Foreigners can own condominiums and buildings in the Philippines — but not land.
Still, the law provides several legal and secure pathways to property investment through long-term leases, corporate ownership, and joint ventures.
This guide breaks down every option clearly — what’s allowed, what’s not, and how to protect your investment from costly legal pitfalls.
Fast Answers: What Foreigners Can and Cannot Own in the Philippines
If you’re a foreign investor, expat, or dual citizen considering property in the Philippines, here’s the truth in plain language:
Foreigners cannot own land — whether agricultural, residential, or commercial — but they can own condominium units, buildings, and long-term lease rights under Philippine law.
Ownership laws are rooted in the 1987 Constitution, designed to preserve national control of land while still encouraging foreign capital, business, and real estate investment through legal channels.
If you plan to buy or develop property, start here. These quick facts show exactly what’s legal, what’s restricted, and what’s risky so you can structure your investment the right way — and stay compliant from day one.
“Allowed vs. Not Allowed”
| Allowed for Foreigners | Not Allowed for Foreigners |
|---|---|
| Ownership of condominium units, provided that foreign ownership in the entire building does not exceed 40% under Republic Act No. 4726 (The Condominium Act). | Direct ownership of land, whether titled or untitled. |
| Ownership of buildings or improvements constructed on leased land (the land itself must remain Filipino-owned). | Purchase of agricultural, industrial, or residential land in a foreigner’s personal name. |
| Long-term land leases of up to 25 years, renewable once for another 25 years under the Investor’s Lease Act (RA 7652). | Participation in nominee arrangements that disguise ownership — these are illegal and unenforceable. |
| Investment in a Philippine corporation with up to 40% foreign equity; the remaining 60% must be Filipino-owned. | Acquisition of land through dummies or unregistered transfers, which may lead to forfeiture and criminal penalties. |
| Ownership through inheritance (succession), though inherited land must be sold or transferred after succession if the heir is not a Filipino citizen. | Ownership of public domain land or forest/agricultural zones not classified as alienable and disposable. |
💡 Law Tip: The 40% condominium ownership limit applies to the entire project, not per unit. Always confirm the developer’s current foreign ownership ratio before buying.
Why This Matters: Value, Risk & the Real Investment Picture
Foreign ownership restrictions aren’t just legal fine print — they define how much control, profit, and flexibility you actually have over your property. Whether you’re an investor eyeing long-term returns or an expat seeking a permanent base in the Philippines, the ownership structure you choosedetermines your ROI, financing options, and exit strategy.
Understanding these limits early helps you avoid costly mistakes, structure your assets smartly, and position your investment for sustainable growth.
When done correctly, investing under Philippine foreign ownership laws can still deliver impressive yields and strong portfolio diversification.
- Condominium ownership remains the most straightforward route. Prime units in Makati, BGC, and Cebu typically generate 5% to 6.5% annual rental yields, according to Colliers Philippines 2025 data.
- Long-term leases let foreigners enjoy land use for decades — ideal for holiday villas, industrial sites, or resort developments — without breaching constitutional limits.
- Corporate partnerships and joint ventures allow foreign entities to join large-scale developments legally, provided the Filipino equity requirement (60%) is honored.
- Lease-to-own schemes, though less common, can provide transitional control when structured properly with legal counsel.
But when done wrong? Expect disputes, voided contracts, and potential loss of capital. Compliance isn’t bureaucracy — it’s protection.
Condo ownership delivers higher liquidity and safety, while corporate partnerships provide control with greater complexity.
“Ownership defines not just your rights — but your leverage. The smartest investors in Philippine real estate are those who learn the rules, then play within them.”
Foreign ownership isn’t a roadblock — it’s a filter for serious investors. Those who plan correctly often outperform the market because they understand how to work within the rules, not around them.
Before you commit to a purchase or partnership, always clarify your end goal — rental income, personal use, or capital appreciation. The structure you choose will dictate not only your legal standing but also your future returns.
Legal Framework: The Laws Governing Foreign Ownership in the Philippines
Key Laws That Define Foreign Ownership Rights:
Foreign ownership of property in the Philippines is guided by a constitutionally rooted legal framework designed to protect national land ownership while allowing foreign investment participation through safe, lawful structures.
At its core, the law strikes a balance — land remains reserved for Filipino citizens and corporations with majority Filipino ownership, but foreign nationals are granted specific rights to own condominium units, lease land, and invest through registered corporations.
Several major statutes govern these rights, each covering a different property category or transaction type. Together, they form the legal backbone of all foreign property ownership and investment activity in the Philippines.
Understanding these laws — not just in theory but in application — is essential before signing any sales contract, corporate setup, or long-term lease. Below is a simplified breakdown of the key legal instruments every foreign investor should know.
📜 1987 Philippine Constitution, Article XII, Section 7
Restricts land ownership to Filipino citizens and corporations with at least 60% Filipino ownership.
