If you're exploring starting or investing in a business in the Philippines with foreign capital or partners, one of the first questions that comes up is how much ownership non-Filipinos can legally hold. The rules are set primarily by the Foreign Investments Act and updated through the regular Foreign Investment Negative List. The latest version—the 13th Regular Foreign Investment Negative List—took effect on May 2, 2026, via Executive Order No. 113. It clarifies and modestly expands opportunities in some areas while keeping firm protections in others. This guide breaks down the current foreign equity limits in clear, practical terms so you can understand what’s possible for your specific situation.

How Foreign Equity Limits Work Under Philippine Law

The Foreign Investments Act of 1991 (Republic Act No. 7042), as amended by Republic Act No. 8179 and Republic Act No. 11647 (signed March 2, 2022), welcomes foreign investment as a supplement to local capital. The general rule is straightforward: non-Philippine nationals may own up to 100% of a domestic enterprise unless the activity is prohibited or limited by the 1987 Constitution, a specific law, or the current Foreign Investment Negative List.

The Negative List is divided into two parts and is updated every two years:

List A covers activities where foreign ownership is restricted by the Constitution or specific statutes (for example, mass media or the practice of regulated professions).
List B covers activities restricted for reasons of national security, public health and morals, or protection of micro, small, and medium enterprises (MSMEs).

Anything not listed in either List A or List B is generally open to 100% foreign ownership, subject to minimum capitalization rules for domestic-market businesses.

Key Limits Under the 13th Regular Foreign Investment Negative List (Effective May 2026)

Here are the main categories based on the latest list and interacting laws:

Completely or largely closed to foreign ownership (0% foreign equity in most cases):

Mass media, except recording and internet businesses.
Practice of regulated professions (law, medicine, engineering, accountancy, and others), except where reciprocity or specific laws allow limited foreign participation.
Small-scale mining.
Cooperatives (with limited exceptions for former natural-born Filipinos).
Private security, detective, and watchman agencies.
Utilization of marine resources in archipelagic waters, territorial seas, and exclusive economic zones.

Maximum 25% foreign equity:

Private recruitment and placement agencies for local employment.

Maximum 30% foreign equity:

Advertising.

Maximum 40% foreign equity:

Public utilities (electricity distribution, water supply, and similar core utilities; note that RA 11659 narrowed the definition of “public utility,” allowing 100% foreign ownership in many reclassified public services such as certain transport, logistics, and telecommunications activities where reciprocity exists).
Exploration, development, and utilization of natural resources (constitutional 40% cap applies, though renewable energy projects have clearer pathways to higher foreign participation through service contracts or project structures).
Educational institutions.
Ownership or acquisition of private lands by corporations (corporations must generally maintain at least 60% Filipino equity to qualify under constitutional rules).
Commercial fishing in certain contexts and some government procurement or build-operate-transfer contracts.

Up to 100% foreign equity (in most other activities):

Manufacturing (unless specifically listed in List B, such as certain defense-related items).
Export-oriented enterprises.
Business process outsourcing (BPO), information technology, and most professional and consulting services not involving regulated professions.
Renewable energy generation and related activities (clarified under the 13th list as generally open).
Retail trade enterprises with paid-up capital of at least PHP 25 million (full foreign ownership allowed under the Retail Trade Liberalization Act as amended; the 13th list now permits up to 40% foreign equity for smaller retail enterprises below this threshold).
Many public services reclassified under the amended Public Service Act (RA 11659).
Qualified micro, small, and medium domestic-market enterprises that meet the conditions in RA 11647.

Special Rules for Retail, MSMEs, and Domestic-Market Businesses

Retail trade has seen meaningful updates. Enterprises with paid-up capital of PHP 25 million or more can be 100% foreign-owned. Smaller retail businesses now allow up to 40% foreign equity under the 13th list (an expansion from stricter prior treatment).

For domestic-market enterprises not covered by List A or B:

If paid-in capital is less than the equivalent of US$200,000, the enterprise is generally reserved for Philippine nationals.
An exception applies under RA 11647: foreign nationals may own such an enterprise with a minimum paid-in capital of US$100,000 if it involves advanced technology (as determined by the Department of Science and Technology), is endorsed as a startup or startup enabler, or employs at least 15 Filipino direct employees.

Export enterprises face no such capital reservation and can be 100% foreign-owned regardless of size.

Land Ownership and Related Considerations

Foreign individuals cannot own private land in the Philippines. Corporations may acquire private land only if they maintain at least 60% Filipino equity (effectively capping foreign ownership at 40% for land-holding companies). Foreigners can own condominium units (up to 40% of the total units in a building) and may enter into long-term leases (often up to 99 years in certain investment areas under recent laws). Many foreign investors structure operations around leasing rather than owning land.

Step-by-Step Practical Guide to Setting Up with Allowable Foreign Equity

Clearly define your primary business activity and any secondary lines (the classification determines which list, if any, applies).
Check the 13th Regular Foreign Investment Negative List (EO 113) and cross-reference with specific laws such as the Retail Trade Liberalization Act, Public Service Act (as amended), and Renewable Energy Act.
Determine capitalization needs. For domestic-market businesses below US$200,000 equivalent, confirm whether you qualify for the RA 11647 exception (advanced technology, startup endorsement, or minimum 15 Filipino employees).
Decide on ownership structure: 100% foreign-owned corporation (where allowed), joint venture with Filipino partners (commonly 60/40 for land or restricted sectors), or other compliant arrangement.
Prepare incorporation documents that accurately reflect the equity split and business purpose. Foreign documents usually require apostille authentication.
Register with the Securities and Exchange Commission (SEC) for corporations or the Department of Trade and Industry (DTI) for sole proprietorships (foreigners typically use corporations). Processing is usually straightforward when documents are complete.
If seeking fiscal incentives, apply separately with the Board of Investments (BOI) or other investment promotion agencies.
Register capital with the Bangko Sentral ng Pilipinas (BSP) if remitting foreign exchange, and comply with tax registration (BIR) and other permits.

