OPC Real-Estate Lease & Ownership Requirements in the Philippines

(A comprehensive legal overview under Republic Act No. 11232 and related statutes, updated as of 8 July 2025)

1. What is an OPC?

Element	Key Points
Definition	An One Person Corporation (OPC) is a stock corporation with a single shareholder who may also be the sole director and president. (Sec. 116–132, Revised Corporation Code, “RCC” or RA 11232).
Eligible incorporators	• Natural person (Filipino or foreign, subject to nationality restrictions) • Trust • Estate
Excluded activities	Banking, quasi-banking, pre-need, trust, insurance, public & publicly-listed companies, and those requiring “multiple shareholders” by special law.

2. Constitutional & Statutory Limits on Real-Property Rights

Topic	Philippine Rule	Effect on an OPC
Land ownership	Art. XII, Sec. 7 of the 1987 Constitution: land ownership is reserved to (a) Filipino citizens, or (b) corporations with ≥ 60 % Filipino equity.	• An OPC whose single shareholder is a Filipino may own land. • A foreign-owned OPC (i.e., 0 % Filipino equity) cannot own land but may acquire condominium units (up to 40 % of a condominium project) under RA 4726 (Condominium Act) or lease land (see below).
Long-term land lease by foreigners	Investor’s Lease Act (RA 7652): foreign investor may lease private land up to 25 years, renewable once for 25 more (total 50).	A foreign OPC may enter a long-term lease if its project is “investment-generating” under RA 7652 and endorsed by an Investment Promotion Agency (BOI, PEZA, etc.).
“Patrimony-sensitive” activities (e.g., real-estate development)	Foreign Ownership Ceiling: 40 % under the Philippine Negative List A.	A foreign-owned OPC cannot engage in the business of land development or real-estate trading, but may lease office space, warehouses, or condos for its own use.
Public agricultural lands	Covered by Commonwealth Act 141 (Public Land Act) and in-pari-materia constitutional limits.	Practically barred to foreign-owned OPCs; Filipino OPCs must secure DENR clearance and presidential approval for large estates (> 1,024 ha).

3. Forming an OPC that will own or lease real property

Name Verification & Reservation (SEC CRS).
Articles of Incorporation for OPC – must contain:
- Primary purpose e.g., “to acquire, own, develop, lease and manage real estate …”
- Street address of the principal office.
- Amount of authorized capital stock and indication if real property will be paid in as “non-cash consideration.”
Cover Sheet & Undertaking (one in-lieu-of bylaws).
Treasurer-in-trust (TIT) Statement – same natural person can be single shareholder, president and TIT.
Proof of Property Rights Provided to SEC
- Owned premises – Certified true copy of Transfer Certificate of Title (TCT), tax declaration, latest real-property tax receipt.
- Leased premises – Notarized Lease Contract (if > 1 year, annotated on TCT and registered with Registry of Deeds) and lessor’s ID/business permit.
For Non-Cash Asset Injection (e.g., shareholder transfers land to the OPC):
- Deed of Assignment or Deed of Donation/Sale to the OPC.
- Appraisal Report by a BSP-accredited appraiser.
- SEC Form 10-1 (Sworn valuation by appraiser & shareholder).
- Submission of BIR CAR (Certificate Authorizing Registration) once taxes paid.
Foreign OPC Additional Steps
- Proof of inward remittance of capital.
- Registration with BOI/IPA if it will invoke RA 7652 land lease.
- Authority to Do Business (if the single stockholder is a foreign juridical entity acting through a resident agent).

4. Ongoing SEC & LGU Compliance Involving Real Estate

Compliance Trigger	Documentary Requirement	Remarks
Change of Registered Address / Principal Office	• SEC-form Notification within 15 days. • Proof of ownership or new lease.	Address on the SEC Certificate must always match the real property document.
Renewal or expiration of lease	Board resolution of the single stockholder (written, dated & signed) + new lease for filing.	The Lease Contract must comply with the Civil Code (Arts. 1654-1688) & RA 7652 if foreign.
Real-property acquisition or disposal	• Shareholder’s written consent (functions as “board approval”). • Disclosure in Annual Financial Statements and General Information Sheet (GIS).	Real-estate transactions are material and must be reflected in the notes to FS.
Capital increase via land contribution	• Amended AOI showing increased A/S. • Same non-cash asset valuation package (see §3-6).	Subject to 30-day SEC processing and stock issuance tax (DST).
Real-Property Tax (RPT) & Local Business Tax (LBT)	Proof of annual RPT payment; quarterly LBT (office, warehouse).	Failure to pay may lead to levy and auction by LGU.