🏢 Republic Act No. 4726 — The Condominium Act
Allows foreigners to own up to 40% of condominium units within a project.
🧾 Republic Act No. 7652 — The Investor’s Lease Act
Permits foreign individuals or entities to lease private land for 25 years, renewable for another 25.
💼 Republic Act No. 7042 — The Foreign Investments Act
Defines limits on foreign equity participation in various industries, including landholding.
⚙️ Republic Act No. 11659 — The Public Service Act (Amended 2022)
Opens certain sectors to full foreign ownership but keeps landholding restricted.
🧱 Corporation Code of the Philippines (as amended by the Revised Corporation Code of 2019)
Governs formation and equity composition of corporations, including foreign participation.
Summary of the 1987 Philippine Constitution (Article XII, Section 7)
The Constitution explicitly states that land ownership is reserved for Filipino citizens or corporations that are at least 60% Filipino-owned. Foreigners may, however, own condominium units and enter long-term lease agreements. This provision ensures national patrimony while maintaining channels for legitimate foreign participation in real estate.
Summary of Republic Act No. 4726 — The Condominium Act
Enacted in 1966, this law allows condominium corporations to hold ownership of the land and distribute ownership of individual units. Foreigners may legally own up to 40% of all units in a project, provided that Filipino ownership remains the majority. The Condominium Act is the foundation for foreign investment in Philippine high-rise developments.
Summary of Republic Act No. 7652 — The Investor’s Lease Act
Passed in 1993, this act allows foreign individuals and corporations to lease private lands for up to 25 years, renewable once for another 25. Leased property may be used for residential, commercial, or industrial purposes, and leases must be registered with the Registry of Deeds to be enforceable.
Summary of Republic Act No. 7042 — The Foreign Investments Act of 1991 (as amended by RA 8179)
This law governs the entry and operation of foreign investors in the Philippines. It specifies which sectors are open or restricted to foreign ownership and sets limits for landholding corporations. While the act promotes liberalization, it reinforces that real estate ownership remains restricted to Filipino-majority entities.
Summary of Republic Act No. 11659 — The Public Service Act (Amendments, 2022)
The 2022 amendments opened several key sectors — telecommunications, transportation, and utilities — to 100% foreign ownership. However, the reforms did not amend land ownership restrictions. Foreign investors may participate fully in these industries but must still comply with the 60/40 rule for any land acquisition.
Summary of the Revised Corporation Code (Republic Act No. 11232, 2019)
The revised code modernized corporate governance and simplified registration, allowing greater transparency for foreign investors. It reaffirmed the requirement for Philippine corporations with land ownership to maintain at least 60% Filipino equity and improved monitoring of beneficial ownership through SEC filings.
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The Philippine legal framework for foreign ownership isn’t meant to discourage investment — it’s meant to protect both the investor and the integrity of property ownership. Those who navigate within the law gain clear titles, enforceable contracts, and peace of mind.
By understanding the constitutional limits and how to lawfully work around them through condominium ownership, long-term leases, or properly structured corporations, foreign investors can confidently build and grow their Philippine real estate portfolio
Property Types: What Foreigners Can Own (and How Each One Works)
Foreign ownership laws in the Philippines vary depending on the type of property. Each category — land, condominiums, buildings, or leased property — follows a distinct set of legal parameters. Below are the key rules, examples, and practical insights for each property type so investors can confidently identify what’s legally allowed, how to hold ownership, and what to avoid.
Land Ownership: Strictly for Filipinos, with Limited Exceptions
The Philippine Constitution prohibits foreign individuals from owning land outright. This includes residential, commercial, industrial, and agricultural land. The intent of the law is to preserve national patrimony while allowing foreigners to participate in development through lawful alternatives such as long-term leases or corporate structures.
Foreigners married to Filipino citizens may acquire land, but the title must be registered solely in the Filipino spouse’s name. If the Filipino spouse passes away and the foreigner inherits the land, they are legally required to sell or transfer the property to a qualified Filipino citizen within a reasonable period.
Another narrow exception exists through hereditary succession (inheritance by law, not by will). However, even this ownership is temporary — the foreign heir cannot retain the land indefinitely.
Condominiums: The Most Accessible Legal Option for Foreign Ownership
Condominiums are the most common and legally secure form of property ownership for foreigners in the Philippines. Under the Condominium Act (RA 4726), foreigners may own up to 40% of all units in a condominium project, as long as at least 60% of the units remain owned by Filipino citizens or entities.
The ownership structure is simple: the condo corporation owns the land, and each unit owner holds a title to their individual unit (CCT – Condominium Certificate of Title). This makes condo purchases ideal for expats, investors, and retirees seeking urban properties with minimal legal complexity.
Condo ownership also offers easier resale and rental options, making it one of the few asset classes with both liquidity and yield potential.
