1. Please briefly describe the current investment climate in the country and the average volume of foreign direct investments (by value in US dollars and by deal number) over the last three years.
The Philippines continues to navigate an opportunity-rich investment landscape marked by external headwinds and renewed multilateral support. In May 2025, the World Bank Group announced a US $22 to 23 billion financing program for the Philippines spanning mid-2025 to 2031, under its new Country Partnership Framework. The facility is designed to support the country’s long-term development agenda, focusing on inclusive growth, human capital, and climate resilience.
Investment promotion agencies such as Board of Investments Philippine Economic Zone Authority approved inward investments worth about $31.5 billion equivalent — a positive signal of investor interest and confidence. Nonetheless, the Philippine Statistics Authority noted that foreign investment activity weakened sharply in 2025. Approved foreign investment pledges for the second quarter of 2025 fell 64.4 percent year-on-year, down to ₱67.38 billion from ₱189.50 billion in the same period of 2024.
Sectoral data reveals that energy, utilities, and infrastructure remain the principal drivers for foreign capital. The electricity, gas, steam, and air-conditioning supply sector accounted for the largest share of foreign pledges in the second quarter of 2025, amounting to ₱54.75 billion. The Bicol Region and CALABARZON emerged as the top destinations for new investments, drawing ₱32.21 billion and ₱21.39 billion respectively. Singapore continued to dominate as the Philippines’ leading investment partner, contributing roughly 79.4 percent of all approved foreign pledges during the period, equivalent to ₱53.48 billion.
Overall, the near-term investment climate reflects mixed signals. While quantitative indicators point to a contraction in pledged and realized inflows, institutional developments, such as the World Bank’s multi-year support, suggest that the medium-term trajectory remains constructive. The Philippine administration’s emphasis on regulatory transparency, infrastructure modernization, and energy transition initiatives is expected to lay the groundwork for a recovery in investment confidence beyond 2025.
2. What are the typical forms of Foreign Direct Investments (FDI) in the country: a) greenfield or brownfield projects to build new facilities by foreign companies, b) acquisition of businesses (in asset or stock transactions), c) acquisition of minority interests in existing companies, d) joint ventures, e) other?
Foreign investment in the Philippines may take several forms, depending on the nature of the business activity and the restrictions set by investment and sector-specific legislation. Investors may enter through greenfield or brownfield projects—greenfield developments involve establishing entirely new facilities or operations, while brownfield projects entail rehabilitating or expanding existing assets. Market entry may also be pursued through equity capital (buying shares in a local company), mergers and acquisitions, whether through asset deals or share purchase transactions, investments in a subsidiary by establishing an entity or a branch, or through financing structures such as debt instruments. Some investors acquire minority stakes in existing enterprises or form joint ventures with local partners to secure an operational foothold.
Capital inflows also occur through portfolio investments in the country’s public equity and debt markets, or through the incorporation of local subsidiaries to serve as operating vehicles. Foreign corporations may likewise conduct business directly in the Philippines by obtaining a license and setting up a branch office, representative office, regional operating headquarters, or regional headquarters. In addition, the legal framework permits participation via technology transfer agreements, franchising, and management contracts, subject to the disclosure and regulatory requirements prescribed by Philippine law.
3. Are foreign investors allowed to own 100% of a domestic company or business? If not, what is the maximum percentage that a foreign investor can own?
The Foreign Investments Act of 1991 (FIA) (Republic Act No. 7042, as amended) liberalized the Philippine economy by permitting foreign investors to own and operate domestic corporations, subject to constitutional and statutory limitations in specific sectors. These restrictions remain the principal framework for determining the extent of allowable foreign equity in Philippine enterprises.
Under the FIA, industries are classified into three main categories:
1. Liberalized Industries, where 100% foreign ownership is
permitted;
2. Partially Nationalized Industries, where foreign
ownership is capped by statute or regulation; and
3. Nationalized Industries, where participation is reserved
exclusively for Philippine nationals.
Liberalized Industries
Foreign investors may own up to 100% of Export Enterprises and large scale Domestic Market Enterprises, provided their activities do not fall within partially nationalized or nationalized sectors.
An Export Enterprise refers to a manufacturer, processor, or service provider exporting at least 60% of its output, or a trader that purchases and exports at least 60% of its goods. A Domestic Market Enterprise, on the other hand, serves primarily the domestic market or exports less than 60% of its production.
