If you're a Filipino entrepreneur looking to bring in foreign partners, or a foreigner exploring business opportunities in the Philippines, one of the first questions that comes up is how much ownership you can actually hold. The rules are set primarily by the Foreign Investments Act and updated through the regularly issued Foreign Investment Negative List. As of mid-2026, the current framework under the 13th Regular Foreign Investment Negative List (promulgated by Executive Order No. 113, s. 2026, effective May 2, 2026) determines exactly where full foreign ownership is allowed, where it is capped, and where it remains prohibited.

This article explains the current foreign equity limits in clear, practical terms—what the law actually permits today, how the limits apply to real businesses, what documentation and steps are involved, and the common situations ordinary investors and business owners encounter.

The Legal Framework: Foreign Investments Act and the Negative List

The primary law is Republic Act No. 7042, the Foreign Investments Act of 1991, as amended by RA 8179 (1996) and significantly liberalized by RA 11647 (2022). Under Section 5 of the FIA (as amended), a non-Philippine national may own up to 100% of the capital of a domestic enterprise upon registration with the Securities and Exchange Commission (SEC), unless foreign participation is prohibited or limited by the Constitution, existing laws, or the Foreign Investment Negative List.

The Negative List is issued by the President every two years. It is divided into two parts:

List A — Activities reserved to Philippine nationals or with foreign equity limits mandated by the 1987 Constitution (particularly Article XII on national economy and patrimony) or specific statutes.
List B — Activities where foreign ownership is limited for reasons of national security, defense, public health and morals, or to protect micro and small enterprises.

The 13th Regular Foreign Investment Negative List under EO 113, s. 2026, took effect on May 2, 2026. It maintains core constitutional restrictions while incorporating earlier liberalizations, including those from the amended Public Service Act (RA 11659, 2022) and the Retail Trade Liberalization Act. It also clarifies treatment of renewable energy and narrows the scope of activities considered “public utilities.”

As a general rule, if your business activity is not listed in the 13th FINL, you can register a corporation with up to 100% foreign equity. Export enterprises (those exporting at least 60% of production or services) generally enjoy full foreign ownership outside the Negative List. Domestic market enterprises face additional capitalization rules but can still reach 100% foreign ownership when not restricted.

Current Foreign Equity Limits Under the 13th FINL (2026)

Here are the key limits that apply in practice:

Fully open to 100% foreign ownership (activities not covered by the Negative List or expressly liberalized):

Most manufacturing activities (non-defense related)
Information technology, software development, and business process outsourcing (BPO) services
Renewable energy projects (solar, wind, hydro, ocean/tidal) — explicitly confirmed as open to 100% foreign ownership in the 13th FINL
Retail trade enterprises meeting the minimum paid-up capital requirement (currently PhP 25 million)
Hotels, resorts, restaurants, and tourism-related services (generally)
Many logistics, transportation support, and infrastructure services that fall outside the narrowed definition of “public utility”
Export-oriented enterprises

Limited foreign equity (List A and List B examples):

Sector/Activity	Maximum Foreign Equity	Notes / Legal Basis
Mass media (except recording and certain internet businesses)	0%	Constitutional reservation (List A)
Practice of licensed professions (law, medicine, engineering, accountancy, etc.)	0%	Constitutional (List A); reciprocity may apply for some professions under bilateral agreements
Public utilities (power distribution, water, certain telecom infrastructure)	40%	Constitution Art. XII, Sec. 11; narrowed scope under amended Public Service Act
Exploration, development, and utilization of natural resources	40%	Constitution Art. XII, Sec. 2 (List A); large-scale projects may use Financial or Technical Assistance Agreements (FTAA) allowing up to 100% foreign participation during exploration phase
Private land ownership / corporations owning private land	40% foreign (i.e., at least 60% Filipino)	Constitution Art. XII, Sec. 7; corporations must meet Filipino ownership threshold to hold land title
Educational institutions	40%	List A
Advertising	30%	List A
Private recruitment agencies / certain defense-related construction	25%	List A
Private security agencies	0% or heavily restricted	List A
Small-scale mining	0%	List A
Manufacture/repair of firearms, ammunition, and certain defense items	0% or limited	List A / List B
Gambling and certain gaming establishments	Limited (often 40%)	List B
Micro and small domestic market enterprises below capitalization thresholds	Reserved to Filipinos unless conditions met	FIA as amended by RA 11647; see capitalization rules below

Important clarification on public utilities vs. public services: The 13th FINL reflects the 2022 amendment to the Public Service Act. Many activities previously treated as public utilities (certain transport, logistics, and infrastructure services) are now classified as public services open to higher or full foreign ownership. Only true public utilities carrying the constitutional 40% cap remain restricted. Classification depends on the specific activity and implementing rules issued by the relevant regulator.