Buildings & Improvements: Yes, You Can Own the Structure (Not the Soil Beneath It)
Foreigners may legally own buildings or improvements constructed on leased land, provided they comply with building permit and lease registration requirements. Ownership of the structure is separate from ownership of the land, and the building title (if registered) can be under the foreigner’s name.
This structure is common in industrial leases, commercial facilities, and resort developmentswhere the foreign entity owns the improvements while leasing the underlying land.
However, the rights to use the land are limited to the lease term. Once the lease expires (or is not renewed), ownership of the land reverts fully to the Filipino lessor, and the building typically reverts as well unless the contract specifies otherwise.
Long-Term Leases: The Key Legal Pathway to Use Land Without Owning It
The Investor’s Lease Act (RA 7652) gives foreigners the right to lease private land for 25 years, renewable once for another 25 years. This framework provides up to 50 years of lawful land use, giving investors control over development while remaining compliant with ownership restrictions.
Leases can cover residential, commercial, or industrial property, but must be:
- Registered with the Registry of Deeds, and
- Notarized to become enforceable.
Long-term leases are particularly advantageous for resorts, factories, agricultural projects, or expat housing, where land control — not ownership — is the priority.
“Foreign investors often underestimate the power of long-term leases. A 50-year lease with renewal rights can outlast many ownership structures — without breaching the Constitution.”
Every property type in the Philippines carries its own legal boundaries and investment logic. For foreigners, the choice isn’t about whether ownership is possible — it’s how to structure it correctly. Condominiums deliver liquidity, leases grant control, and buildings offer operational flexibility. The secret is understanding where your rights end and your opportunities begin.
Practical Ownership Structures: Legal Ways for Foreigners to Invest in Philippine Real Estate
While foreigners can’t own land directly, Philippine law offers several legitimate and strategic pathways to participate in the real estate market — from buying condos to forming joint ventures. Each structure carries its own level of control, risk, and potential return, making it crucial to select one that aligns with your long-term goals.
Below are the five most common and legally compliant ownership structures used by foreign investors, expats, and multinational entities.
1. Buying a Condominium Unit — The Simplest and Most Secure Path
Purchasing a condominium unit remains the most straightforward route for foreigners to own property in the Philippines. Under the Condominium Act (RA 4726), foreign ownership is allowed up to 40% of total project units, ensuring compliance with constitutional limits.
Ownership is evidenced by a Condominium Certificate of Title (CCT) — a clean, transferable title under the foreign buyer’s name. Most condo projects in key business districts (BGC, Makati, Cebu, Ortigas) are structured with this in mind, making them the preferred choice for expats, retirees, and foreign investors.
Condo ownership also opens access to bank financing, rental income, and resale opportunities, which are typically unavailable in other ownership structures.
2. Entering a Long-Term Land Lease — Control Without Ownership
The Investor’s Lease Act (RA 7652) allows foreigners to lease private land for up to 25 years, renewable once for another 25 years. This effectively grants 50 years of use and enjoyment rights, enabling investors to build homes, resorts, or commercial properties while keeping ownership of the land under a Filipino citizen or corporation.
This structure is ideal for:
- Retirees wanting to build homes on Philippine soil.
- Foreign corporations establishing industrial or commercial operations.
- Developers of hotels or agricultural ventures seeking control without violating ownership laws.
Key requirements include lease registration with the Registry of Deeds and notarization, ensuring the leasehold is enforceable and recognized under Philippine law.
3. Forming a Philippine Corporation — Strategic Ownership via a 60/40 Structure
A Philippine corporation with at least 60% Filipino ownership and up to 40% foreign equity may own land, buildings, or other real property. This setup enables foreign participation in real estate development, leasing, and management without breaching constitutional limits.
Foreign investors often prefer this route when:
- Engaging in joint ventures or commercial projects.
- Developing or managing mixed-use properties.
- Building offices or industrial complexes requiring land ownership.
The corporation must be registered with the Securities and Exchange Commission (SEC) and maintain genuine Filipino control — not just nominal. Noncompliance may result in forfeiture or dissolution.
4. Joint Venture Partnerships — Shared Ownership, Shared Rewards
A joint venture (JV) is a formal agreement between a foreign entity and a Filipino partner to develop, own, or operate a real estate project. This setup allows foreigners to participate in landholding indirectly while maintaining equity compliance through the Filipino partner.
Joint ventures are common in resort developments, industrial parks, and commercial complexeswhere foreign partners contribute capital or expertise, and Filipino partners hold the land or majority equity.
The terms of profit-sharing, management, and exit must be clearly defined in the JV agreement, typically filed with the SEC.
5. Ownership Through Marriage or Inheritance — Limited but Lawful Routes
A foreigner married to a Filipino citizen may acquire property jointly, but the title must be registered under the Filipino spouse’s name. The foreign spouse cannot be a registered co-owner.