Foreign ownership exceeding 40% in a Domestic Market Enterprise is allowed only if it maintains a minimum paidincapital of US $200,000, reduced to US $100,000 for enterprises involving advanced technology as determined by the Department of Science and Technology, endorsed startups or startup enablers under the Innovative Startup Act (R.A. No. 11337), or those employing a majority of Filipino nationals (at least fifteen workers). Registered enterprises employing foreign nationals and receiving fiscal incentives must also implement understudy or skills transfer programs, subject to oversight by the Department of Labor and Employment.
For Export Enterprises, foreign equity may exceed 40% effectively allowing full foreign participation in exportoriented operations. Note that Export enterprises shall register with Board of Investments (BOI) and submit annual reports to ensure continuing compliance with the export enterprise with its export requirement
Partially Nationalized and Nationalized Industries
Restrictions on foreign equity participation in specific sectors are detailed in the Foreign Investments Negative List, composed of List A and List B.
List A enumerates activities where foreign ownership is restricted by constitutional or statutory mandate.
List B covers activities subject to foreign equity limitations for reasons of national security, defense, health, morals, or the protection of small- and medium-scale enterprises.
Amendments to the Negative List may be issued no more than once every two years and apply prospectively, leaving existing investments unaffected. The 12th Regular Foreign Investments Negative List, issued on 27 June 2022 under Executive Order No. 175, remains the most recent version as of 2025.
4. Are foreign investors allowed to invest and hold the same class of stock or other equity securities as domestic shareholders? Is it true for both public and private companies?
Yes, in fully liberalized industries. In general, foreign investors may subscribe to and hold the same class of shares or equity securities as Filipino shareholders in both private and publicly listed corporations, subject to compliance with the foreign ownership limitations outlined under the Foreign Investments Act and other sector-specific legislation. Participation is likewise governed by any restrictions set forth in the company’s Articles of Incorporation or By-Laws, if applicable. The shares they own can have identical rights, privileges, and obligations as those held by domestic shareholder.
In essence, foreign and domestic shareholders enjoy parity of rights and privileges with respect to their equity holdings, except where express legal or charter-based limitations apply. However, in industries with foreign ownership limitation, foreign investors may still hold the same class of shares but only up to the allowable limit.
5. Are domestic businesses organized and managed through domestic companies or primarily offshore companies?
The Philippine legal framework affords foreign investors several options for establishing and managing their business presence in the country. Investors may either incorporate a domestic corporation under Philippine law or extend the juridical personality of their offshore entity through the registration of a branch office, representative office, regional headquarters, or regional operating headquarters.
The appropriate vehicle largely depends on the investor’s intended activities, strategic objectives, and operational scope. In general, operational and revenue-generating activities are almost always conducted by a Philippine company, as this requires a primary license to do business in the Philippines. It is not, however, uncommon to see offshore companies being utilized as a holding company of the Philippine operating company, primarily for tax and/or investment purposes.
Please see our discussion directly below.
6. What are the forms of domestic companies? Briefly describe the differences. Which form is preferred by domestic shareholders? Which form is preferred by foreign investors/shareholders? What are the reasons for foreign shareholders preferring one form over the other?
Foreign investors may establish their presence in the Philippines through any of the following entities:
1) Domestic corporation; 2) Branch office; 3) Representative office; 4) Regional headquarters (RHQ); 5) Regional operating headquarters (ROHQ); 6) Partnership; or 7) Sole proprietorship.
Each vehicle carries distinct legal characteristics, advantages, and regulatory implications depending on the investor’s business model, operational scope, and strategic objectives.
Sole proprietorships fall under the jurisdiction of the Department of Trade and Industry (DTI), while all other corporate forms are supervised by the Securities and Exchange Commission (SEC).
Domestic Corporation
A domestic corporation is a corporation incorporated and existing under Philippine law. It may be wholly owned or majority owned by a foreign parent corporation. It possesses a separate juridical personality from its shareholders and directors, whose liability is limited to their subscribed capital. The range of activities that a domestic subsidiary may undertake is limited by its Articles of Incorporation, By-Laws, relevant legislation, and subject to procurement of any other applicable secondary license(s).
Partnership
A partnership is an organization formed by two or more persons who bind themselves to contribute money, property, or industry with the intent of dividing profits among themselves. Like a corporation, a partnership enjoys a separate juridical personality distinct from that of its partners.
