100% Foreign Ownership in the Philippines: Which Industries Allow a Wholly Foreign-Owned Company?

100% Foreign Ownership in the Philippines: Allowed by Default, Restricted by Exception

Straight answer: 100% foreign ownership is the default rule in the Philippines, and only activities on the Foreign Investment Negative List carry an equity cap. So the useful question is not "which industries allow foreign ownership" but "which industries are restricted."

Many people assume Philippine companies must always have majority Filipino shareholders. The reality is the opposite. Under the Foreign Investments Act of 1991 (RA 7042, as amended by RA 8179 and RA 11647), a foreign investor may hold up to 100% of a domestic market enterprise unless the activity is restricted by the Constitution, a specific statute, or the Foreign Investment Negative List (FINL). If your activity is not on that list, you can generally set up a wholly foreign-owned company.

Liberalisation has moved fast: the 2022 Public Service Act amendment (RA 11659) redefined what counts as a public utility, and the 2021 Retail Trade Liberalization amendment (RA 11595) cut the capital bar for foreign retailers sharply. Export-oriented enterprises exporting at least 60% of output can almost always be wholly foreign-owned and are exempt from the higher capital threshold. For the formation process, see our complete guide to registering a company in the Philippines.

One boundary to set before anything else: equity can be 100%, but land never can. That restriction sits in the Constitution and is not something the Negative List can relax. Conflating the two is the first mistake most foreign investors make here — see the land section below.

What the Foreign Investment Negative List (List A and List B) Covers

Straight answer: the FINL has two tables — List A holds caps imposed by the Constitution and specific statutes, List B holds restrictions based on security, health and morals, or protection of local small enterprises.

The list is promulgated by executive order and updated periodically (the twelfth edition was issued under Executive Order No. 175 in 2022; always work from the current version).

• List A — constitutional and statutory limits. Caps range from 0% to 40%. Examples: mass media must be 100% Filipino-owned under Article XVI, Section 11 of the 1987 Constitution; advertising is capped at 30% foreign equity; the practice of licensed professions is reserved to Filipinos under Article XII, Section 14 subject to reciprocity; plus small-scale mining and private land ownership.
• List B — security, defence, health, morals and SME protection. Firearms and explosives, certain gaming, and — easily overlooked — domestic-market enterprises with paid-in capital below US$200,000. In other words, being a small business is itself a restricted category.

Three practical points. First, the list is revised, so the current version and the agency's classification govern. Second, classification has grey areas and a single company may run several activities that fall into different categories — one line of business crossing a limit forces the whole structure to be redesigned. Third, what matters is the activity you actually carry on, not how broadly your SEC articles are drafted. Drafting a wide purpose clause does not create room; it more often invites a request to narrow it during registration.

The 60/40 Rule: When Foreign Equity Is Capped at 40%

Straight answer: 60/40 applies only to nationalised or expressly capped activities, and regulators look at actual control rather than at the shareholder register alone.

Where your business falls into a restricted activity, Filipinos must hold at least 60% and foreign equity is capped at 40%. This typically covers private land ownership, certain natural-resource development, and any activity the Negative List caps at 40%.

The critical nuance is that 60/40 is not only about the surface ratio. Philippine practice examines board composition, voting arrangements, the source of funds and who actually runs the business. Using Filipino nominees to reach 60% on paper while foreigners retain real control violates the Anti-Dummy Law (Commonwealth Act No. 108) and can bring criminal liability, invalidation of the arrangement and revocation of the registration. See the Anti-Dummy Law and nominee shareholder risks.

Four lawful alternatives when your activity really is restricted, roughly in order of practicality:

• A genuine Filipino joint venture partner who contributes real capital, carries real risk and participates in governance, with exit and decision rights set out in a shareholders' agreement
• Redesign the business as an export enterprise — at 60% or more exported, you leave the domestic-market framework entirely
• Carve out the restricted step and outsource just that piece to a licensed local provider while you operate the unrestricted remainder
• Switch to franchising or technology licensing — no equity, fees and royalties instead

If your industry is genuinely restricted, our market-entry consulting can cost out these options against each other.

What three recent laws actually opened up

Straight answer: telecommunications, domestic shipping and air transport, railways, airports, express delivery and retail all became far more open between 2021 and 2022 — while electricity transmission and distribution, water, seaports and public transport vehicles stayed inside the public utility category.

• Public Service Act amendment (RA 11659, 2022). It narrowed "public utility" to a defined list — electricity distribution and transmission, petroleum pipelines, water and sewerage pipelines, seaports and public utility vehicles — so the sectors previously treated as utilities but now excluded are no longer bound by 60/40. It also introduced national security review for foreign state-controlled entities and critical infrastructure.
• Retail Trade Liberalization amendment (RA 11595, 2021). The minimum paid-up capital for a foreign retail enterprise was cut to PHP 25,000,000, with a separate per-store investment requirement for operators running more than one outlet. Current figures and conditions govern.
• Foreign Investments Act amendment (RA 11647, 2022). The headcount needed to qualify for the reduced US$100,000 threshold was lowered from fifty to fifteen direct employees, and a new route was added for enterprises endorsed as startups or startup enablers.

How to use this: if your sector was assessed as closed to full foreign ownership more than a couple of years ago, it is worth re-checking against the current rules — a great deal of secondary material online still reflects the pre-amendment position. The converse also matters: liberalised equity does not remove licensing. Telecommunications and aviation still require operating authority from their respective regulators.

