A Philippine legal article on what is allowed, what is prohibited, how structures work in practice, and where people get into trouble.

1) The constitutional starting point: land is (mostly) for Filipinos

Philippine law treats land ownership as a core sovereignty issue. The controlling rule is constitutional:

A. General rule

Foreign individuals cannot own land in the Philippines. They may own certain immovable property interests short of ownership (like long-term leases), and they may own condominium units within limits (explained below), but not land title in their own name.

B. Corporate route is not a “loophole”—it’s a nationality test

A domestic corporation (incorporated in the Philippines) may own land only if it is “Philippine national” for constitutional purposes—meaning it is at least 60% Filipino-owned (and that “Filipino-owned” must be real, not cosmetic).

If a corporation is 40% or more foreign-owned, it is generally treated as not eligible to own land (subject to narrow, highly specific contexts that usually do not result in true “foreign land ownership” anyway).

2) What counts as a “domestic corporation” and what counts as “Filipino-owned”

A. Domestic vs. foreign corporation

Domestic corporation: organized under Philippine law; registered with the SEC (Revised Corporation Code framework).
Foreign corporation: organized under foreign law; even if licensed to do business in the Philippines, it does not become a domestic corporation.

Key point: being “domestic” is not enough. The corporation must also satisfy the constitutional nationality requirement for landholding.

B. The 60/40 rule (and why it’s more than math)

To own land, the corporation must be a Philippine national:

At least 60% of its capital must be owned by Filipino citizens (or by other Philippine nationals), and
The Filipino ownership must confer real control in substance—not merely on paper.

In practice, regulators and courts look at:

Voting control (who controls shareholder decisions)
Board control (who controls corporate policy)
Layered ownership (who ultimately owns the Filipino corporate shareholders)
Beneficial ownership (who truly enjoys the benefits/risks of ownership)

3) How the nationality test is applied: control test and “grandfather rule”

A. The “control test” (first filter)

A corporation is generally considered Philippine national if Filipino citizens own at least 60% of the outstanding capital stock entitled to vote (or the equivalent for non-stock corporations).

B. The “grandfather rule” (look-through, when needed)

If ownership is layered (e.g., Corp A owns shares of Corp B), regulators may “look through” the corporate chain to see whether the required Filipino ownership is genuinely Filipino all the way down.

This becomes critical when:

The “Filipino” shareholder is itself a corporation with foreign participation
There are multiple tiers of corporate shareholders
There are arrangements suggesting foreigners retain control despite nominal Filipino majority

Bottom line: If the Filipino 60% is achieved using Filipino “fronts,” or corporations that are Filipino in name but foreign-controlled in substance, the structure is exposed.

4) Land a corporation can own: private land vs. public land, and key limits

A. Private land

A qualified Philippine national corporation may acquire and hold private lands, subject to:

Local land use/zoning
Agrarian reform restrictions (for agricultural lands)
Special restrictions on certain strategic areas (e.g., certain zones, reservations, special laws)

There is no single universal “hectare cap” for private land the way there is for public land, but other regimes (agrarian, competition, sectoral regulation) can effectively limit accumulation.

B. Public land (land of the public domain)

For disposable public agricultural lands, corporations (even Philippine nationals) face stricter limits under the Public Land Act framework:

Corporations may lease large areas, but ownership/acquisition is heavily constrained.
Historically, corporate acquisition of public agricultural lands has been capped (classically cited maximums exist in statute), and compliance depends on land classification and mode of disposition.

Practical note: Many transactions marketed as “public land purchases” are actually private land dealings (after land becomes private through patent/registration), but due diligence must confirm classification and title history.

5) The common “foreign buyer through a domestic corporation” structures—what works and what fails

A. The lawful core structure (when the corporation truly qualifies)

The corporation:

is Philippine-incorporated,
is ≥60% Filipino-owned, and
is not subject to arrangements that make foreigners the real controllers, and then it buys land in the corporation’s name.

Foreign participant’s position: ownership is limited to up to 40% of the corporation (and only within what the nationality rules truly recognize as foreign).