Upon the Filipino spouse’s death, the foreign spouse may inherit the property, but ownership must be transferred or sold to a qualified Filipino within a reasonable period. This rule prevents indirect land ownership by foreign nationals while still respecting marital and inheritance rights.
In cases of hereditary succession (inheritance by operation of law), a foreign heir may inherit land but cannot keep it indefinitely. They must sell it to a Filipino citizen to maintain compliance.
Each structure offers different advantages and legal safeguards. Condo ownership offers simplicity. Long-term leases provide control. Corporations and JVs deliver scale and profitability. Marital and inheritance rights offer unique, personal exceptions.
The best approach depends on your investment purpose, time horizon, and appetite for administrative complexity. A licensed broker and property lawyer can help you evaluate which structure gives you both compliance and returns.
Due Diligence Checklist: Verify Everything Before You Buy
Before signing any sale, lease, or investment agreement in the Philippines, every foreign buyer must complete a comprehensive due diligence process. This ensures that the property you’re acquiring is clean, compliant, and legitimately transferable.
In the Philippines, due diligence isn’t optional — it’s your strongest protection against title fraud, double-selling, unpaid taxes, and invalid ownership claims.
Below is a step-by-step checklist you or your broker should follow before paying any reservation or down payment.
Title Verification & Property Validation Checklist
1. Secure a Certified True Copy of the Title (TCT or CCT)
- Obtain it directly from the Registry of Deeds to confirm the property’s authenticity.
- Verify that the title is clean — no liens, encumbrances, or adverse claims.
2. Check for Annotations on the Title
- Review all entries at the back of the title for mortgages, court orders, or notices of lis pendens.
- If unclear, ask a lawyer or broker to explain the implications.
3.;Validate Ownership and Seller Identity
- Ensure the seller’s name matches the title.
- Request government-issued IDs and tax identification numbers (TINs).
- For corporations, verify SEC registration and Articles of Incorporation.
4. Confirm Zoning and Land Classification
- Verify with the City Planning Office or DENR if the property is residential, commercial, or agricultural.
- Land classified as “forest” or “protected area” cannot be sold or leased legally.
5. Obtain a Latest Tax Declaration
- Check that property taxes are fully paid.
- Compare property area, location, and boundaries with those on the title.
6. Inspect Actual Property Boundaries
- Hire a licensed geodetic engineer to conduct a relocation or boundary survey.
- Confirm that physical boundaries match the technical description on the title.
7. Verify Developer or Project Compliance (for Condos/Subdivisions)
- Ask for the developer’s License to Sell and Certificate of Registration from the DHSUD (formerly HLURB).
- Request the project’s Master Deed with Declaration of Restrictions to check foreign ownership caps.
8. Check BIR and LGU Taxes
- Confirm that Capital Gains Tax, Documentary Stamp Tax, and Transfer Taxes are settled or accounted for.
- Unpaid taxes can delay title transfer or void the sale.
9. Review Contracts and Terms Thoroughly
- Ensure the Contract to Sell, Lease Agreement, or Deed of Sale is reviewed by a lawyer.
- Confirm clauses on termination, renewal, and refund conditions.
10. Register the Transaction Properly
- All deeds and leases exceeding one year must be notarized and registered with the Registry of Deeds to be enforceable under Philippine law.
“Never pay until the title is verified — twice.”
Due diligence protects both foreign investors and Filipino sellers. It validates the transaction, ensures legal compliance, and guards against fraud. A clean title and proper registration are worth more than any discount or rush deal.
Work only with licensed brokers, lawyers, and accredited developers — they are your first line of defense in Philippine real estate.
Taxes & Financing: What Every Foreign Buyer Should Know
Taxes and financing terms can make or break your investment returns. Whether you’re purchasing a condominium, leasing land, or investing through a corporation, it’s crucial to understand how Philippine tax laws apply to your transaction — and how financing works for foreign nationals.
While the Philippines offers competitive real estate values, many first-time investors overlook capital gains, transfer fees, and documentary taxes, which can add up to 9% to the total cost of acquisition. Let’s break down the key taxes, fees, and financing options you’ll likely encounter.
