Philippines land ownership rules impact FDI

Author: Brian Yap | Published: 17 May 2017

The Philippines has moved in recent years to liberalise several sectors of the economy to simulate foreign direct investment (FDI), but foreign land ownership is one area that still faces a number of regulatory hurdles.

While foreign ownership ceilings remain set on a number of sectors, including the 40% limit on the telecommunications industry, the government signed a law in July 2014 allowing a foreign bank, subject to certain requirements, to own up to 100% of a local lender.

"Some sectors are totally liberal in terms of foreign ownership and others have recently liberalised, such as banking," said Alun Evans, partner at Allen & Overy in Singapore. "But the issue pervading all sectors is land ownership that is capped at 40% foreign ownership."

Evans reveals that many of his clients have entered into long-term leases, while some of them have taken up a 40% minority interest in a joint venture...