This is not “foreign land ownership.” The land is owned by a Philippine national corporation; the foreigner holds a minority equity interest.

B. The risky “nominee” structure (common—and legally dangerous)

A foreigner funds the purchase but places title in:

a corporation where Filipinos appear to own 60% on paper, but
the Filipinos are mere placeholders,
and side agreements give the foreigner control or guaranteed return.

This is where the Anti-Dummy Law, constitutional policy, and civil law doctrines collide:

The land acquisition may be challenged as unconstitutional/illegal.
Side agreements can be void, unenforceable, or criminally risky.
Remedies can be ugly: loss of property, forfeiture, reconveyance claims, tax exposure, and potential criminal liability.

C. The “control without ownership” temptation

Foreigners sometimes try to keep within 40% equity but secure control using:

voting trusts,
special voting preferred shares,
veto rights that effectively transfer control,
management contracts that surrender policy control,
loan covenants that give takeover-like control upon minor defaults,
options/side letters that guarantee transfer of Filipino shares to the foreigner later.

These devices can trigger legal problems if they effectively circumvent constitutional limits or violate anti-dummy rules.

6) The Anti-Dummy Law: the major tripwire

The Anti-Dummy Law is the main statute used to police arrangements that simulate Filipino ownership or allow foreigners to intervene in management/control beyond what is permitted in partly nationalized activities.

A. What it targets

Using Filipino citizens as dummies to evade nationality restrictions
Allowing foreigners to manage, operate, or control a nationalized activity beyond allowable participation

B. Why landholding is sensitive

Because land ownership is constitutionally restricted, attempts to “buy land through a corporation” that is Filipino on paper but foreign-controlled can be framed as:

an evasion of constitutional restrictions, and/or
a dummy arrangement.

C. Practical compliance takeaway

Even if the foreigner stays at 40% equity, the structure can still be attacked if:

foreigners effectively dictate corporate decisions (especially regarding land disposition),
Filipinos have no real economic stake,
the foreigner is guaranteed beneficial ownership, or
the arrangement shows that Filipino ownership is a façade.

7) Valid alternatives for foreigners who want long-term control or use of land (without owning it)

If the real goal is use, control, or investment return, not a land title, Philippine law provides safer routes:

A. Long-term lease

Foreigners (individuals or foreign-owned entities) can typically lease private land long-term (commercial practice commonly targets long durations, with renewals, subject to statutory limits and proper drafting). A lease can be paired with:

building ownership (a foreigner may own a building/improvement separate from land, depending on structure and registration),
usufruct or similar civil law rights,
right of first refusal (carefully structured),
mortgage or security arrangements (within banking/property rules).

B. Condominium ownership (not land, but a unit)

Foreigners may acquire condominium units, typically subject to:

a cap where foreign ownership in the condominium project must not exceed a defined percentage (commonly 40%),
compliance with the Condominium Act and the master deed/declaration restrictions.

This is often the cleanest ownership-like option for residential purposes.

C. Former natural-born Filipino citizens

Former natural-born Filipinos (now foreign citizens) may be allowed to acquire private land subject to statutory limitations (area caps and purpose restrictions are common), and subject to proof of former natural-born status and compliance with implementing rules.

D. Succession (inheritance) contexts

Foreigners can sometimes acquire land via hereditary succession in narrowly defined ways, but relying on inheritance planning as an “acquisition strategy” is legally and practically fragile.

8) What “buying land through a domestic corporation” really means for the foreigner

Even when done correctly, it has consequences that many buyers underestimate:

A. You do not own the land—your corporation does

Your asset is shares, not the land title.

If relationships sour with Filipino majority shareholders, your “land investment” becomes a governance dispute.
If corporate records, board composition, or share transfers are mishandled, you can lose practical control fast.

B. Exit is corporate, not real estate

You typically exit by:

selling shares, or
causing the corporation to sell land (which requires proper corporate approvals and tax handling).

Either path can be blocked by corporate politics, deadlocks, or minority protections.

C. You inherit Philippine corporate compliance burdens

You must treat the corporation as real:

SEC reporting
taxation and accounting
permits and local compliance
maintaining nationality compliance over time (including indirect ownership changes)

A “single-asset landholding corporation” is still a corporation.