Real Estate Tax & Fee Comparison
| Transaction Type | Tax / Fee | Rate / Basis | Who Pays | Key Notes |
|---|---|---|---|---|
| Sale of Condominium Unit | Capital Gains Tax (CGT) | 6% of the higher between selling price or zonal value | Seller (may be passed to buyer) | Paid to BIR before title transfer. |
| Documentary Stamp Tax (DST) | 1.5% of selling price or zonal value | Buyer | Required for Deed of Sale registration. | |
| Transfer Tax | 0.5–0.75% (varies by city/municipality) | Buyer | Payable to the Local Government Unit (LGU). | |
| Registration Fee | Around 0.25% of property value | Buyer | Paid at Registry of Deeds for title issuance. | |
| Long-Term Lease Agreement | Documentary Stamp Tax | ₱3.00 for every ₱200 of total rent | Lessee | Applies to commercial or residential leases. |
| Value-Added Tax (VAT) | 12% (if lessor is VAT-registered) | Lessee | May apply to high-value or commercial leases. | |
| Corporate Property Purchase | Withholding Tax on Property Transfer | 1.5–6% depending on transaction | Buyer (corporation) | Applicable to share or asset acquisitions. |
| Capital Gains Tax on Shares | 15% on net capital gains | Seller | For sale of corporate shares related to real property. |
For most condo purchases, total transaction costs (including taxes and fees) range from 8% to 9% of the property’s selling price. For example, on a ₱10 million condominium, expect roughly ₱850,000 in combined costs before title transfer is complete.
Buyers should always verify which party shoulders each tax — in practice, capital gains tax is often negotiated between buyer and seller, especially in secondary sales. Always request a BIR Certificate Authorizing Registration (CAR) before paying in full — this document proves taxes are cleared and allows the title to be transferred under your name.
Financing Options for Foreigners
While foreign buyers in the Philippines typically purchase properties in cash, some banks and developers now extend limited financing options for foreigners who meet certain criteria.
Available Financing Options Include:
- Local Bank Loans: Offered by select banks such as BDO, Metrobank, and HSBC Philippines to resident foreigners with ACR I-Cards, stable local income, or long-term visas (e.g., SRRV).
- Developer In-House Financing: Common for preselling condos; typically 10–20% down payment with flexible installment plans over 3–5 years.
- Offshore Financing: Foreigners may secure loans from their home country using international banks with Philippine partnerships.
- Corporate Lending: For foreign-owned corporations, local banks may offer project financing for mixed-use or commercial developments under SEC registration and equity compliance.
Most banks cap loan-to-value ratios at 60–70% for foreigners and may require mortgage registration fees and fire insurance.
Expert Tip: Always compute the all-in cost — property price + taxes + legal fees + financing interest — before committing. For foreign buyers, being financially conservative ensures flexibility in case of delays, currency shifts, or resale challenges.
🧾 Learn More About Real Estate Taxes
Taxes and financing shape your investment outcome as much as location or timing. By anticipating all transaction costs and confirming your financing eligibility early, you’ll avoid unpleasant surprises and ensure smooth title transfer, compliance, and long-term profitability.
Smart investors don’t just buy — they budget, verify, and plan their exit from day one.
💡 Law Tip: Always request the BIR “Certificate Authorizing Registration” before final payment. Without it, the title cannot legally transfer to your name.
Common Scams & Red Flags: Spot the Tricks Before They Cost You
The Philippine property market is booming — and unfortunately, so are the scams that come with it. Every year, investors (both local and foreign) lose millions to fake listings, illegal agents, forged titles, and unregistered developers.
As a foreign buyer, you’re especially vulnerable if you don’t know how to verify documents or who to trust. This section breaks down the most common real estate scams and, more importantly, shows you exactly how to avoid them before signing anything or sending money.
Scam Type
1. Fake Titles and Forged Documents
Fraudsters create convincing fake land titles (TCT/CCT) and tax declarations to sell non-existent or mortgaged properties.
2. Nominee or Dummy Ownership Schemes
Illegal arrangements where a Filipino acts as a “front” owner for a foreign buyer to circumvent land ownership restrictions.
3. Unlicensed Brokers or Agents
Individuals pretending to be accredited brokers but who are not registered with the Professional Regulation Commission (PRC).
4. Double Selling
One property sold to multiple buyers — often due to non-registered contracts or unverified titles.
5. Unregistered Developers and Projects
Developers offering pre-selling units without a License to Sell or DHSUD registration, often resulting in halted projects.
6. Overpriced or Inflated Lease Agreements
Landlords overcharge foreign lessees, citing “foreigner rates,” or insert vague renewal clauses favoring them.
7. Unrecorded Payments or Cash Deals
Landlords overcharge foreign lessees, citing “foreigner rates,” or insert vague renewal clauses favoring them.
How to Avoid Them
1. Always Verify Titles at the Registry of Deeds
Request a Certified True Copy and compare it with the seller’s copy. Watch for tampered fonts, missing seals, or smudged serial numbers.
2. Never Engage in Nominee Arrangements
These are illegal and unenforceable. Use legitimate alternatives like long-term leases or corporate partnerships instead.
3. Work Only with Licensed Real Estate Brokers
Verify the broker’s PRC license number and check it against the DHSUD or PRC online registry.
4. Register All Contracts and Transactions
A notarized and registered deed prevents double-selling. Always file your sale or lease with the Registry of Deeds.
