Can a Foreigner Be a Director or Majority Owner of a Philippine Corporation?

Updated for the framework in force through 2024. This is general information, not legal advice.

Short answer

Yes, a foreigner may be a director and may even be the majority owner of a Philippine corporation if the business is not in a “nationalized” or restricted activity.
Where the law caps foreign equity (e.g., certain landholding, public utilities, mass media, and other partially nationalized sectors), foreign ownership and board seats must observe the cap and the Anti-Dummy Law rules on control.
Independent of equity caps, some officer roles and professional practice corporations have citizenship and/or residency requirements.

The legal building blocks

1987 Constitution Establishes sectors reserved to Filipino citizens or to corporations at least 60% Filipino-owned (often called “Philippine nationals”). Key constitutional reservations include mass media (100% Filipino), land (ownership only by Filipino citizens/corporations 60% Filipino), and utilization of natural resources (via service contracts with Filipino control).
Foreign Investments Act (FIA) (as amended) Baseline rule: activities not in the Foreign Investment Negative List (FINL) may be 100% foreign-owned. The FINL enumerates activities with equity ceilings or reserved to Filipinos.
Special sectoral laws Examples include the Public Service / Public Utility framework, Retail Trade Liberalization, Education and Advertising laws, Professional Regulation statutes, Mining, Real Estate/Condominium, Banking/Insurance, etc. These can either permit 100% foreign equity (subject to conditions) or impose caps.
Revised Corporation Code (RCC) Governs incorporation, board composition, officers, and compliance. It generally permits foreigners to be directors and officers unless a specific law, the FINL, or the Anti-Dummy Law (ADL) says otherwise.
Anti-Dummy Law (ADL) Penalizes arrangements that evade nationality caps and regulates management participation where activities are partly or wholly reserved to Filipinos. In partially nationalized activities, board seats and control must align with allowed foreign equity and actual control must remain with Filipinos.

Director eligibility: who can sit on the board?

Shareholding requirement. Directors must own at least one qualifying share (or meet the governance rules for independent directors in covered companies). There is no blanket citizenship ban on directors under the RCC.
Where an activity has a nationality cap:
- Board composition must reflect the permitted foreign equity and cannot cede control to foreigners (ADL principle).
- In many regulated sectors, regulators expect a Filipino-majority board when the law requires Filipino control.
Corporate officers.
- Corporate Secretary must be a Filipino citizen (and typically resident).
- Treasurer must usually be a resident (citizenship not always required).
- President must be a director (thus subject to the same nationality/sector rules). Sector-specific charters or listing rules can impose stricter officer nationality/residency.

Majority ownership: when can foreigners own over 50% (even 100%)?

Freely open (no equity cap, generally up to 100%)

Typical examples:

Most manufacturing, export enterprises, BPO/IT-BPM, software/SaaS, R&D, business services not listed in the FINL.
Retail may now be 100% foreign subject to minimum paid-up capital and other conditions under the Retail Trade Liberalization Act (as amended).
Many public services (not classified as “public utilities”) may allow high or full foreign equity, subject to foreign participation safeguards, reciprocity, and national security screens in sensitive infrastructure.

Capped or reserved (examples, not exhaustive)

Mass media: 0% foreign (except recording/advertising nuances; see below).
Advertising: typically up to 30% foreign, i.e., 70% Filipino.
Private land ownership: corporations must be at least 60% Filipino to own land. Foreigners can lease land (e.g., up to 50 years, renewable) and can own condominium units so long as foreign ownership of the condominium corporation/project does not exceed 40%.
Public utilities (narrowly defined): commonly up to 40% foreign (Filipino-controlled).
Education: generally at least 60% Filipino, with nuances for higher education and foreign HEI branch campuses under special laws/regulations.
Exploitation of natural resources: Filipino control; foreign participation only through service/financial/technical assistance arrangements.
Professions / Professional corporations: ownership, directors, and practice usually limited to Filipino-licensed professionals (with rare reciprocity-based exceptions).

Always verify the current FINL and any sector-specific law or license conditions for your exact activity.

Board control & the Anti-Dummy Law (ADL)

When the law requires Filipino ownership/control:

Foreign board seats should not exceed what’s compatible with the equity cap and must not transfer control to foreigners via voting agreements, side letters, or “dummies.”
Management participation by foreigners can be restricted; technical or specialized roles are typically allowed (often with permits/visas).
Penalties for violations include fines, imprisonment, and corporate sanctions.

Practical take: In a 60-40 Filipino-foreign company operating in a restricted sector, maintain Filipino majority of directors, ensure Filipino control of key committees, and avoid arrangements granting de facto foreign control.

Visas, work authority, and residency notes

A foreign director who works (management/operational role) in the Philippines usually needs an Alien Employment Permit (AEP) from DOLE and the appropriate visa (e.g., 9(g) pre-arranged employment, or special investor visas like SIRV, SRRV, or 47(a)(2) where applicable).
A non-resident, non-executive director attending occasional board meetings may be treated differently for AEP purposes; check the current DOLE exemptions and immigration rules tied to compensation, frequency, and role.