Sole Proprietorship
A sole proprietorship is a business owned and controlled by a single individual. It has no separate legal personality apart from its owner, who bears unlimited personal liability for the debts and obligations of the business. Creditors may proceed against both business and personal assets of the proprietor. Sole proprietorships are required to comply with the same capitalization thresholds as domestic corporations and are registered with the DTI.
Branch Office
A branch office is treated as an extension of a foreign corporation, carrying out the same business activities as its head office. Unlike a domestic corporation, it has no separate legal personality, and therefore contracts entered into in the Philippines are deemed contracts of the foreign parent itself. The parent corporation is directly liable for all obligations incurred by its branch, both within and beyond the Philippine jurisdiction. A branch may engage in revenue-generating activities, provided these are not restricted to Philippine nationals or sectors requiring minimum Filipino ownership.
Representative Office
A representative office likewise lacks separate juridical personality and is fully subsidized by its foreign head office. However, unlike a branch, it cannot engage in revenue-generating activities or derive income from the Philippines. Its function is limited to liaison and promotional work undertaken on behalf of the parent company.
Permissible activities include:
- Disseminating market and technical
information; - Acting as a communication or coordination
center; - Providing after-sales support and training;
Conducting market research and feasibility
studies; and - Facilitating communication between the
parent company and clients or affiliates.
Regional Headquarters (RHQ)
Regional Headquarters serves as an administrative and coordination center for a multinational company’s affiliates, branches, or subsidiaries in the Asia-Pacific region. It acts solely as a cost center and is not permitted to engage in trade, solicit business, or earn income within the Philippines. All operating expenses are financed through inward remittances from the parent multinational.
Regional Operating Headquarters (ROHQ)
A Regional Operating Headquarters functions as an income-generating hub of a multinational company in the Philippines. It may earn revenue exclusively from qualifying services rendered to the parent’s affiliates, branches, or subsidiaries in the Asia-Pacific region and other foreign markets.
Permitted activities include:
- General administration, business planning, and
coordination; - Sourcing and procurement;
- Corporate finance and advisory services;
Marketing control, sales promotion, and
training; - Logistics, research and development, and
product development; - Technical support, communications, and
business development.
Which form is preferred by domestic shareholders?
Domestic investors generally favor incorporating a Philippine company, given its familiarity, flexibility, and ease of alignment with local regulatory and tax regimes. A domestic corporation provides a clear governance structure, straightforward compliance framework, and the ability to attract both local and foreign capital. Ultimately, however, the optimal structure will depend on the specific commercial activities, strategic objectives, and tax considerations of the enterprise.
Which form is preferred by foreign investors/shareholders?
Foreign investors likewise tend to establish a domestic corporation, as it provides a distinct legal personality separate from the foreign parent, enabling local operations to proceed with limited liability and clearer delineation of risk. While alternative vehicles such as branches or representative offices may suffice for narrowly defined mandates, we note that a Philippine subsidiary offers greater flexibility for equity participation, capital expansion, and long-term market integration. The choice of structure, however, remains contingent on factors such as business scope, intended activities and operations, taxation, regulatory exposure, and repatriation strategy.
What are the reasons for foreign shareholders preferring one form over the other?
Foreign shareholders typically gravitate toward the domestic corporation model because it affords both legal insulation and operational autonomy. By creating a subsidiary under Philippine law, investors can shield parent-company assets from local liabilities while maintaining strategic control through shareholding. This format also streamlines ownership transfers, equity restructuring, and capital raising, making it a more adaptable platform for growth. In contrast, branches and representative offices, being mere extensions of the foreign entity, limit flexibility and expose the parent company to direct cross-border liability.
7. What are the requirements for forming a company? Which governmental entities have to give approvals? What is the process for forming/incorporating a domestic company? What is a required capitalization for forming/incorporating a company? How long does it take to form a domestic company? How many shareholders is the company required to have? Is the list of shareholders publicly available?
Under the RCC, the following are the requirements for the formation of ordinary stock corporations:
- Any person, partnership, association, or
corporation, singly or jointly with others but
not more than 15, may organize a corporation
for any lawful purpose or purposes; - There is no minimum capital stock required,
unless otherwise specified under special laws; - The corporate name must not be confusing,
deceptive, illegal, or identical or similar to an
existing business or corporate name; - Directors, who shall number not more than 15,
must each own at least one share in the
capital stock. If the corporation is one vested
with public interest, such as listed companies,
public companies, banks, quasi-banks,
pawnshops, and companies engaged in money
service, independent directors must constitute
at least 20% of the composition of the board of
directors; and - The corporation must have the following
corporate officers: a president who must also
be a director, a treasurer who must be a resident of the Philippines, and a secretary
who must be a resident and also a citizen of
the Philippines.