5. Taxation of Real-Estate Leases & Conveyances

Tax Type	Rate / Basis	Party Liable	Typical Deadlines
Documentary Stamp Tax (DST) on Lease	₱ 3.00 for the first ₱2,000 annual rent + ₱ 1.00 per additional ₱ 1,000 (Sec. 194, NIRC).	Lessee (OPC).	Within 5 days after the end of the month when lease was signed.
Withholding Tax on Rent	• 5 % if lessor is individual • 10 % if lessor is corporation	Lessee (OPC)	Remit on or before the 10th (eFPS: 15th) of the following month.
VAT on Rent	12 % if annual gross rent of lessor > ₱ 3 M	Lessee pays, lessor remits	Input VAT creditable by VAT-registered OPC.
Capital Gains Tax / Creditable Withholding on property sale to OPC	6 % of higher between zonal value or selling price (CGT on land/house), OR 1.5 % CWT for ordinary asset seller.	OPC (as transferee) must withhold or pay.	File BIR Form 1706 or 1606 within 30 days of notarization.
DST on Deed of Sale / Assignment	1.5 % of consideration or FMV on conveyance of realty to OPC.	Buyer/transferee OPC.	Same 5-day rule.

6. Practical Checklist for an OPC Entering a Lease

Confirm nationality restrictions (if foreign share-owner):
- Lease term ≤ 25 + 25; project registered with IPA if long-term outsider lease.
Draft lease essentials under the Civil Code:
- Names & authority of parties (single stockholder signs for OPC).
- Exact description of premises (attach TCT).
- Term, renewal, rental, escalation, taxes & utilities.
- Repair obligations & sub-leasing prohibition, if any.
Notarize and—if term > 1 year—register with the Registry of Deeds (Sec. 53, Property Registration Decree) and annotate on TCT; pay registration fees & DST.
File stamped lease with the LGU Business Permits & Licensing Office as proof of occupancy for mayor’s permit renewal.
Record in corporate books (shareholder’s written resolution, contract register, lease schedule in accounting).

7. Practical Checklist for an OPC Buying or Accepting Land

Confirm Filipino ownership (single shareholder must be Filipino).
Due diligence: verify TCT, tax declaration, arrears, liens, right-of-way, Annotation of adverse claims.
Valuation & Board Consent (single stockholder’s written consent).
Deed of Absolute Sale / Assignment – notarized.
BIR Processing:
- Secure Certificate Authorizing Registration (CAR) after paying CGT/CWT, DST, and transfer tax.
Transfer TCT into the name of the OPC at the Registry of Deeds; new TCT becomes part of SEC files.
Update Asset Ledger & insure property.

8. Special Situations

Scenario	Key Guidance
Foreign single stockholder wants to run a hotel on leased land	Register the hotel project with BOI (qualified tourism project) → secure a 25 + 25-year investor’s lease → ask SEC for Secondary License if doing securities borrowings.
Estate-origin OPC (a decedent’s estate forms an OPC to hold inherited land)	Allowed; Executor may serve as Nominee per SEC MC No. 7-2023. Title passes from heirs to the OPC via extrajudicial settlement & Deed of Assignment, subject to Estate Tax & CAR.
Trust-origin OPC (minor beneficiary)	Trustee acts as incorporator. If land held, trustee must be Filipino. Upon termination of trust, assets distributed as per trust deed.
Conversion from sole proprietorship engaged in property leasing into OPC	File Application for Conversion; present old DTI Business Name, BIR closures, and assignment of leases. Lessee must obtain Lessor’s written consent to transfer leases to the new OPC.

9. Penalties & Common Pitfalls

Violation	Typical Fine / Consequence
Using foreign-owned OPC to hold land	Void title; land escheats to the State; possible criminal action for anti-dummy circumvention.
Failure to register lease > 1 year	Lease unenforceable against third parties; cannot bind successors-in-interest.
Non-payment of DST or RPT	Surcharge & interest (25 % + 12 % p.a.), distraint of personalty, levy of realty.
Unreported property acquisition/disposition in GIS/FS	SEC penalty ₱ 10,000 – ₱ 100,000 + daily fines; possible revocation.

10. Closing Thoughts

The One Person Corporation framework offers flexibility for solo entrepreneurs and family offices, but real-estate transactions remain tightly regulated by the Constitution, the Civil Code, land and tax laws, and SEC issuances. The two golden questions to ask are:

Is the single shareholder Filipino? If “yes,” ownership of land is possible; if “no,” only leasing (and limited condo ownership) is available.
Is the real-estate activity partially or fully nationalized? If “yes,” a foreign OPC cannot engage directly.

By structuring leases properly, registering instruments, maintaining meticulous corporate records, and observing tax and SEC disclosures, an OPC can compliantly leverage Philippine real estate for its business ventures.

Prepared by: [Your Name], Philippine corporate & tax lawyer (This article is for informational purposes only and does not constitute legal advice.)