Incorporation pathways for foreigners

Stock corporation (domestic subsidiary). Foreign nationals can be incorporators and shareholders up to the sectoral limit (or 100% if open).
- One Person Corporation (OPC): A single foreign natural person may form an OPC if the activity is open to foreign participation.
- Minimum capital: Only if required by sectoral law or when negotiating visas (or under retail rules).
Branch/Representative office of a foreign corporation.
- Branch may engage in revenue-generating activities but cannot own land. Capital inward remittance thresholds apply.
- Rep office is non-revenue, funded by the head office.
Special economic zones / investment promotion agencies (e.g., PEZA, BOI).
- Export enterprises (meeting export thresholds) may qualify for 100% foreign ownership plus incentives.

Officers & governance checkpoints

Corporate Secretary: must be Filipino (and usually resident).
Treasurer: must be resident; citizenship depends on regulator/SEC practice.
President/CEO: may be foreign if the sector permits foreign directors and control.
Independent directors (for public/covered companies): nationality rules may be set by securities/central bank/insurance regulators.

Maintain:

Fit-and-proper policies,
Beneficial ownership disclosures,
Foreign equity monitoring (especially in condo corps and partly nationalized sectors),
ADL compliance files (substantive control with Filipinos where required).

Real estate & condominiums (quick map)

Land ownership: only by Filipino citizens or corporations ≥60% Filipino.
Condominiums: foreigners may own units if the project’s foreign equity ≤40% (count both condo corp shares and actual units).
Land leasing: foreigners (or foreign-owned firms) may lease up to 50 years, renewable for 25 (Investors’ Lease Act), subject to land use and LGU zoning.

Banking, insurance, and other regulated industries

Often open to high foreign ownership subject to: reciprocity, fit-and-proper, capital, and prudential rules, plus approvals from BSP/IC/SEC and sometimes NEDA/DOF.
Expect foreign director/officer requirements around experience, residency, and regulatory clearance.

Professional practice entities

Law, medicine, engineering, accountancy, architecture, etc.: practice and ownership generally restricted to Filipino citizens duly licensed by the PRC (and the Supreme Court for law). Foreign participation is typically limited to reciprocity-based licensing; professional corporations/partnerships must be 100% Filipino-owned and controlled unless a specific law or treaty says otherwise.

Tax residency & control

A corporation incorporated in the Philippines is a domestic corporation for tax purposes regardless of foreign majority ownership, taxed on worldwide income (subject to tax treaties and incentives).
Branches are resident foreign corporations, taxed on Philippine-sourced income.

Compliance checklist (practical)

Identify the exact activity and check the current FINL and sectoral law.
Structure equity to fit caps (if any), and align board/control with the ADL.
Choose the vehicle: domestic subsidiary, OPC, branch, or rep office.
Officers: appoint a Filipino Corporate Secretary and a resident Treasurer; verify any sector-specific officer rules.
Foreign directors/officers: secure AEP/visas where needed; document role limits in nationalized activities.
Beneficial ownership filings and ultimate parent disclosures.
Industry approvals (BSP/IC/DOE/DICT/CHED/DepEd/etc., as applicable).
Land/real estate: use lease or 60%-Filipino land-holding structure; track condo 40% cap.
Substance & control: minutes, voting agreements, and committees must reflect lawful Filipino control where required.
Renewals & audits: monitor equity drift (e.g., share transfers) and foreign participation ceilings annually.

Illustrative scenarios

100% foreign SaaS startup (no FINL hit): Allowed. Foreign majority owners can occupy board and officer posts (except Corporate Secretary must be Filipino). Obtain AEP/visa only for foreigners working in PH.
Retail chain: 100% foreign possible with statutory paid-up capital and operational thresholds; board may be foreign-majority; comply with DTI registration and retail-specific rules.
Condominium investment company: Can be 100% foreign-owned if it does not own land and project foreign equity ≤40%; otherwise use leases.
Electric distribution utility: Typically up to 40% foreign; board/control must remain Filipino; ADL compliance is critical.
Architectural firm: Practice restricted; professional corporation/partnership must be Filipino-owned/controlled unless a specific reciprocity regime applies.

Frequently asked questions

1) Can a foreigner be the chairman or president? Yes—if the sector is open. In restricted sectors, ensure Filipino control (often via a Filipino-majority board and key committee control).

2) Can a foreigner be the Corporate Secretary? No—the Corporate Secretary must be a Filipino citizen (and typically resident).

3) Do foreign directors need work authorization? If they perform work in the Philippines (management/executive functions or compensated regular activity), they generally need an AEP and the appropriate visa. Occasional, non-executive board service by non-residents may be treated differently—confirm current DOLE rules.

4) Can a foreigner own land through a corporation? Only if the corporation is at least 60% Filipino-owned. Otherwise, use long-term leases; condos are subject to the 40% project cap.

5) If my activity is 60-40, can I give foreigners veto rights or supermajority protections? Protective rights are common, but avoid de facto foreign control that violates the ADL. Draft rights carefully (e.g., limited vetoes; Filipino-controlled day-to-day management).

Takeaways

Outside restricted sectors, foreigners may own up to 100% and serve as directors and officers (save for the Corporate Secretary and any sector-specific limits).
In restricted sectors, comply with equity caps, board/management control rules, and the ADL.
Always map your exact activity to the current FINL and sectoral law, align governance accordingly, and secure work/immigration authority where needed.

Need help mapping your specific business model to the right ownership and board structure? Share the exact activity and we’ll sketch a compliant structure and checklist tailored to it.