Foreign ownership in the Philippines is often misunderstood. Many foreigners hear about the famous 60/40 ownership rule and assume that a foreign investor can never own more than 40% of a Philippine company.
That is not correct.
In many industries, a foreigner can legally own 100% of a Philippine corporation. Other industries allow foreign ownership but impose limits such as 25%, 30%, or 40%. A smaller number of activities are reserved entirely for Filipino citizens.
The important question is therefore not simply:
Can a foreigner own a business in the Philippines?
The better question is:
What business will the company engage in, and what foreign ownership limit applies to that particular activity?
The Philippines generally allows foreign investment unless the business activity is restricted by the Constitution, a specific law, or the country’s Foreign Investment Negative List (FINL).
As of 2026, the current list is the 13th Regular Foreign Investment Negative List, issued through Executive Order No. 113 and effective from May 2, 2026.
If you are planning to establish a company, our broader guide on how to register a business in the Philippines explains the general registration process from company formation to local permits.
Foreign Ownership in the Philippines at a Glance
| Business Situation | General Foreign Ownership Rule |
|---|---|
| Business activity not restricted by law or the FINL | Up to 100% foreign ownership |
| Domestic market enterprise meeting applicable foreign-capital requirements | Up to 100% foreign ownership |
| Retail business with at least ₱25 million paid-up capital and other statutory conditions | Up to 100% foreign ownership |
| Retail business below ₱25 million paid-up capital | Up to 40% foreign ownership under the 13th FINL |
| Advertising | Up to 30% foreign ownership |
| Certain public utilities | Generally up to 40% foreign ownership |
| Ownership of private land | Generally up to 40% foreign equity in the land-owning corporation |
| Certain educational institutions | Generally up to 40% foreign ownership, subject to exceptions |
| Private recruitment | Up to 25% foreign ownership |
| Mass media, subject to specific exceptions | No foreign equity |
| Small-scale mining | No foreign equity |
| Many export enterprises outside restricted sectors | Up to 100% foreign ownership |
Important: These are general rules. Certain industries are governed by special laws, licensing requirements, nationality rules, reciprocity provisions, or capitalization requirements.
Table of Contents
Can a Foreigner Own 100% of a Business in the Philippines?
Yes.
The basic rule under the Philippine Foreign Investments Act, as amended by Republic Act No. 11647, is considerably more open than many people assume.
A non-Philippine national may generally invest in a Philippine enterprise up to 100% of its capital unless foreign participation in that particular activity is prohibited or limited by law.
You can read the actual provision in Republic Act No. 11647 through Lawphil.
This means the 60/40 rule is not a general rule applying to every company in the Philippines.
A foreign investor could potentially establish a Philippine corporation that is:
- 100% foreign-owned;
- 90% foreign-owned;
- 60% foreign-owned;
- 40% foreign-owned; or
- any other lawful ownership structure,
depending on the business activity, capital structure, and applicable regulations.
The Securities and Exchange Commission (SEC) itself accommodates domestic corporations with different levels of foreign equity, including corporations with more than 40% up to 100% foreign equity participation, through its registration system.
Foreign investors planning a company can review the SEC eSPARC company registration system.
The 60/40 Rule Is Not Universal
One of the most common misunderstandings about doing business in the Philippines is that:
Filipinos must always own 60% and foreigners can only own 40%.
That is incorrect.
The 60% Filipino / 40% foreign ownership structure applies primarily where the Constitution or a specific law imposes a 40% foreign-equity ceiling.
If your business does not operate in a restricted sector, there may be no need to create a 60/40 corporation.
For example, assume a Korean, American, Japanese, Australian, or European investor wants to establish a consulting or service company in the Philippines.
If the particular activity is not included in the Foreign Investment Negative List and is not otherwise restricted by law, majority or even 100% foreign ownership may be possible, subject to capitalization and other regulatory requirements.
This is why foreign investors should determine their exact business activity first before deciding how many Filipino shareholders they need.
Do not begin with:
“I need a Filipino partner because foreigners can only own 40%.”
Begin with:
“Is this particular business legally restricted?”
What Is the Foreign Investment Negative List?
The Foreign Investment Negative List, or FINL, identifies activities where foreign ownership is prohibited or restricted.
The current version in 2026 is the 13th Regular Foreign Investment Negative List, promulgated through Executive Order No. 113, s. 2026.
It replaced the 12th FINL and took effect on May 2, 2026.
The list is divided broadly into two categories.
List A
List A covers businesses where foreign ownership is restricted because of:
- the Philippine Constitution; or
- specific Philippine laws.
