There are no industries closed to private enterprise. The Philippine Constitution encourages private enterprises to broaden the base of their ownership. However, the exploration, development and utilization of natural resources are under the full control and supervision of the government. For this purpose, the government may enter into co-production, joint venture or production-sharing agreements with private enterprises that are at least 60% owned by Filipino citizens or Philippine nationals.

As an exception, large scale exploration, development and utilization of minerals, petroleum and other mineral oils are open to foreign owned corporations in areas of financial or technical assistance.


Restrictions on Foreign Ownership
Investment laws permit 100% foreign ownership in a Philippine enterprise, unless the enterprise will be undertaking activities listed in the Foreign Investment Negative Lists (FINL). The FINL is issued under the Foreign Investments Act of 1991, and prescribes the maximum level of foreign equity for covered activities.

The banking industry is not included in the FINL but is subject to ownership restrictions under specific legislation. Currently, foreign ownership in Philippine banks is limited to 60%, although the General Banking Law of 2000 has established a framework for 100% foreign ownership in the future.

There are no foreign ownership restrictions for insurance companies, but there are minimum capitalization requirements. If foreign ownership is 60% or greater, an insurance company requires P250 million capital as well as a contributed surplus fund of P50 million. For foreign owned reinsurance companies, the capitalization requirement is P500 million. Securities with a significant market value also have to be deposited with the Insurance Commission.

Private ownership of land is reserved for Philippine citizens and corporations owned at least 60% by Filipinos. Foreigners may own buildings on leased land. A private corporation that is 60% Filipino owned may hold alienable public lands only through lease. Under the Investors' Lease Act of 1993, foreign investors may lease land for certain industrial and agricultural projects for a straight period of 50 years, renewable for another 25 years.

The Philippines has entered into bilateral investment agreements with Argentina, Australia, Austria, Bahrain, Bangladesh, Belgo-Luxembourg, Cambodia, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, India, Indonesia, Iran, Italy, Korea, Kuwait, Mongolia, Myanmar, the Netherlands, Pakistan, Portugal, Romania, Russia, Spain, Sweden, Switzerland, Taiwan Province of China, Thailand, Turkey, United Kingdom, Venezuela, and Vietnam.


These treaties essentially provide for the mutual promotion and protection of investments in the territories of the contracting countries. They ensure fair and equitable treatment of investments by investors in the other contracting country, provide for unrestricted transfer of investments and investment returns, and establish procedures for settling disputes between investors in the contracting countries.

(Acknowledgment: these are excerpts from the book ”Doing Business and Investing in the Philippines” by the Isla Lipana & Co., a member of the PriceWaterHouseCoopers with website at www.pwc.com/ph)