A corporation acquires juridical personality upon the issuance of a Certificate of Incorporation by the Securities and Exchange Commission (SEC). Further registration may be required for entities wishing to undertake business activities requiring secondary licenses or permits to operate.
A complete list of the documentary requirements may be found on the SEC’s website located here: https://www.sec.gov.ph/company/primary-registration-2 /#gsc.tab=0
Which governmental entities have to give approvals?
Except for sole proprietorships, which fall under the jurisdiction of the DTI, all other corporate forms, including domestic corporations, partnerships, branch offices, representative offices, regional headquarters, and regional operating headquarters are registered with the SEC.
Following incorporation or licensing, entities must complete secondary registrations with the Bureau of Internal Revenue (BIR), the relevant local government unit (LGU), and various social welfare agencies such as the Social Security System (SSS), Home Development Mutual Fund (Pag-IBIG Fund), and Philippine Health Insurance Corporation (PhilHealth).
Where applicable, registration with the Department of Labor and Employment (DOLE) and National Privacy Commission (NPC) must also be secured before commencing commercial operations.
For businesses that are regulated, and would require additional secondary licenses, the corporation should also secure the said license(s) from the appropriate government agencies before commencing operations.
What is the process for forming/incorporating a domestic company?
Application for company registration or license to do business in the Philippines may now be submitted through the SEC’s Electronic Simplified Processing of Application for Registration of Company (eSPARC).
The eSPARC replaced the SEC’s Company Registration System (CRS) in September 2021. It was launched to streamline the registration process for businesses operating in the Philippines. Through eSPARC, users can apply for the registration of OPCs and domestic corporations, as well as for the recording of partner-ships and the licensing of foreign corporations to conduct business.
After SEC approval, standard post-incorporation registrations must still be completed with the BIR, LGU, SSS, Pag-IBIG, PhilHealth, and DOLE. Certain regulated industries may also require additional registrations or endorsements from sector-specific agencies.
What is a required capitalization for forming/incorporating a company?
The capitalization thresholds for domestic corporations and foreign entities are as discussed in Items 3 and 6 above. These depend on the classification of the enterprise (Domestic Market or Export Enterprise), the applicable foreign equity participation, and/or special requirements that would apply to the business activities under special laws or regulations.
For businesses that are regulated, and would require additional secondary licenses, the relevant regulations would typically indicate the paid-up capital requirements and regulations on the use of the said capital.
How long does it take to form a domestic company?
In general, establishing a corporate vehicle in the Philippines typically takes one to three weeks via the eSPARC. If the corporation would need additional licenses though from appropriate government agencies, the timeline could be beyond three weeks, and would vary on a case-by-case basis, as the SEC will require an endorsement clearance from the appropriate government agencies before issuing the primary license.
How many shareholders is the company required to have?
A domestic corporation requires at least two (2) shareholders, unless organized as a one-person corporation. The Revised Corporation Code mandates a board of at least two (2) but not more than fifteen (15) directors, each holding at least one qualifying share in his or her name.
Is the list of shareholders publicly available?
The list of shareholders is accessible through the SEC upon request for the company’s General Information Sheet (GIS). However, details of the ultimate beneficial owner (UBO) are redacted from publicly issued copies to preserve confidentiality and comply with data privacy regulations.
A request for a company’s GIS may be made through the SEC’s Check With SEC service located here: https://checkwithsec.sec.gov.ph/check-with-sec/index For publicly listed and traded companies, the information about shareholders can be accessed via the Philippine Stock Exchange EDGE.
8. What are the requirements and necessary governmental approvals for a foreign investor acquiring shares in a private company? What about for an acquisition of assets?
A tax clearance, formally known as a Certificate Authorizing Registration (CAR), must be secured from the Bureau of Internal Revenue (BIR) prior to the recording of any transfer of shares in the corporate books. The corporate secretary may issue the new stock certificates to the transferee only upon presentation of the CAR, which serves as proof that all applicable taxes arising from the sale or transfer of shares have been duly settled. In addition, the corporate secretary would also need to update the General Information Sheet (GIS) and file this with the SEC. If the foreign ownership in the corporation will change as a result of the acquisition, generally, the company would also need to file a foreign investment form (FIA form) with the SEC.