5. Check Developer Accreditation
Ask for a copy of the DHSUD License to Sell and Certificate of Registration. If they can’t show these, walk away.
6. Hire Legal Counsel for Contract Review
A Philippine real estate lawyer can identify red flags in lease or sale agreements before they become costly disputes.
7. Insist on Documented Payments
Pay only through traceable channels — bank transfers, escrow accounts, or manager’s checks. Keep every receipt and contract copy.
🧾
Always verify title authenticity at the Registry of Deeds.
💼
Transact only with licensed and PRC-accredited real estate brokers.
🧠
Educate yourself — scams rely on lack of due diligence.
⚠️
Never join nominee ownership schemes — they’re illegal and high-risk.
📄
Register every sale or lease to protect your ownership rights
💰
Use traceable payments and official receipts for every transaction.
Legitimate transactions always leave a paper trail — fake ones never do. If a deal feels rushed, secretive, or “too good to be true,” it probably is. The safest deals in Philippine real estate are those backed by verified documents, professionals, and registered transactions.
Before you commit, verify twice and trust once.
Real-World Scenarios: Legal Paths Foreign Investors Are Using Today
Understanding the law is one thing — seeing it applied in real life is another. These case studies illustrate how foreign investors, expats, and multinational firms legally structure their property holdings in the Philippines. Each approach is compliant, practical, and tailored to different goals — from residential living to commercial expansion.
Scenario 1: Expat Investor Buying a Condo for Rental Income
Investor Profile: Japanese professional working in Metro Manila.
Goal: Passive income and long-term capital appreciation.
Structure Used: Direct purchase of a condominium unit under RA 4726 (The Condominium Act).
She bought a 32-sqm unit in BGC for ₱7 million. After interior upgrades, the unit rented for ₱40,000 monthly — generating a 6% net annual yield. Ownership was 100% legal, title under her name, and the developer confirmed the foreign ownership ratio remained below 40%.
Result: Simple compliance, consistent returns, and an appreciating urban asset — fully within Philippine law.
Scenario 2: Resort Development via a Joint Venture
Investor Profile: Australian entrepreneur with hospitality experience.
Goal: Build and operate a sustainable resort on leased land.
Structure Used: Joint venture between a Filipino landowner and a foreign hospitality investor.
The Filipino partner retained land ownership while the foreign partner provided funding and expertise. A joint venture corporation (60/40) was registered with the SEC, ensuring legal compliance. Profits were divided proportionally, and the resort’s improvements were registered under the corporation’s name.
Result: A profitable, eco-friendly resort fully compliant with constitutional land restrictions — both parties gained equity and long-term income.
Scenario 3: Long-Term Lease for a BPO Office Site
Investor Profile: U.S.-based outsourcing company expanding operations to Cebu.
Goal: Establish a regional office hub while maintaining asset flexibility.
Structure Used: 25-year renewable land lease under RA 7652 (Investor’s Lease Act).
The company leased a 2,000-sqm lot for 25 years, constructed its own 4-story office building, and registered the lease with the Registry of Deeds. At lease end, renewal rights ensure continuity for another 25 years. The building remains under the lessee’s name, with full operational control.
Result: 100% foreign business control without breaching land ownership rules — a textbook case of compliant commercial expansion.
These scenarios show that foreign ownership restrictions don’t close the door — they simply define smarter entry points. Whether buying a condo, developing a resort, or expanding a global company, every investor can find a structure that fits both the letter and spirit of Philippine law.
Sample Clauses & Templates: Build Legally Secure Real Estate Contracts
Even a well-intentioned deal can fall apart if the contract isn’t watertight. The right legal clausesprotect foreign investors, define responsibilities clearly, and prevent costly disputes later on. Below are sample provisions for a long-term land lease and a joint venture (JV) agreement, written in plain but enforceable legal language.
Use these only as a reference — actual contracts should always be reviewed and notarized by a licensed Philippine attorney.
Long-Term Lease Clause Sample
SECTION 5 – LEASE TERM AND RENEWAL
The LESSOR hereby leases to the LESSEE the property described in Annex “A”
for a period of TWENTY-FIVE (25) YEARS commencing from the signing date of this Agreement.
The LESSEE shall have the exclusive right to use and enjoy the leased premises
for the agreed purpose stated in Section 3, and shall have the option to renew
this Lease for an additional TWENTY-FIVE (25) YEARS upon written notice
to the LESSOR at least one (1) year prior to expiration of the original term.
All improvements, structures, and fixtures constructed by the LESSEE on the leased premises
shall remain the property of the LESSEE during the term of this Lease,
and may be removed or retained upon expiration, unless otherwise agreed in writing.Joint Venture Clause Sample
ARTICLE IV – EQUITY PARTICIPATION AND MANAGEMENT
The PARTIES agree to form a JOINT VENTURE CORPORATION (the “Corporation”)
with an authorized capital stock of PHP 10,000,000.00, divided into 100,000 shares
at PHP 100.00 per share.