List B
List B covers restrictions based on matters such as:
- national security;
- defense;
- public health;
- public morals; and
- protection of micro and small domestic enterprises.
Foreign investors should check the current FINL before establishing a company because the ownership limit depends primarily on what the company actually does.
The Philippine Board of Investments also provides information about foreign investment rules through its BOI Doing Business resources.
Businesses That Can Generally Be 100% Foreign-Owned
There is no single list of every business that can be 100% foreign-owned.
The system generally works in the opposite direction.
Instead of publishing a list saying, “Foreigners may own these businesses,” Philippine law identifies restricted activities. Businesses outside those restrictions can generally accept full foreign ownership, subject to other applicable laws.
Depending on the exact activities involved, examples may include:
Business Process Outsourcing
BPO companies, call centers, back-office services, and many IT-enabled businesses can generally have substantial or full foreign ownership.
The Philippines has a large BPO industry and this has historically been one of the most accessible sectors for foreign investment.
Information Technology and Software
Software development, web development, technology consulting, and many digital services can generally be fully foreign-owned when they do not fall within another regulated activity.
Management and Business Consulting
Many forms of business consulting can generally accept 100% foreign ownership.
However, be careful when the business crosses into the regulated practice of a profession, such as certain legal, engineering, accounting, architectural, or other professional services.
Manufacturing
Many manufacturing businesses can be 100% foreign-owned, although certain products and industries are specifically regulated.
The exact product being manufactured matters.
Export Businesses
Export enterprises generally receive more liberal treatment.
Under the Foreign Investments Act, foreign investment in an export enterprise whose products or services are not included in the restricted lists may generally reach 100% foreign ownership.
An export enterprise must also comply with the applicable export requirements.
Restaurants and Food Businesses
A restaurant is not automatically subject to a 40% foreign ownership ceiling merely because it serves customers in the Philippines.
However, the legal structure depends on the nature of the operation, its capital, whether retail activities are involved, the company’s exact corporate purpose, and other requirements.
We will cover this separately in our upcoming Can a Foreigner Open a Restaurant in the Philippines? guide because restaurant ownership is often confused with retail ownership.
Tourism-Related Services
Many tourism-related activities can accept significant foreign investment, but specific activities may require Department of Tourism accreditation or be governed by separate regulations.
Online and Digital Businesses
Many online businesses can generally be foreign-owned, provided the underlying activity itself is not restricted.
The fact that a business operates online does not automatically exempt it from Philippine investment, consumer, taxation, retail, or licensing rules.
Before deciding what type of company to establish, read our practical guide for foreigners planning a business in the Philippines.
Capitalization Can Change the Foreign Ownership Rule
Foreign ownership and capitalization are closely connected in the Philippines.
This is where many investors become confused.
A business activity might technically be open to foreign investment, but a minimum level of paid-in equity capital may be required before foreigners can own more than 40% of the enterprise.
The US$200,000 Rule
Under the Foreign Investments Act, certain micro and small domestic market enterprises with paid-in equity capital below the equivalent of US$200,000 are subject to foreign ownership restrictions.
In practical terms, a foreign investor seeking more than 40% ownership in many ordinary domestic-market businesses may therefore need to meet the applicable US$200,000 paid-in equity threshold.
This is not the same as saying:
“Every foreign-owned company needs US$200,000.”
It does not apply universally.
The answer depends on factors including:
- whether the enterprise serves the domestic market;
- whether it qualifies as an export enterprise;
- whether it falls under a special law;
- whether it qualifies for one of the lower-capital exceptions; and
- whether the foreign investor will own more than 40%.
This deserves its own detailed guide, so PhilifeGuide will separately cover How Much Capital Does a Foreigner Need to Start a Business in the Philippines?
When Can the US$200,000 Requirement Be Reduced to US$100,000?
Republic Act No. 11647 provides certain situations where the threshold may be reduced to US$100,000.
A qualifying domestic market enterprise may potentially use the lower threshold if it:
- involves advanced technology as determined by the Department of Science and Technology;
- is endorsed as a startup or startup enabler under the Innovative Startup Act; or
- has a majority of Filipino direct employees, provided there are at least 15 Filipino employees.
These requirements should be examined carefully before relying on the lower capitalization threshold.
The relevant provisions can be reviewed directly in Republic Act No. 11647.
Retail Businesses Have a Different Capital Rule
Retail is particularly important because it operates under its own law.
The Retail Trade Liberalization Act, as amended by Republic Act No. 11595, established a ₱25 million minimum paid-up capital requirement for qualifying foreign retailers.