For asset acquisitions involving real property, a similar CAR must also be obtained from the BIR. In addition, the transaction requires clearance from the City or Municipal Treasurer’s Office where the property is located, particularly for the payment of local transfer taxes and other charges. Transfers of real property must then be registered with the Register of Deeds, while transfers involving motor vehicles must be recorded with the Land Transportation Office (LTO) to perfect title in favor of the purchaser.
If the acquisition involves all or substantially all of the seller’s assets, compliance with the Bulk Sales Law is mandatory, including the registration of the bulk sale with the Department of Trade and Industry (DTI).
Finally, certain regulated industries may require prior approval from sector-specific government agencies where an acquisition of shares results in a change of control or affects ownership thresholds prescribed by law or license conditions.
9. Does a foreign investor need approval to acquire shares in a public company on a domestic stock market? What about acquiring shares of a public company in a direct (private) transaction from another shareholder?
Provided that the foreign ownership restrictions prescribed under FIA are complied with, no special prior governmental approval is required for a foreign investor to acquire shares in a publicly listed company.
Where the acquisition is done through a direct or private transaction with another shareholder, the investor must observe the mandatory tender offer rules and foreign equity ceilings, as discussed in Item 10 below. These requirements ensure the protection of minority shareholders and adherence to statutory ownership thresholds.
10. Is there a requirement for a mandatory tender offer if an investor acquired a certain percentage of shares of a public company?
Under the Securities Regulation Code (SRC), a mandatory tender offer must be conducted by any person or group acquiring the outstanding equity securities of a public company, or of a related or associate company that exercises control over such public company, under any of the following circumstances:
- Acquisition of at least 35% of the outstanding
voting shares, or such number of shares
sufficient to gain control of the board of
directors, within a 12-month period, whether
through one or multiple transactions; - Direct acquisition of at least 35% of the
outstanding voting shares, or such shares
sufficient to gain board control, from one or
more existing shareholders; or - Acquisition resulting in ownership of more
than 50% of the total outstanding equity
securities of the public company.
A public company is defined as (i) a corporation with a class of equity securities listed on an exchange, or (ii) a corporation with assets exceeding ₱50 million and at least 200 shareholders, each holding not less than 100 shares of equity securities.
Depending on the transaction type:
- In scenario (1), the acquirer must make a tender offer to all shareholders for the same number of shares it intends to acquire;
- In scenario (2), the acquirer must make a tender offer for all outstanding voting shares; and
- In scenario (3), the acquirer must make a tender offer for all outstanding equity securities of the company, at a price supported by a fairness opinion issued by an independent financial advisor or equivalent third party.
Additionally, any person intending to acquire at least 15% of the equity securities of a public company is required to file a declaration of intent with the SEC prior to completion of the transaction.
11. What is the approval process for building a new facility in the country (in a greenfield or brownfield project)?
Constructing a new facility in the Philippines requires the procurement of various permits and clearances from national and local government authorities, including the National Building Code, labor regulations, and environmental standards.
Prior to the commencement of construction, the project proponent must secure either an Environmental Compliance Certificate (ECC) or a Certificate of NonCoverage (CNC) from the Department of Environment and Natural Resources (DENR), depending on the environmental impact of the proposed project. Concurrently, the developer must obtain zoning clearance and a building permit, including electrical, sanitary, mechanical, structural, electronics, and architectural permits from the relevant LGU
Upon completion of construction, an Occupancy Permit must be issued by the LGU to certify that the structure complies with approved plans and is safe for use.
Additional environmental permits may also be required, such as those governing air emissions, wastewater discharge, and the storage or treatment of toxic and hazardous substances, where applicable. If the business operations involve heavy machinery or industrial equipment, a permit to operate must be secured from the Department of Labor and Employment (DOLE).
It should be noted that additional permits or endorsements may be required depending on the location, industry classification, or operational nature of the enterprise.
12. Can an investor do a transaction in the country in any currency or only in domestic currency? a) Is there an approval requirement (e.g. through Central Bank or another governmental agency) to use foreign currency in the country to pay: i. in an acquisition, or, ii. to pay to contractors, or, iii. to pay salaries of employees? b) Is there a limit on the amount of foreign currency in any transaction or series of related transactions? i. Is there an approval requirement and a limit on how much foreign currency a foreign investor can transfer into the country? ii. Is there an approval requirement and a limit on how much domestic currency a foreign investor can buy in the country? iii. Can an investor buy domestic currency outside of the country and transfer it into the country to pay for an acquisition or to third parties for goods or services or to pay salaries of employees?
