the company exports or serves the domestic market, on how much foreign equity it carries, and on whether a sector statute displaces the general rule. Retail trade is the clearest example of a sector statute doing exactly that.
4. Where will the business operate, and through what entity?
A foreign national cannot acquire private land in the Philippines, subject to narrow exceptions: acquisition by hereditary succession, the limited areas open to former natural-born Filipino citizens, and units in a condominium project where foreign holdings stay within 40%. Land held by a corporation that qualifies as a Philippine national is a separate route with its own requirements.
For most operating businesses, long-term leasing is the practical answer. The maximum term depends on whether the investor holds an approved and registered investment, and several sectors carry their own investment thresholds and use conditions on top of the term. The vehicle is a separate decision from the premises, and it turns on whether the entity will earn income here and on whether the parent will carry the liability.
What changed, and when
Every instrument below is current law. The dates matter because a great deal of published guidance on Philippine foreign investment was written before one or more of them took effect.
| Instrument | In force | What it changed |
|---|---|---|
| RA 11595, amending the Retail Trade Liberalization Act | 21 January 2022 | Cut the foreign retailer minimum paid-up capital to ₱25,000,000, with ₱10,000,000 minimum investment per store; removed the investment categories, the pre-qualification certificate and the public offering requirement |
| RA 11647, amending the Foreign Investments Act | Signed 2 March 2022 | Added the startup and startup-enabler endorsement route to the reduced US$100,000 threshold for micro and small domestic market enterprises, and replaced the 50-employee test with a majority-Filipino test, minimum 15 |
| RA 11659, amending the Public Service Act | 12 April 2022 | Narrowed what counts as a public utility, opening activities reclassified as public services. Also barred foreign governments and foreign state-owned enterprises from new capital in public utilities and critical infrastructure, capped state funds at 30%, and imposed a 50% reciprocity ceiling on critical infrastructure |
| RA 12252, amending the Investors' Lease Act | 19 September 2025 | Raised the maximum private land lease for qualifying foreign investors from 75 years to an aggregate of 99, with sector investment thresholds and termination for withdrawal of the registered investment or unauthorised use |
| SEC Memorandum Circular No. 15, series of 2025 | 1 January 2026 | Consolidated the beneficial ownership rules into a single framework: revised beneficial owner categories, a verification mechanism for declared information, controlled access by authorised parties, and the AMLC 20% reporting threshold |
| IRR of RA 12252 | 4 January 2026 | Supplied the registration procedure, agency timelines, and required annotation of long-term leases on the certificate of title |
| Executive Order No. 113, the 13th Negative List | 2 May 2026 | Consolidated the 2022 statutes into the negative list; stated the telecommunications reciprocity position at 100% with reciprocity and 50% without; confirmed 100% for solar, wind and tidal projects; opened retail enterprises below the ₱25,000,000 threshold to 40% foreign equity; re-imposed a 40% cap on military materiel |
What has not changed. The constitutional prohibition on foreign acquisition of private land, and the narrow exceptions to it. The Anti-Dummy Law, whose operative text dates from 1936 as amended through 1975. And Presidential Decree No. 471, which still sets 25 years renewable once as the lease ceiling for foreigners without a registered investment, and which Republic Act No. 12252 expressly preserved.
Nominee disclosure has not changed either, and readers who assume it arrived in 2026 are looking at the wrong date. Beneficial ownership disclosure entered the General Information Sheet in 2019, and the duty of nominee directors, trustees and shareholders to name their nominators has been in force since SEC Memorandum Circular No. 1, series of 2021. What the 2026 rules added is verification and access, not the obligation itself. Filings made between 2021 and 2025 are already on the record.
Liberalisation has been real and it has been specific. It has not touched the constitutional position, and it has not made nominee arrangements safer.
The guides
September 8, 2026 · draft, awaiting review
Foreign Ownership Limits in the Philippines Under the 13th Negative List
How the Philippine Foreign Investment Negative List works under Executive Order No. 113, the List A and List B entries, and the sectors where the percentage is not the whole answer.
September 7, 2026 · draft, awaiting review
The Anti-Dummy Law and Nominee Shareholders in the Philippines
When Commonwealth Act No. 108 applies, what it prohibits, the current penalties, what foreign nationals may lawfully do, and what the 2026 beneficial ownership disclosure rules changed for nominee arrangements.
September 7, 2026 · draft, awaiting review
Minimum Capital for a Foreign-Owned Company in the Philippines
How much capital a foreign-owned Philippine company needs: the Foreign Investments Act thresholds, the US$100,000 conditions, and how retail trade works differently after the 13th Negative List.
September 8, 2026 · draft, awaiting review
Choosing a Philippine Entity: Corporation, Branch, Representative Office, Headquarters or OPC
How to choose between a Philippine subsidiary, branch office, representative office, RHQ, ROHQ and One Person Corporation, compared on income capacity, liability and tax rather than capital alone.
September 8, 2026 · draft, awaiting review
How Long a Foreigner Can Lease Land in the Philippines
The two lease regimes for foreigners in the Philippines: 25 years renewable once under Presidential Decree No. 471, and up to 99 years for registered investors under Republic Act No. 12252 and its 2026 implementing rules.
How this section is maintained
Every guide in this section carries the name and roll number of the attorney responsible for it, and the date its legal content last changed. A review that changes nothing does not move that date, which is why it is the only date shown.
How guides are written, who reviews them, how the dates are calculated and how often they are reviewed are all set out in the editorial policy. Where a guide relies on a regulation issued recently enough that agency practice is still forming, that is stated on the page rather than left for the reader to discover.
The firm's work in this area is described on the foreign entry and market entry practice page.
Speaking to the firm. These guides set out the general position. Whether a particular activity is restricted, and what structure fits a particular investment, depends on facts these pages cannot cover. Contact the firm to arrange an initial consultation. A conflicts check comes first. Do not send documents or details you consider confidential until the firm has checked whether it is able to act and has agreed in writing to act for you.
The guides in this section state the law as at the date shown on each page. They are general information about Philippine law and not legal advice, and reading them does not create a lawyer-client relationship.