The FILIPINO PARTY shall subscribe to SIXTY THOUSAND (60,000) shares,
representing sixty percent (60%) of the total issued shares,
and the FOREIGN PARTY shall subscribe to FORTY THOUSAND (40,000) shares,
representing forty percent (40%) of the total issued shares.
The PARTIES shall share in profits, losses, and management participation
in proportion to their respective equity holdings. The Corporation shall comply
with all foreign equity limitations under the 1987 Philippine Constitution and
the Foreign Investments Act (RA 7042).Contracts are the final line of defense for every investor. Even if the deal is straightforward, a few well-crafted clauses can mean the difference between a protected investment and a legal nightmare. Always ensure that every page — from the title to the fine print — is drafted or reviewed by a qualified Philippine real estate attorney before signing.
Frequently Asked Questions (FAQ): Foreign Property Ownership Explained
Even experienced investors can get tangled in the details of Philippine property law. These are the most common questions asked by foreign buyers, expats, and international corporations — all answered with clear, legally grounded explanations you can rely on.
Each question below uses an expandable Details Block for easy navigation — ideal for mobile readers and quick reference.
Can a foreigner own land in the Philippines?
No. The 1987 Philippine Constitution restricts land ownership to Filipino citizens and corporations that are at least 60% Filipino-owned.
Foreigners may not directly own land but can lease private land for up to 25 years, renewable once for another 25, or own condominium units under Republic Act No. 4726 (The Condominium Act).
Can a foreigner own a condominium unit?
Yes. Under The Condominium Act, foreigners may own condominium units as long as foreign ownership in the entire project does not exceed 40%.
The ownership title issued is a Condominium Certificate of Title (CCT) — fully transferable and inheritable, provided the project remains within the 40% foreign ownership cap.
Can a foreigner inherit land in the Philippines?
Yes, but only through hereditary succession (by operation of law).
If a foreigner inherits land from a Filipino relative, they can temporarily hold it but must sell or transferit to a Filipino citizen within a reasonable period.
Willed or nominee transfers designed to bypass the restriction are invalid under Philippine law.
Can foreigners invest through corporations?
Absolutely. Foreigners can invest in Philippine corporations with up to 40% equity.
These corporations can own land, develop property, or engage in real estate business, provided they comply with SEC registration and Filipino majority control.
Foreign investors often use this method for large-scale projects such as resorts, commercial buildings, and industrial parks.
What is a long-term land lease, and how does it work?
Under RA 7652 (Investor’s Lease Act), foreigners may lease private land for 25 years, renewable once for another 25.
The lease must be notarized and registered with the Registry of Deeds. The lessee (foreign investor) may build structures on the land and hold ownership of those improvements during the lease term.
Is it legal to buy property through a Filipino “nominee”?
No. Using a Filipino citizen as a “nominee” or “dummy owner” to hold land on behalf of a foreigner is illegal under the Anti-Dummy Law (Commonwealth Act No. 108).
Contracts using nominee ownership are unenforceable in court, and both parties may face fines, imprisonment, or property forfeiture.
Always use legitimate alternatives such as condo ownership, corporate structuring, or long-term leases.
Can a foreigner marry a Filipino and buy land under their spouse’s name?
Yes, but the property must be registered exclusively under the Filipino spouse’s name.
The foreign spouse cannot appear on the title or hold direct ownership rights.
If the Filipino spouse dies, the foreign spouse may inherit the property but is required by law to sell or transfer it to a Filipino citizen within a reasonable period.
Are there taxes specific to foreign buyers?
Foreign buyers pay the same real estate taxes as Filipino citizens — Capital Gains Tax (6%), Documentary Stamp Tax (1.5%), Transfer Tax (0.5–0.75%), and Registration Fees (0.25%).
However, non-residents may face additional withholding tax obligations when selling or renting out property, depending on their country’s tax treaties with the Philippines.
Can foreigners get a mortgage or property loan in the Philippines?
Some local banks such as BDO, Metrobank, and HSBC Philippines offer limited financing to foreign nationals who:
- Hold long-term visas (SRRV, 13A, or work permits);
- Have residency and local income sources; and
- Are purchasing condo units, not land.
Loan-to-value ratios usually range from 60–70%, and borrowers may be required to open a peso account and register the mortgage with the Registry of Deeds.
Can a foreigner sell property in the Philippines?
Yes — foreigners may sell their legally owned properties, such as condominium units or buildings.
The sale follows the same process as any local transaction, subject to tax clearance and title transferthrough the Registry of Deeds.
Proceeds may be repatriated abroad, provided all taxes are settled and the foreign ownership was legally compliant at the time of acquisition.
Are foreigners allowed to own agricultural land?
