How Foreigners Can Own Property in the Philippines

The 1987 Philippine Constitution prohibits foreign nationals from owning land directly. Article XII, Section 7 states that private lands may only be transferred or conveyed to Filipino citizens, or to corporations or associations that are at least 60% Filipino-owned. This restriction applies to all types of land — residential, agricultural, commercial, and industrial — across the entire country, including Bohol.

However, the Constitution does not prohibit foreigners from owning buildings or other improvements on land. A foreign national can legally own a house, a resort structure, or any other building — just not the land beneath it. This distinction creates several practical pathways for foreign property ownership, which we explore in detail below.

The most common structure for foreign land ownership is the 60/40 corporation. Under this arrangement, a Philippine corporation is formed with at least 60% of shares owned by Filipino citizens and up to 40% owned by the foreign buyer. The corporation then purchases and holds the land title. The foreign owner typically serves as a director or officer of the corporation, giving them management control over the company and, by extension, the property.

This structure is legal and widely used, but it requires genuine Filipino shareholders — nominee arrangements where Filipinos hold shares solely on behalf of the foreign buyer are technically illegal and can be challenged. Many foreign buyers partner with a trusted Filipino spouse, business partner, or family members of their spouse. Legal fees for incorporating typically range from PHP 30,000 to PHP 80,000, and the corporation must file annual reports with the Securities and Exchange Commission (SEC).

It is essential to work with a reputable Philippine attorney who specialises in foreign property ownership when setting up this structure. The articles of incorporation, by-laws, and shareholder agreements should be carefully drafted to protect the foreign investor's interests within the bounds of the law.

Foreign nationals can enter into long-term lease agreements for land in the Philippines. Under the Investor's Lease Act (Republic Act 7652), foreign investors may lease private land for an initial period of up to 50 years, renewable once for another 25 years — a total of 75 years. The leased area must not exceed 1,000 square metres for residential use or 5,000 square metres for other purposes, though these limits can be exceeded for investments of sufficient scale.

A well-drafted lease agreement, registered with the Registry of Deeds and annotated on the land title, provides substantial security. The lessee can build on the land, and the improvements (buildings, structures) are owned by the lessee for the duration of the lease. Upon lease expiration, ownership of improvements typically reverts to the landowner unless the lease agreement states otherwise.

Leasehold is often the simplest and most straightforward option for foreign buyers who do not have a Filipino spouse or business partner. It avoids the complexity of corporate structures while still providing long-term security of tenure.

The Philippine Condominium Act (Republic Act 4726) allows foreign nationals to own condominium units outright, provided that foreign ownership in any single condominium project does not exceed 40% of the total units. This is the only form of real property that foreigners can own directly in their own name.

In Bohol, condominium developments are relatively limited compared to Metro Manila or Cebu City, but a growing number of condo-hotel and resort-condo projects are emerging, particularly in Panglao. When purchasing a condominium, the buyer receives a Condominium Certificate of Title (CCT) in their own name, which is a genuine ownership document registered with the Registry of Deeds.

Condominium ownership is the cleanest legal option for foreigners, but the trade-off is that you do not own the land — only the unit and your proportional share of common areas. This is suitable for buyers who want a vacation home or investment unit without the complexity of land acquisition.

Foreign nationals married to Filipino citizens can have land titled in their spouse's name. Under Philippine law, the Filipino spouse can own land without restriction. If the couple is married under the absolute community of property regime (the default for marriages after the 1988 Family Code), property acquired during the marriage is co-owned — but the title can only be in the Filipino spouse's name.

This is the most common pathway for foreign retirees and long-term residents who are married to Filipinos. It is straightforward and avoids corporate structures or lease arrangements. However, it is important to understand the legal implications: in the event of separation or death, Philippine family law and inheritance rules apply. A well-drafted prenuptial agreement (executed before marriage) and a Philippine will can help protect the foreign spouse's interests.

Foreign buyers using this route should ensure the land title (TCT) is properly issued in the Filipino spouse's name and registered with the Registry of Deeds. Joint bank accounts and documented financial contributions can help establish the foreign spouse's financial interest in the property.