You can read Republic Act No. 11595 through Lawphil.
A qualifying foreign retailer with the required capitalization may operate with foreign ownership subject to the conditions of the law.
Among the principal requirements are:
- at least ₱25 million paid-up capital;
- the foreign retailer’s country of origin must not prohibit Filipino retailers from entering its retail market; and
- where the retailer operates more than one physical store, the minimum investment per store is generally ₱10 million, subject to the statutory rules and exceptions.
Important 2026 Change for Retail Businesses Below ₱25 Million
The 13th Foreign Investment Negative List introduced an important clarification.
A retail enterprise with paid-up capital below ₱25 million may now have up to 40% foreign equity.
This means a smaller retail company does not necessarily have to be 100% Filipino-owned.
Consider two simplified examples.
Example 1: ₱15 Million Retail Company
A Filipino investor provides ₱9 million.
A foreign investor provides ₱6 million.
Ownership:
- Filipino: 60%
- Foreign: 40%
The capitalization is below ₱25 million, but the foreign participation remains within the 40% ceiling provided under the current FINL.
Example 2: ₱25 Million Qualifying Foreign Retailer
Suppose a foreign investor provides ₱15 million and a Filipino investor provides ₱10 million.
Ownership:
- Foreign: 60%
- Filipino: 40%
Once the company satisfies the Retail Trade Liberalization Act’s capitalization and other qualifications, majority foreign ownership may be possible.
This illustrates an important principle:
The amount of capital can change the legally permitted ownership structure.
Businesses Where Foreign Ownership Is Limited to 40%
Several economically significant activities continue to have a foreign-equity ceiling of generally 40%, although special exceptions may exist.
Examples include certain activities involving:
Private Land
Foreign individuals generally cannot directly own private land in the Philippines.
However, a Philippine corporation may own private land if it satisfies the constitutional nationality requirement—generally at least 60% Filipino ownership.
Therefore, a foreign investor may generally own up to 40% of a qualifying land-owning corporation.
This should not be confused with condominium ownership, which operates under a different legal framework.
Certain Public Utilities
The Philippines significantly liberalized the public-service sector through Republic Act No. 11659, which amended the Public Service Act.
The law narrowed the definition of public utility.
Activities classified as public utilities continue to be subject to constitutional foreign-ownership restrictions, while several businesses previously treated broadly as public utilities may now have greater foreign-investment possibilities.
The law identifies public utilities to include specified activities such as electricity distribution and transmission, petroleum and petroleum products pipeline transmission systems, water pipeline distribution systems and wastewater pipeline systems, seaports, and public utility vehicles.
You can review the amended law in Republic Act No. 11659 on Lawphil.
Telecommunications and several other public services have undergone substantial liberalization, although national-security and reciprocity provisions may still apply.
Natural Resources
Foreign participation in the exploration, development, and utilization of natural resources remains constitutionally restricted, subject to specific arrangements and exceptions provided by law.
Certain Educational Institutions
Foreign ownership of educational institutions is generally limited, although exceptions exist for schools established by religious groups and mission boards, foreign diplomatic personnel and their dependents, and certain short-term high-level skills training activities outside the formal education system.
Condominium Corporations
Foreign ownership is possible in Philippine condominium projects, but applicable nationality restrictions must still be observed at the condominium corporation level.
Businesses With Lower Foreign Ownership Limits
Not every restricted activity uses the 40% ceiling.
Some have lower limits.
Advertising — Up to 30% Foreign Ownership
The Philippine Constitution limits foreign participation in the advertising industry.
Foreign investors may generally own up to 30% of the capital of an advertising company.
Private Recruitment — Up to 25% Foreign Ownership
Private recruitment activities for local or overseas employment are subject to stricter nationality limitations.
Foreign ownership is generally limited to 25%.
Because recruitment agencies also operate under specific Department of Migrant Workers and Department of Labor and Employment rules, investors should review licensing requirements separately.
Businesses Generally Closed to Foreign Ownership
Some activities remain reserved to Filipinos.
Examples include certain forms of:
Mass Media
Mass media is generally reserved to Philippine citizens or entities meeting full Philippine-nationality requirements, subject to specific exceptions such as recording and other legally recognized exclusions.
It is important to distinguish mass media from every type of internet or online business. The exact nature of the activity matters.
Small-Scale Mining
Small-scale mining is reserved to Philippine nationals.
Cooperatives
Participation in Philippine cooperatives is subject to nationality restrictions under cooperative laws, although special provisions may apply to former natural-born Filipino citizens.