9) Due diligence checklist: what must be verified before the corporation buys land

A. Corporate nationality and control

Updated General Information Sheet (GIS) and ownership schedules
Ultimate beneficial owners (especially for corporate shareholders)
Voting rights analysis (not just economic rights)
Board composition and control mechanics
Review of shareholder agreements, voting trusts, side letters

B. Title and land status

Authenticity of the TCT/OCT
Chain of title, liens/encumbrances, adverse claims
Land classification (private vs. public; agricultural vs. non-agricultural)
Zoning and land use
Agrarian reform coverage, CARP issues, DAR clearances where relevant

C. Transaction structure and taxes

Correct deed of sale/transfer documentation
Documentary stamp tax, capital gains/withholding regimes (depending on party)
Local transfer taxes
Registration and annotation requirements
Source-of-funds documentation (also relevant to banking/AML practicalities)

10) Red flags that can get the deal challenged

If any of these appear, the risk profile spikes:

Filipino shareholders have no real funds and no real risk (pure “name lending”)
Side agreements guarantee the foreigner will eventually own >40%
Irrevocable options to transfer Filipino shares to foreigner upon demand
Voting arrangements that hand foreigners decisive control despite minority status
Foreign “consulting/management” contracts that effectively run the landholding company
Loans structured so the foreigner can seize control easily (or foreclose into ownership)
Dummy directors/officers who cannot explain the business or their role
Payments routed in ways inconsistent with declared ownership economics

11) What happens if the structure is illegal

Consequences can arise on several fronts:

A. Civil consequences

Contracts intended to circumvent constitutional limits may be void or unenforceable
Share/land arrangements may be attacked through actions for reconveyance, annulment, or declaration of nullity
Courts can refuse to aid a party seeking to enforce an illegal scheme (especially if the party knowingly participated)

B. Criminal/regulatory consequences

Anti-dummy exposure (for both the foreign participant and Filipino dummy participants)
Immigration and business permit consequences in extreme cases
SEC/other agency actions for misdeclaration or noncompliance

C. Practical consequences (often the most painful)

Loss of leverage: the foreign funder may have paid but cannot legally “take” the land
Governance hostage situations inside the corporation
Frozen transactions: banks and buyers avoid tainted titles/structures

12) Best-practice ways to invest (if you want to stay on the safe side)

If the goal is property-linked investment, common safer approaches include:

Lease-first design (long-term lease with clear renewal, development rights, and improvement ownership planning)
Condominium route (where appropriate, within foreign ownership caps)
Joint venture with a genuinely Filipino-controlled corporation where:
- Filipino 60% is real and funded,
- governance is transparent and compliant,
- foreign return is achieved through lawful instruments (dividends, lease income, service fees at arm’s length, preferred shares that do not transfer forbidden control, etc.)
Project-level contractual control (construction, operations, management) without crossing into prohibited control of a nationalized activity or simulating ownership.

13) Key misconceptions to correct

“If it’s a Philippine corporation, it can own land.” Not unless it qualifies as a Philippine national.
“I can just put 60% in a Filipino friend’s name and protect myself with contracts.” Side agreements meant to defeat constitutional policy can be void and can expose both parties.
“I only need 60% Filipino on paper; control can be foreign.” Control arrangements that effectively hand foreign control can trigger anti-dummy and constitutional problems.
“Owning 40% of the corporation means I own 40% of the land.” You own 40% of the corporation—not a partitioned slice of the titled land.

14) A clean way to think about it

Foreigners cannot buy Philippine land through a domestic corporation unless the corporation is genuinely Filipino (60%+) and remains so in substance and control. When done legally, the foreigner buys a minority equity interest in a landholding Philippine national corporation—not land title. Any attempt to simulate Filipino ownership or to contract around the restriction raises serious enforceability and liability risks.

If you want, describe your intended setup (e.g., residential use, commercial development, farmland, budget range, whether there’s a Filipino partner, and whether you want ownership vs. long-term control), and I’ll map it to the lowest-risk structures and the specific clauses/terms that usually matter most.