Under Philippine law, transactions may be denominated and settled in any currency mutually agreed upon by the parties. However, if delivery of the stipulated foreign currency becomes impossible, payment must be made in Philippine pesos.
Is there an approval requirement (e.g. through Central Bank or another governmental agency) to use foreign currency in the country to pay:
in an acquisition, or
In general, no prior approval from the Bangko Sentral ng Pilipinas (BSP) or any other government agency is required to use foreign currency for payments related to acquisitions, contracts, or employee compensation. Businesses and individuals are free to settle commercial and financial obligations in foreign currency, provided such transactions are not contrary to existing foreign exchange or anti-money laundering regulations.
to pay to contractors, or
Please see our response above.
to pay salaries of employees?
Please see our response above.
Is there a limit on the amount of foreign currency in any transaction or series of related transactions?
There is no restriction on the amount of foreign currency that may be used in any transaction or series of related transactions.
Is there an approval requirement and a limit on how much foreign currency a foreign investor can transfer into the country?
None.
Is there an approval requirement and a limit on how much domestic currency a foreign investor can buy in the country?
None. However, note that under BSP regulations, a person may import, export, or electronically transfer Philippine legal tender, including banknotes, coins, checks, money orders, and other peso-denominated instruments, up to ₱50,000 without prior authorization. Transfers exceeding this threshold require:
Prior written approval from the BSP; and
For physical cross-border transfers, declaration of the full amount using the prescribed Currencies Declaration Form
Can an investor buy domestic currency outside of the country and transfer it into the country to pay for an acquisition or to third parties for goods or services or to pay salaries of employees?
Foreign investors may not generally purchase Philippine pesos outside the country for direct transfer into the Philippines. While certain foreign banks may offer offshore peso remittance services, these institutions typically source pesos from local Philippine banks.
13. Are there approval requirements for a foreign investor for transferring domestic currency or foreign currency out of the country? Whose approval is required? How long does it take to get the approval? Are there limitations on the amount of foreign or domestic currency that can be transferred out of the country? Is the approval required for each transfer or can it be granted for all future transfers?
Under Philippine law, the import, export, or electronic transfer of domestic currency, including legal tender notes and coins, checks, money orders, and other pesodenominated bills of exchange drawn against Philippine banks is permitted up to ₱50,000 without prior approval from the BSP. However, BSP authorization is required for each transfer exceeding this amount.
For transfers beyond ₱50,000, the following must be complied with:
- Prior written authorization from the BSP; and
- For physical cross-border movements of cash,
a declaration of the total amount being
brought into or taken out of the Philippines
using the prescribed Currencies Declaration Form
With respect to foreign currency, any person transporting or transferring amounts exceeding US $10,000 (or its equivalent) must declare the transaction to the Bureau of Customs using the same Currencies Declaration Form. This requirement applies to both physical transfers and bearer monetary instruments denominated in foreign currency.
Banks are further authorized to require supporting documents and regulatory forms before selling or releasing foreign currency, particularly for large transactions that meet the thresholds set by the BSP.
Whose approval is required?
Please see our response above.
How long does it take to get the approval?
Please see our response above.
Are there limitations on the amount of foreign or domestic currency that can be transferred out of the country?
Please see our response above.
Is the approval required for each transfer or can it be granted for all future transfers?
Please see our response above.
14. Is there a tax or duty on foreign currency conversion?
No. The Philippines does not impose taxes or duties on the direct and specific act of converting foreign currency.
15. Is there a tax or duty on bringing foreign or domestic currency into the country?
No. The Philippines does not impose any tax or duty on the act of bringing foreign currency into the country. Travelers may bring in up to USD 10,000, or its equivalent in other foreign currencies or monetary instruments, without restriction. Amounts exceeding USD 10,000 must, however, be declared to the Bangko Sentral ng Pilipinas (BSP) upon arrival through the prescribed Foreign Currency Declaration Form, which is made available at Philippine ports of entry.