Private Security Agencies
The organization and operation of private detective, watchman, and security guard agencies remain subject to Filipino ownership requirements.
Certain Marine and Natural Resource Activities
Certain utilization of marine resources and other natural resources is reserved or restricted under the Constitution and specific laws.
These examples are not a substitute for reviewing the current Foreign Investment Negative List and the special law governing the proposed business.
Foreign Ownership Does Not Mean Foreign Land Ownership
This distinction is extremely important.
A foreigner may legally own 100% of a company and still be prohibited from owning the land where the business operates.
For example, a foreign-owned company operating a service business might legally lease:
- an office;
- commercial space;
- a warehouse;
- a restaurant location; or
- another business property.
But being able to own the operating company does not automatically give the foreign shareholder the right to own Philippine land.
The company structure and the landholding structure must therefore be analyzed separately.
Can a Foreigner Partner With a Filipino?
Yes.
Foreign and Filipino investors frequently establish joint ventures.
There is nothing inherently wrong with structures such as:
- 90% foreign / 10% Filipino;
- 60% foreign / 40% Filipino;
- 50% foreign / 50% Filipino;
- 40% foreign / 60% Filipino; or
- 20% foreign / 80% Filipino,
provided the ownership arrangement complies with the law governing the company’s activity.
A Filipino partner should not be added merely to satisfy a perceived ownership rule without understanding the legal consequences.
Ownership determines important rights involving:
- voting;
- dividends;
- control;
- board representation;
- sale of shares;
- additional capital contributions; and
- distribution of assets.
For someone approaching business as part of retirement, our article on how to choose the right retirement business in the Philippines discusses why ownership structure should be considered together with capital risk and management responsibility.
Be Careful With Nominee Arrangements
Foreign investors sometimes hear advice such as:
“Just put 60% in your Filipino friend’s name, but you will really own everything.”
That can create serious legal problems.
Where Philippine law requires Filipino ownership, the Filipino shareholder must be a genuine owner. Arrangements designed to evade nationality restrictions can potentially violate Philippine law, including the Anti-Dummy Law.
The practical lesson is simple:
Do not use a Filipino shareholder merely as a name on paper to conceal beneficial foreign ownership.
If the law permits 100% foreign ownership, establish the company accordingly.
If the law permits only 40% foreign ownership, structure the investment within that limit.
Trying to disguise the real ownership is not a substitute for proper business structuring.
Can a 60% Foreign-Owned Company Register With the SEC?
Yes.
A company does not have to be 60% Filipino-owned before the SEC can register it.
The SEC registration system expressly recognizes companies with different levels of foreign ownership, including companies with more than 40% foreign equity.
A company that is:
60% foreign-owned and 40% Filipino-owned
can therefore be registered with the SEC if the business activity legally permits that level of foreign ownership and the applicable capitalization and registration requirements are satisfied.
This distinction is important:
SEC registration and legal eligibility to conduct a particular business activity are related but separate questions.
A corporation can exist legally, but the activities stated in its purpose and actually conducted must still comply with nationality and licensing restrictions.
Our business registration guide for the Philippines explains how SEC registration fits into the broader process of establishing the company.
Example: Foreign Investor With ₱10 Million and Filipino Partner With ₱5 Million
Suppose a foreign investor contributes:
₱10 million
and a Filipino investor contributes:
₱5 million.
Total equity:
₱15 million
The economic ownership based purely on those contributions would be approximately:
- Foreign investor: 66.67%
- Filipino investor: 33.33%
Can the company be registered?
Potentially yes.
But the more important question is:
What business will the company conduct?
If the activity permits majority foreign ownership and the applicable capitalization requirements are satisfied, the ownership ratio may be legal.
If the activity has a 40% foreign ownership limit, the same ownership structure would not comply.
If it is a retail business below ₱25 million paid-up capital, for example, the current FINL generally limits foreign participation to 40%.
The investment amount alone therefore does not determine the answer.
Business activity + ownership percentage + capitalization + special licensing requirements must be considered together.
Example: Foreign Investor With ₱15 Million and Filipino Partner With ₱10 Million
Now assume:
Foreign investment: ₱15 million
Filipino investment: ₱10 million
Total paid-up capital: ₱25 million
Ownership based on those contributions:
- Foreign: 60%
- Filipino: 40%
For an ordinary unrestricted business, the structure may be possible subject to the applicable capitalization and registration rules.
For a qualifying retail enterprise, reaching the ₱25 million statutory paid-up capital threshold becomes particularly significant because the Retail Trade Liberalization Act permits qualifying foreign retailers to enter the market subject to its requirements.