Retail trade note: Full (100%) foreign ownership is allowed for retail enterprises with paid-up capital of at least PhP 25 million. Smaller retail operations below this threshold generally require majority Filipino ownership.

Capitalization Requirements for 100% Foreign-Owned Domestic Market Enterprises

Under the FIA as amended by RA 11647, a domestic market enterprise (one that primarily sells to the Philippine market) that is not on the Negative List may be 100% foreign-owned, but it must meet minimum paid-in capital requirements:

Standard minimum: US$200,000 (or equivalent) paid-in capital.
Reduced to US$100,000 if the enterprise:
1. Involves advanced technology as determined by the Department of Science and Technology (DOST), or
2. Is endorsed as a startup or startup enabler under the Innovative Startup Act (RA 11337), or
3. Employs at least 15 Filipino direct employees (majority of total direct employees must be Filipino).

These rules make it significantly easier for foreign investors to enter smaller-scale or tech-driven domestic businesses compared to pre-2022 requirements. Export enterprises generally do not face the same domestic-market capitalization floor for 100% foreign ownership.

Step-by-Step: How to Check and Set Up Allowable Foreign Equity

Define your exact business activity — Be precise (e.g., “solar power generation and sale” vs. generic “energy”). Vague descriptions can lead to wrong classification.
Check the 13th FINL — Review EO 113, s. 2026 (available on the Official Gazette website) or consult the latest SEC or Board of Investments (BOI) guidance. Many law firms publish updated summaries.
Determine if it is a domestic market or export enterprise — Calculate projected export percentage if relevant.
Assess land involvement — If the business will own or need to hold title to private land, the corporation must generally maintain at least 60% Filipino ownership regardless of the FIA allowance.
Prepare and file with SEC — For a stock corporation: name reservation, Articles of Incorporation and By-laws (stating authorized capital and foreign equity), Treasurer’s Affidavit showing paid-in capital, and supporting documents for foreign stockholders/directors (passports, apostilled or authenticated board resolutions or powers of attorney, proof of inward capital remittance).
Register capital with Bangko Sentral ng Pilipinas (BSP) if required for certain incentives or statistical purposes.
Obtain subsequent permits — BIR tax registration, local government business permits, and sector-specific licenses (e.g., from DOE for energy, NTC for telecom).
Monitor ongoing compliance — Annual reporting, maintaining required Filipino employee ratios or technology commitments if you used the lower capitalization track.

SEC online registration has made the process faster—complete applications with proper documents are often processed within a few working days. Foreign documents typically require apostille (under the Apostille Convention, to which the Philippines is a party) or authentication by the Philippine embassy/consulate.

Common Pitfalls and Real-World Scenarios

Many investors run into trouble by assuming “100% foreign ownership is now allowed everywhere.” The 13th FINL still protects sensitive sectors, and land ownership remains constitutionally restricted.

Common pitfalls:

Misclassifying a business as “not a public utility” when regulators later determine it falls under the 40% cap.
Forming a 100% foreign corporation that later acquires land without adjusting ownership to 60/40, creating title defects.
Using the US$100,000 capital track without actually meeting the 15-Filipino-employee or advanced-technology condition, risking later challenges.
Ignoring reciprocity requirements for telecommunications or certain professional services.
Relying on outdated 11th or 12th FINL information instead of checking the 13th list effective May 2026.