16. Is there a difference in tax treatment between acquisition of assets or shares (e.g. a stamp duty)?
Yes. For asset acquisitions, Section 106 of the National Internal Revenue Code (“NIRC”) provides that the transfer of assets used in business (ordinary assets) is subject to 12% VAT. The seller also recognizes income from the sale, which forms part of taxable gross income subject to regular corporate income tax (RCIT). If the asset sold is a capital asset, such as real property not used in business, the sale is not subject to VAT but is instead subject to 15% Capital Gains Tax (CGT) based on the gross selling price or fair market value, whichever is higher. A Certificate Authorizing Registration (CAR) is required for transfers involving real property.
For share acquisitions, the Capital Markets Efficiency and Promotions Act (“CMEPA”) introduced reforms distinguishing unlisted shares, listed shares, and original issuances. Unlisted shares remain subject to 15% CGT on the seller’s net capital gains. Listed shares, whether traded on local or foreign stock exchanges, are subject to the Stock Transaction Tax (STT) at 0.10% of the gross selling price, in lieu of CGT.
Under the NIRC, both the original issuance of shares and their subsequent sale or transfer are subject to DST, unless covered by CMEPA’s reduced DST rate for original issuances to 0.75% of the par value (or 0.75% of actual consideration for no-par value shares).
17. When is a stamp duty required to be paid?
Under the BIR Revenue Regulation No. 6-2001, Documentary Stamp Tax (DST) must be paid no later than the 5th day of the month following the transaction when the taxable document was made, signed, accepted, or transferred. If the transaction involves the sale of real property classified as a capital asset, the corresponding Capital Gains Tax (CGT) must be paid within 30 days from the date of the execution of the sale or disposition.
18. Are shares in private domestic companies easily transferable? Can the shares be held outside of the home jurisdiction? What approval does a foreign investor need to transfer shares to another foreign or domestic shareholder? Are changes in shareholding publicly reported or publicly available?
Can the shares be held outside of the home jurisdiction?
Yes. Foreign investors may hold shares in Philippine private domestic corporations, subject to any foreign equity limits in certain sectors as provided by the Philippine 1987 Constitution and the Foreign Investment Act.
What approval does a foreign investor need to transfer shares to another foreign or domestic shareholder?
Under the Revised Corporation Code, no governmental approval is required for a foreign investor to transfer shares to another foreign or domestic shareholder; such transfers are generally recognized as private transactions between parties. However, the transfer cannot be recorded in the corporation’s stock and transfer book unless a Certificate Authorizing Registration (CAR) is first secured from the Bureau of Internal Revenue (BIR). The CAR serves as proof that all applicable taxes on the share transfer have been duly assessed and paid, making it a mandatory prerequisite to the legal recognition and registration of the transfer in the corporate records.
Are changes in shareholding publicly reported or publicly available?
For private corporations, any change in shareholdings must be reflected in an updated General Information Sheet (GIS), which must be filed with the Securities and Exchange Commission (SEC) within seven (7) days from the date the change occurred or became effective. While the GIS of private companies is not publicly posted, it may nevertheless be purchased by any interested party through the SEC’s online portal.
For publicly listed companies, shareholding changes must likewise be reported through an updated GIS, but they are also required to make the appropriate disclosures to the Philippine Stock Exchange (PSE) in accordance with its continuous disclosure requirements.
19. Is there a mandatory FDI filing? With which agency is it required to be made? How long does it take to obtain an FDI approval? Under what circumstances is the mandatory FDI filing required to be made? If a mandatory filing is not required, can a transaction be reviewed by a governmental authority and be blocked? If a transaction is outside of the home jurisdiction (e.g. a global transaction where shares of a foreign incorporated parent company are being bought by another foreign company, but the parent company that’s been acquired has a subsidiary in your jurisdiction), could such a transaction trigger a mandatory FDI filing in your jurisdiction? Can a governmental authority in such a transaction prohibit the indirect transfer of control of the subsidiary?
The Philippines does not maintain a unified mandatory foreign direct investment (FDI) filing or screening regime. Foreign investments generally proceed without prior approval unless they fall within regulated or restricted sectors, such as banking, insurance, telecommunications, energy, public utilities, or other activities subject to foreign ownership caps under the Foreign Investments Negative List. In these sectors, filings or prior approvals may be required from the appropriate regulator (e.g., BSP, IC, NTC, DOE), typically relating to licensing, fit-andproper assessments, or compliance with sector-specific rules rather than FDI screening.