Paid-In Capital Thresholds: US$200,000 and the Export-Enterprise Exemption

Straight answer: a domestic-market wholly foreign-owned company generally needs US$200,000 paid in; qualifying cases drop to US$100,000; export enterprises exporting 60% or more are exempt and use the ordinary corporate minimum.

Whether you may own 100% is one question. How much capital you must inject is the one that actually decides whether the project is viable.

• US$200,000 — the general threshold for a domestic market enterprise under Section 8 of the Foreign Investments Act.
• US$100,000 — available if the company uses advanced technology as determined by the competent authority, is endorsed as a startup or startup enabler, or employs at least fifteen direct employees (the figure was fifty before the RA 11647 amendment).
• Exempt — export-oriented enterprises exporting at least 60% of goods or services fall outside the threshold entirely and can be capitalised at the ordinary minimum under the Revised Corporation Code, often only a few thousand pesos.

Do not confuse authorised capital with paid-in capital. The first is a ceiling in your articles; the second is money actually remitted and evidenced by a bank certificate. A frequent failure point for foreign projects is the inward remittance route — register the inward investment with the Bangko Sentral ng Pilipinas where applicable, because that registration is what supports lawful repatriation of profits and capital later.

This is why so many foreign investors structure as export or BPO enterprises: full ownership and a far lower capital bar at the same time. Exact amounts and eligibility follow current SEC and agency rules. Our company setup service will size the leanest compliant structure for your model.

Land and property: equity can be 100%, land cannot

Straight answer: neither a foreign individual nor a company more than 40% foreign-owned may own land in the Philippines. This is a constitutional limit, not a Negative List item, and any "workaround" should be assumed unlawful until a Philippine lawyer says otherwise.

Article XII, Section 7 of the 1987 Constitution restricts the acquisition of private land to Filipino citizens and to corporations at least 60% Filipino-owned. Three lawful routes exist for foreign investors:

• Buy a condominium unit rather than land. Under the Condominium Act (RA 4726) foreign nationals may hold units, provided foreign ownership across the whole project stays within 40%. Always ask whether that quota is already exhausted before you pay a reservation fee.
• Long-term lease of land. The Investors' Lease Act (RA 7652) provides long-term, renewable lease arrangements for qualified foreign investors; the permitted term, investment level and use restrictions follow current rules and the administering agency's determination. Industrial, agro-processing and tourism projects commonly use this route.
• Hold land through a genuine 60/40 joint venture company — subject to everything in the previous section. Buying land in a spouse's or employee's name with a side agreement is the textbook Anti-Dummy scenario.

What about factories and offices? Most foreign manufacturers do not buy land at all — they lease ready-built facilities inside an economic zone, which sidesteps the land restriction and captures fiscal incentives at the same time. Run that comparison before assuming you need to own: see the PEZA economic zone guide.

The Compliant Path: Check the Negative List First, Then Build the Structure

Straight answer: check the list, choose the structure, size the capital, then register. Doing it in any other order is what produces expensive rework.

• Step 1 — check the FINL. Test your core activity and every ancillary activity against Lists A and B. Ancillary lines are the ones that get missed.
• Step 2 — choose the structure. Based on ownership eligibility, export orientation and whether you want fiscal incentives, decide between a wholly foreign-owned domestic corporation, a joint venture, a branch or a representative office. A representative office cannot generate revenue — it is limited to liaison, market research and quality control and is funded by inward remittance from head office, so it is the wrong vehicle if you intend to sell or invoice.
• Step 3 — size the capital. Apply the US$200,000 / US$100,000 / ordinary-minimum threshold and plan the remittance path and bank certification. If the investor also wants to reside on an SIRV, the US$75,000 must come in through a BOI-accredited bank and be invested within 180 days — the stage-by-stage timing and official fees are in how long an SIRV takes and what it costs.
• Step 4 — register and stay compliant. SEC incorporation, BIR registration, Mayor's Permit, SSS, PhilHealth and Pag-IBIG. After that come annual obligations including the General Information Sheet and audited financial statements — and any change in the shareholding must be reported accurately, because that is where equity-cap breaches surface.

Never use Filipino nominees to sidestep a restriction. The correct path is always: determine whether the industry allows sole ownership, then build the equity and capital lawfully.

See also: How to Get a Card Machine for a Philippine Shop; Office Fit-Out Permits in the Philippines; Where Is It Easiest to Do Business in Southeast Asia.

Next Step: Confirm Whether Your Industry Allows Sole Foreign Ownership

Straight answer: paying once to have the classification settled is an order of magnitude cheaper than restructuring afterwards.

Full foreign ownership is more common in the Philippines than most people assume, but the answer for any given industry depends on the Negative List's precise classification and on the specifics of your business. Rather than guessing at the statutes, let a team familiar with SEC and DTI practice run an industry-and-structure assessment first.

Yixing is a Makati-based firm helping Chinese and foreign companies establish a compliant presence in the Philippines. If you want to know whether your industry allows a wholly foreign-owned company, which structure fits and how much capital you need, reach out for a free initial assessment. Final arrangements remain subject to SEC, DTI and other agencies' rules and to case-specific professional advice; we make no representation as to any approval outcome.