No. Agricultural land ownership is strictly limited to Filipino citizens and corporations with at least 60% Filipino ownership.
However, foreigners may lease agricultural land for business purposes under RA 7652, provided it’s classified as alienable and disposable by the Department of Environment and Natural Resources (DENR).
What’s the safest way for a foreigner to invest in Philippine real estate?
The safest and most compliant routes are:
- Buying a condominium unit (under the 40% limit).
- Entering a long-term land lease for residential or business use.
- Forming a Philippine corporation with proper equity structure.
Combine these with professional legal review, tax planning, and title verification for maximum security.
Foreign ownership can be complex, but it’s entirely manageable with the right legal guidance and professional partners. When in doubt, always confirm details with a licensed broker and a Philippine property lawyer — they’re the best shield against costly mistakes and misinformation.
Next Steps: A Step-by-Step Guide to Buying Property Safely in the Philippines
Foreign ownership in the Philippines can be incredibly rewarding — but only if you approach it strategically, legally, and with the right professionals by your side. Whether you’re eyeing a condo in the city, a long-term lease on a beachfront property, or a corporate investment in commercial real estate, follow these five essential steps to ensure every transaction is safe, compliant, and profitable.
Step-by-Step Process
1. Define Your Goal and Ownership Structure
- Determine whether your investment is for residential use, leasing income, or business development.
- Choose the structure that fits your objective — condo ownership, long-term lease, or corporate partnership.
2. Hire a Licensed Broker and Legal Counsel
- Work only with PRC-accredited real estate brokers and Philippine-licensed lawyers.
- They’ll guide you through verification, due diligence, and legal structuring that ensures compliance with the 1987 Constitution and RA 4726.
3. Conduct Full Due Diligence
- Verify property titles at the Registry of Deeds and confirm the developer’s DHSUD License to Sell.
- Check for unpaid taxes, liens, or encumbrances. Remember: never pay until the title is verified — twice.
4. Review Contracts and Register the Transaction
- All deeds, leases, or purchase agreements must be notarized and registered with the proper government agencies (BIR, LGU, and Registry of Deeds).
- Ensure that the taxes (CGT, DST, Transfer Tax) are fully settled before transfer of ownership.
5. Secure Tax Clearances and Maintain Compliance
- Obtain a Certificate Authorizing Registration (CAR) from the BIR to finalize title transfer.
- For corporate investors, keep SEC filings updated and ensure proper recording of foreign equity ratios.
These steps aren’t just procedural — they’re your blueprint for protection. Every successful foreign investment in Philippine real estate starts with clear goals, legitimate partners, and verified paperwork. Don’t rely on shortcuts or verbal assurances.
Work with professionals who understand the nuances of Philippine property law, tax compliance, and market dynamics — it’s the smartest insurance policy you’ll ever have.
🗓️ Schedule a Consultation
With the right structure and support, foreign investors can thrive in the Philippine real estate market — legally, confidently, and profitably. Begin your journey today, one verified step at a time.
Resources: Where to Verify, Register, and Learn More
Every legitimate real estate transaction in the Philippines should be supported by verified government records and legal filings. Whether you’re checking a property title, registering a lease, or validating a developer’s license, the agencies below are your official points of reference.
Bookmark these links and use them for title verification, tax compliance, and corporate documentation — they’re essential tools for safe and lawful investing.
Agency, Role, and Website
| Agency / Office | Primary Role | Official Website |
|---|---|---|
| Land Registration Authority (LRA) | Verifies land and condominium titles; issues Certified True Copies via the Registry of Deeds. | https://www.lra.gov.ph |
| Department of Human Settlements and Urban Development (DHSUD) | Regulates real estate developers and condominium projects; issues Licenses to Sell and Certificates of Registration. | https://www.dhsud.gov.ph |
| Securities and Exchange Commission (SEC) | Registers corporations, joint ventures, and foreign ownership structures; enforces the 60/40 ownership rule. | https://www.sec.gov.ph |
| Bureau of Internal Revenue (BIR) | Administers property-related taxes — Capital Gains, Documentary Stamp, and Withholding Taxes — and issues CARs for title transfer. | https://www.bir.gov.ph |
| Department of Justice (DOJ) | Provides legal interpretations on foreign ownership and contract enforceability under Philippine law. | https://www.doj.gov.ph |
| Professional Regulation Commission (PRC) | Accredits licensed real estate brokers, appraisers, and consultants. Verify agent legitimacy before transacting. | https://www.prc.gov.ph |
| Local Government Units (City/Municipal Assessors & Treasurers) | Handle Real Property Tax assessments, Transfer Tax, and zoning verification. | (Check official city or municipal websites) |
Real estate investment in the Philippines thrives on transparency and verification. The more you rely on official sources, the safer your transaction becomes. Always validate, document, and double-check — it’s not just due diligence, it’s smart investing.
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