20. What are typical exit transactions for foreign companies?
Foreign investors in the Philippines typically exit their investments through the sale of their equity interests in the local subsidiary or joint venture, either to existing shareholders or to third-party acquirers. Equity divestment remains the most common and efficient exit mechanism, given the flexibility of Philippine corporate law in permitting share transfers and the established regulatory processes governing such transactions.
21. Do private companies prefer to pursue an IPO? i. on a domestic stock market, or ii. on a foreign stock market? iii. If foreign, which one?
In practice, most Philippine private companies continue to pursue initial public offerings (IPOs) on the domestic exchange, the Philippine Stock Exchange (PSE). The PSE remains the predominant venue due to established regulatory familiarity, lower transaction costs relative to foreign exchanges, and strong participation from domestic institutional and retail investors.
While the Philippine Stock Exchange remain the principal listing venue, issuers in high-growth or regionally integrated industries often look to the Stock Exchange of Hong Kong, Singapore Exchange, and Nasdaq Stock Exchange.
22. Do M&A/Investment/JV agreements typically provide for dispute resolution in domestic courts or through international arbitration?
Philippine arbitration law, principally embodied in the Alternative Dispute Resolution Act (Republic Act No. 9285), affords parties broad autonomy in structuring their dispute resolution framework. Parties are expressly permitted to select their preferred arbitral institution—whether domestic or international—and to choose the governing law, including foreign law, to govern their arbitration proceedings and substantive contractual obligations. This policy of party autonomy aligns Philippine practice with international arbitration standards and reinforces the country’s pro-arbitration stance.
23. How long does a typical contract dispute case take in domestic courts for a final resolution?
Contract disputes in the Philippines typically take several years to resolve through the regular court system. Although the Constitution requires courts to decide cases within 90 days from the time they are submitted for resolution, the practical realities of litigation, such as heavy court dockets, frequent postponements, and hearing schedules set months apart due to limited judicial availability, result in significantly protracted timelines. These delays are often compounded by unforeseen circumstances and procedural contingencies beyond the parties’ control, making traditional litigation a lengthy and resource-intensive process.
24. Are domestic courts reliable in enforcing foreign investors rights under agreements and under the law?
Yes. The Philippine judiciary operates as an independent branch of government with full authority to recognize, interpret, and enforce agreements between parties. Courts have the constitutional mandate and jurisdiction to adjudicate contractual disputes and grant appropriate relief, ensuring that valid and enforceable obligations are upheld in accordance with Philippine law.
25. Are there instances of abuse of foreign investors? How are cases of investor abuse handled?
No. While foreign investors occasionally report challenges, such as regulatory delays, policy shifts, or disputes with local partners, the Philippines generally maintains a stable, rules-based investment environment that provides strong legal protections equally available to foreign and domestic investors.
26. Are international arbitral awards recognized and enforced in your country?
Yes. International arbitral awards are recognized and enforceable in the Philippines, consistent with the country’s adherence to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Philippines acceded to the Convention in 1967, subject to a reciprocity reservation, and subsequently incorporated its standards into domestic law through the Alternative Dispute Resolution Act of 2004 (Republic Act No. 9285).
27. Are there foreign investment protection treaties in place between your country and major other countries?
The Philippines maintains an extensive network of bilateral investment treaties (BITs) and treaties with investment provisions, offering foreign investors protections such as fair and equitable treatment, protection against expropriation, national treatment, and access to investor–state arbitration. Key BIT partners include Israel (2024), Syria (2010), Portugal (2003), Austria (2003), Bahrain (2002), Mongolia (2001), Kuwait (2002), India (2001), and Viet Nam (1992), alongside other agreements catalogued by UNCTAD. Under ASEAN, the Philippines has preferential trade agreements with China, Hong Kong, India, Japan, South Korea, and Australia and New Zealand.
The Philippines is also part of multilateral or regional trade and investment agreements, including the Regional Comprehensive Economic Partnership (RCEP), the ASEAN Free Trade Area (AFTA), and it is also a member of the World Trade Organization (WTO).
It also has investment-protective provisions embedded in broader trade agreements and maintains ISDS commitments under various international instruments. These treaties supplement the domestic investment regime, providing additional legal certainty and enforceable protections for investors.
Contributors
Mark S. Gorriceta
Chairman and Managing Partner
Kristine T. Torres
Partner
Hans Richmond R. Ong
Junior Associate
Paola A. Escobar
Junior Associate
