Investing in Philippine Real Estate - Smart Structures for Foreigners to Succeed Despite Ownership Limits

By: Noel C Ducusin

Foreign investors and corporations interested in real estate development in the Philippines often encounter the restriction that at least 60% of a development or joint venture corporation must be owned and controlled by Filipino individuals or entities. At first glance, this may seem like a significant barrier to entry. However, is this really a dealbreaker for profitable real estate ventures in the country? Let's explore the options available for structuring investments effectively.

Shareholder Agreements & Structuring Control Beyond Ownership

The restriction on foreign ownership applies strictly to the percentage of equity and voting rights - but how these shares are voted on is an entirely separate matter. Through carefully structured shareholder agreements between the 60% Filipino-owned shares and the 40% foreign-owned shares, investors can establish mechanisms to jointly decide on crucial business matters including but not limited to approval of new projects, liquidation or sale price of assets, admission of new investors that could dilute existing shareholdings, and the like. Such agreements ensure that foreign investors maintain a level of influence beyond their nominal ownership percentage focusing on profitability rather than mere control

Asset Liens & Securing Investments Beyond Share Ownership

Ownership and control of shares do not necessarily equate to control over the company's assets. Investors can use liens as a financial instrument to protect their interests. By placing liens on company assets foreign investors can secure their investments ensuring that their financial contributions are protected even if ownership changes in the future. These liens can be formally annotated on property titles creating a legal safeguard against any adverse ownership shifts.

Long-Term Leases & Maximizing Investment Returns

Ownership is separate from possession - meaning that foreign investors can still secure control over real estate assets through long-term leases. If the business strategy focuses on generating cash flow through rentals rather than selling properties, then leasing becomes a highly viable option. Additionally, these long-term lease agreements can be assigned to third parties at a profit further enhancing investment flexibility and returns.

The 40% Equity Share is Still A Strong Position

Even in a worst-case scenario, holding a 40% equity share still provides foreign investors with significant influence over major corporate decisions. Under current Philippine laws, major corporate resolutions such as liquidation, investment of corporate funds in unrelated businesses, amendments to the company's charter, and the like, require a supermajority vote of at least two-thirds (approximately 67%) of all shares. This means that a 40% stake is still a blocking minority offering substantial control over major corporate decisions.

Rethinking Investment Objectives Profitability Over Ownership

At the core of any investment is the goal of generating returns and not necessarily owning a majority stake in the joint venture corporation. Structuring a real estate investment with a focus on revenue generation and asset control through contractual agreements allows foreign investors to participate in the lucrative Philippine real estate market without being overly hindered by ownership restrictions. By leveraging shareholder agreements, asset liens, long-term leases, and other methods of strategic structuring, foreign investors can still maintain significant control to protect and grow their investments even with a less than majority equity position.

About the Author

Atty. Noel C. Ducusin is the Director for M&A at DoingBusinessPH, where he works with offshore investors—primarily from Japan, Europe, the US, and Southeast Asia—seeking to enter the Philippine market through acquisitions, joint ventures, and strategic partnerships. He also advises local companies, family offices, and high-net-worth individuals on originating and executing transactions, including preparing businesses to be investment-ready through reverse due diligence.

His work spans the full M&A cycle: identifying counterparties, managing due diligence, leading negotiations, structuring transactions, arranging financing, and coordinating with trusted vendors such as banks, suppliers, and contractors. For startups and new ventures, he helps design fundraising-ready structures and connects them with investors, making DoingBusinessPH a natural bridge between global capital and local opportunity.

Beyond transactions, Noel and his team provide training and digital resources that demystify Philippine business and regulatory frameworks, giving foreign investors the confidence to navigate the local landscape.

A lawyer by training with a degree in Business Management, Noel is also Senior Partner at N. Ducusin & Partners Law Offices, which specializes in Mergers & Acquisitions, Investments, Cross-Border Regulatory, and Corporate Advisory. Over the years, he has developed deep, practical expertise in corporate finance, company valuation, and financial modeling through hands-on involvement as part of the deal team in live transactions. This combination of legal and financial experience allows him to bridge both perspectives seamlessly, ensuring that deals are not only executed but positioned for long-term success.

He is always looking forward to comparing notes with investors, startups, and vendors to explore where his clients’ mandates align with theirs and to uncover potential opportunities and collaborations that benefit both sides. Please feel free to connect with him to continue the conversation and explore where your goals and his clients’ interests may intersect.

His mission for this blog is to help foreign investors, business owners, and managers by breaking down complex legal concepts and dense technical material into simple, straightforward, and actionable insights for better business decisions. Articles and briefs are written in plain everyday language, without jargon or unnecessary academic writing—the simpler and more practical, the better.

“Everything should be made as simple as possible, but no simpler.” – Albert Einstein