Real-life scenarios:

A foreign investor wants to put up a chain of specialty coffee shops: If paid-up capital meets PhP 25 million and the activity is treated as retail/service (not on Negative List), 100% foreign ownership is possible.
A Filipino tech founder wants a foreign venture capital firm to take majority stake in a software startup: Possible at 100% foreign if the company qualifies under the advanced technology or startup endorsement route and meets employee conditions for lower capital.
An expat wants to operate a small sari-sari store or neighborhood retail business: Likely needs a Filipino partner or must scale capital to the retail threshold; otherwise it falls under reserved micro/small enterprise rules.
A foreign company wants to build and operate a power distribution grid: Subject to the 40% public utility cap.
A mining exploration company seeks 100% foreign participation: Possible under an FTAA for the exploration phase even if development/utilization is capped at 40%.

Frequently Asked Questions

Can foreigners own 100% of a business in the Philippines in 2026?
Yes, in most sectors not included in the 13th Foreign Investment Negative List. Full ownership is common in manufacturing, BPO/IT, renewable energy, qualifying retail, and many services. Check the specific activity against EO 113, s. 2026.

What is the foreign equity limit for public utilities?
40% under the Constitution. However, many activities previously considered public utilities are now treated as public services open to higher or 100% foreign ownership following the 2022 Public Service Act amendment and its reflection in the 13th FINL.

Is renewable energy fully open to foreign investors?
Yes. The 13th FINL confirms up to 100% foreign ownership for solar, wind, hydro, and other renewable energy projects.

Can a foreigner own land in the Philippines through a corporation?
Foreigners cannot directly own private land. A corporation may hold land title only if it maintains at least 60% Filipino ownership (40% foreign equity cap). Many foreign investors instead lease land for up to 50 years (renewable for another 25 years) or structure projects on leased property.

What is the minimum capital for a 100% foreign-owned company?
For domestic market enterprises not on the Negative List, the standard is US$200,000 paid-in capital. This can be reduced to US$100,000 if the enterprise involves advanced technology (DOST-determined), is endorsed as a startup, or employs at least 15 Filipino direct employees.

How often is the Foreign Investment Negative List updated?
Every two years by executive order. The current version is the 13th Regular FINL under EO 113, s. 2026, effective May 2, 2026.

Can foreigners practice law, medicine, or other professions in the Philippines?
The practice of licensed professions is generally reserved to Filipino citizens (0% foreign equity in List A). Some professions allow limited foreign practice under reciprocity agreements or through management/service companies, but the actual professional practice remains restricted.

What documents do foreigners need to register a company?
Typical requirements include apostilled or authenticated passports, proof of capital remittance, Articles of Incorporation showing the allowed foreign equity, and designation of a resident agent. SEC handles incorporation; additional permits come from BIR, LGUs, and sector regulators.

Does the Negative List affect existing companies?
Generally, existing companies are grandfathered, but new investments, expansions, or changes in ownership must comply with the current list. Significant changes may require SEC amendment and re-evaluation.

Where can I find the official 13th FINL?
The full text is in Executive Order No. 113, s. 2026, published on the Official Gazette website (officialgazette.gov.ph). Summaries and guidance are also available from the SEC and Board of Investments.

Key Takeaways

Under the Foreign Investments Act (RA 7042, as amended), foreigners may own up to 100% of enterprises not covered by the Negative List.
The current rules are in the 13th Regular Foreign Investment Negative List (EO 113, s. 2026, effective May 2, 2026), which maintains constitutional 0% and 40% caps in sensitive sectors while confirming 100% openness in renewable energy and many services.
List A covers constitutional and statutory restrictions (mass media 0%, professions 0%, public utilities 40%, land-related 40%, etc.). List B covers security, defense, health, morals, and SME protection (often 40% or lower).
Capital requirements for 100% foreign domestic market enterprises are US$200,000 standard or US$100,000 under advanced technology, startup endorsement, or 15+ Filipino employee conditions.
Land ownership remains restricted—corporations need at least 60% Filipino ownership to hold private land titles; leasing is the common workaround.
Always verify your specific business activity against the latest Negative List and consult the SEC registration process early. Classification details (especially public utility vs. public service) and proper structuring determine what is actually possible.
The framework continues to liberalize investment while protecting core national interests, giving both Filipino business owners and foreign investors clearer pathways when the rules are followed correctly.

Understanding these limits upfront helps you structure your investment properly from the start and avoid costly corrections later. The rules are designed to balance openness with safeguards, and the 13th FINL reflects ongoing efforts to make the Philippines more competitive while respecting constitutional boundaries.