This is why the same ₱25 million company may have very different ownership possibilities from a ₱15 million company engaged in the same retail activity.
Foreign Ownership and Business Registration Are Different Questions
Foreign investors sometimes combine several legal questions into one.
They should be separated.
Question 1: Can the foreigner own the business?
Check the Constitution, the Foreign Investments Act, the current Foreign Investment Negative List, and any special industry law.
Question 2: How much can the foreigner own?
Determine whether the allowable foreign equity is:
- 100%;
- 40%;
- 30%;
- 25%; or
- zero.
Question 3: Is there a minimum capitalization requirement?
Check whether the US$200,000, US$100,000, ₱25 million retail rule, or another industry-specific threshold applies.
Question 4: What business structure should be used?
Possible structures may include a corporation, partnership, branch office, representative office, or—in limited situations—another legal form.
Question 5: What registrations and permits are required?
After establishing the legal structure, businesses may still need registrations or permits from:
- Securities and Exchange Commission;
- Bureau of Internal Revenue;
- barangay;
- city or municipal government;
- SSS;
- PhilHealth;
- Pag-IBIG;
- Department of Labor and Employment; and
- industry-specific government agencies.
Our complete guide to registering a business in the Philippines covers the general sequence.
A Practical Way to Evaluate Foreign Ownership
Before investing money, work through these questions in order.
Step 1: Define the exact business
Do not simply say:
“I want to open a company.”
Identify exactly what the company will sell or what services it will provide.
Step 2: Determine whether it serves the domestic or export market
This can significantly affect foreign investment rules and capitalization.
Step 3: Check the 13th Foreign Investment Negative List
Determine whether the activity is:
- unrestricted;
- partially restricted; or
- reserved to Filipinos.
Step 4: Check special laws
Retail, banking, education, telecommunications, recruitment, mining, land ownership, media, and other regulated industries have additional rules.
Step 5: Calculate the capitalization
Determine whether minimum capital requirements affect the proposed foreign ownership percentage.
Step 6: Decide the ownership structure
Only after completing the first five steps should you determine whether the company should be:
- wholly foreign-owned;
- majority foreign-owned;
- 50/50;
- 40% foreign-owned; or
- primarily Filipino-owned.
Step 7: Register the business
Once the ownership structure is legally appropriate, begin the SEC and other government registrations.
Foreign Ownership Is More Open Than Many Investors Think
The Philippines still maintains foreign ownership restrictions in strategically sensitive and constitutionally protected sectors.
However, it is incorrect to assume that foreigners are limited to 40% ownership in every Philippine business.
Many activities can legally accommodate majority or 100% foreign ownership.
The real challenge is determining:
- what activity the company will conduct;
- whether that activity appears in the current Foreign Investment Negative List;
- whether a special law applies;
- how much paid-in capital is required; and
- whether additional licenses or regulatory approvals are necessary.
Once those questions are answered, the appropriate ownership structure becomes much clearer.
For retirees and expatriates who are still deciding what type of business may suit their situation, see our guide to the 10 best businesses retirees can start in the Philippines.
Final Thoughts
Foreign ownership in the Philippines is not governed by a simple universal 60/40 rule.
Some businesses allow 100% foreign ownership. Others impose foreign-equity limits of 40%, 30%, or 25%, while certain activities remain reserved entirely to Philippine nationals.
Capitalization can also change the answer.
A foreign investor considering a ₱5 million company, a ₱15 million joint venture, or a ₱25 million retail company may face very different legal options.
The safest approach is therefore to determine the business activity first, foreign ownership limit second, capitalization requirement third, and company structure fourth.
Do not create the ownership structure first and try to make the business fit it afterward.
For the overall establishment process, continue with our How to Register a Business in the Philippines: A Practical Guide for 2026.
Official References
For readers who want to verify the underlying rules, the following official and primary sources are useful:
- Republic Act No. 11647 – Amendments to the Foreign Investments Act
- Republic Act No. 11595 – Retail Trade Liberalization Act amendments
- Republic Act No. 11659 – Amendments to the Public Service Act
- SEC eSPARC – Company Registration System
- Philippine Board of Investments – Doing Business in the Philippines
- Lawphil Executive Orders Index – including Executive Order No. 113, s. 2026
Last update: 18 August 2026
Disclaimer: This article provides general information about foreign ownership rules in the Philippines and is not legal, tax, or investment advice. Foreign investment regulations can depend on the exact business activity, ownership structure, nationality of investors, capitalization, and applicable special laws. Investors making substantial commitments should verify the current rules with the appropriate Philippine government agency or qualified professional.
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