Typical timelines: SEC registration can be completed in a few working days to two weeks with complete requirements. Notarization and apostille add time for foreign investors.

Common Pitfalls and Real-Life Scenarios

Many ordinary investors and expats run into avoidable issues. Using Filipino “nominee” or dummy shareholders to exceed equity limits violates the Anti-Dummy Law (Commonwealth Act No. 108, as amended) and can lead to fines, imprisonment, and forced divestment. Misclassifying an activity (for example, treating a public utility as a regular public service) risks regulatory challenges later.

A common scenario: A foreigner wants to open a small café or retail shop with less than PHP 25 million capital. Under the latest rules, up to 40% foreign equity is now possible, but full ownership usually requires meeting the capital threshold or partnering with Filipinos. Another frequent case involves renewable energy or tech startups—here 100% foreign ownership is generally feasible, but proper documentation of the activity and any employee or technology qualifications is essential.

For joint ventures in 40%-capped sectors (such as certain infrastructure or natural resources), clear shareholder agreements on board control, profit sharing, and dispute resolution help prevent future conflicts.

Documents, Fees, and Government Offices Involved

Typical documents for SEC registration of a domestic corporation (100% foreign or joint venture):

Articles of Incorporation (must state authorized and paid-up capital and equity distribution)
By-laws
Treasurer’s Affidavit
Joint venture or shareholders’ agreement (if applicable)
Proof of capital contribution (bank certificate or foreign remittance documents)
Valid passports or IDs of incorporators and directors (apostilled if issued abroad)
Other supporting documents depending on the industry (e.g., DOST endorsement for advanced technology)

Fees vary with authorized capital stock; expect filing fees, legal research fees, and publication costs. Additional permits from the relevant agency (e.g., DOE for energy, NTC for telecommunications, CAAP for aviation) may be required.

Key offices: Securities and Exchange Commission (SEC) for corporate registration, Department of Trade and Industry (DTI), Board of Investments (BOI) for incentives, and sector regulators.

Frequently Asked Questions

Can a foreigner own 100% of a company in the Philippines in 2026?
Yes, in the majority of sectors not included in List A or List B of the 13th Foreign Investment Negative List. Full ownership is common in manufacturing, most services, export businesses, BPO, IT, and qualified retail or renewable energy projects.

What is the foreign ownership limit for a small retail business?
Retail enterprises with paid-up capital of at least PHP 25 million can be 100% foreign-owned. Smaller retail businesses now allow up to 40% foreign equity under the 13th list.

Which sectors remain completely closed to foreign investors?
Mass media (except recording and internet), regulated professions (with limited exceptions), small-scale mining, cooperatives, and private security agencies are among the activities reserved for Filipinos.

Do I need a Filipino partner for most businesses?
No. You only need Filipino partners or a 60/40 structure in sectors with constitutional or legal caps (such as public utilities, land ownership, or certain natural resources). In open sectors, 100% foreign ownership is allowed.

What are the minimum capital rules for foreign-owned domestic businesses?
Domestic-market enterprises generally need at least US$200,000 equivalent paid-in capital for 100% foreign ownership. The threshold drops to US$100,000 if the business qualifies under RA 11647 (advanced technology, startup endorsement, or at least 15 Filipino employees).

Can foreigners own land through a Philippine corporation?
Corporations can own private land only if they maintain at least 60% Filipino equity (maximum 40% foreign). Foreign individuals cannot own land directly.

How has the law changed for public utilities and telecommunications?
RA 11659 narrowed the definition of public utilities, allowing 100% foreign ownership in many reclassified public services. The 13th list reflects these changes while retaining the 40% cap on core public utilities.

What happens if foreign equity exceeds the allowed limit?
The structure may be declared void or subject to divestment. Violations of the Anti-Dummy Law carry serious penalties, including fines and possible criminal liability.

Where can I find the official full text of the 13th Foreign Investment Negative List?
The complete list is in Executive Order No. 113, s. 2026, available on the Official Gazette website. Always verify the latest version and consult the specific law governing your industry.

Do these rules apply to both new and existing businesses?
The 13th list applies prospectively from its effective date. Existing businesses should review their structures for compliance with any clarifications or changes, especially in retail, public services, and renewable energy.

Key Takeaways

The default position under the Foreign Investments Act is 100% foreign ownership unless the activity appears in List A or List B of the current Negative List.
The 13th Regular Foreign Investment Negative List (EO 113, effective May 2, 2026) introduced targeted expansions, notably allowing up to 40% foreign equity in smaller retail enterprises and confirming clearer pathways in renewable energy and reclassified public services.
Domestic-market businesses below US$200,000 equivalent capital face reservation rules, but exceptions exist for qualifying MSMEs under RA 11647.
Land ownership by corporations is effectively capped at 40% foreign equity; leasing is the common alternative.
Accurate classification of your business activity, proper capitalization, and compliant shareholding structure are essential to avoid regulatory issues.
The Anti-Dummy Law strictly prohibits using nominees to circumvent limits—always use transparent, lawful structures.
For the most current and activity-specific guidance, refer directly to EO 113, the relevant statutes on lawphil.net or the Official Gazette, and consider professional confirmation for borderline cases.

Understanding these limits early helps you choose the right structure, avoid delays, and move forward with confidence in your Philippine business venture.