Things You Need to Know About the Owning a Real Estate in the Philippines
Foreign Ownership of Philippine Real Estate & Assets
Foreigners can protect their Philippine investments into Philippine real estate and other investment assets. We partner with Foreign Nationals so they can protect their Philippine investment interests. More information on this is provided below, and or contact us for further information.
Right To Own Philippine Real Property
Currently the general rule is that only Filipino citizens and corporations or partnerships at least 60% Philippine owned are entitled to acquire land in the Philippines. As an expection to this rule, an alien acquisition of Philippine real estate is allowed in the following cases. Acquisition before the 1935 constitution. Acquisition thru hereditary succession if the foreign acquiree is a legal heir. Purchase of not more than 40% interest as a whole in a condominium project. Purchase by a former natural born Filipino citizen subject to the limitations prescribed by law. A Filipino who is married to an alien retains their Philippine citizenship, unless by their act or omission they are deemed to have renounced their Philippine citizenship.
Special Visas for Foreigners Investing in the Philippines
There are different visa options available to foreigners that allow foreign investment and of Philippine land and real estate properties. You may visit the official web site of the Philippines Government Bureau of Immigration for more information. http://www.immigration.gov.ph/.
We process these types of visas for those that choose to and that qualify.
- Foreign Ownership as a Philippine Corporation
The typical common way for foreign nationals to invest in Philippine real estate is for the Foreign national and or foreign corporation to create a Philippine corporation to hold title. This allows the Philippine corporation of a foreign national or foreign corporation less investment risk and more control of their Philippine real estate investment, and other Philippine investment assets. Foreign nationals, and corporations may 100% own a Philippine condominium or town home. For private land, residential home with land lot and or commercial building with land lot ownership the foreign national and or corporation forms a Philippine Corporation to take ownership of the property. On paper, a Philippine Corporation by Philippine law will be a maximum of 40% foreign owned, and a minimum of 60% Filipino owned with a minimum of five incorporators. The Philippine corporation by law shall have a main bank account tied to it before and upon incorporation. A foreign national may be the sole person on the Philippine corporation bank account once after the Philippine corporation has been created and power of attorney has been handed over to the foreign investor at the time of incorporation. Thus allowing the foreign national total control over the funds derived and paid out from the Philippine Corporation and from the income or sale of the asset or real estate property.
- Form a Philippine Corporation to hold Title
We provide our foreign national clients incorporation services, and to partner with them as co-incorporators to be teamplayers with them in their Philippine investment interests. Most incorporations are simple and affordable to process depending on the type of corporation to be formed. Different types of corporations have different rules, regulations, and minimum capital funding requirements. Typical incorporations to hold Philippine real estate may be a "Trading or Marketing Company" or "Holding Company" or "Real Estate Activities" or something similar to be able to buy, hold and sell Philippine real estate property. The first step to forming a Philippine Corporation is having Philippine partners you can trust to be team players with you in your Philippine investment plans. We do excatly that by providing foreign nationals the abilility to lessen their risk, and protect their Philippine investments and interests. Many times the Philippine incorporators will be Philippine family, relatives, friends, business associates whom the foreign national can trust to be a part of the Philippine corporation. We offer to be a part of the 60% Philippine interest with a foreign investor wishing to form a Philippine corporation. We provide our foreign partners the ability to control their Philippine investments, and lessen their risk without having to worry about what the 60% Philippine partners will do. With additional separate legal enforceable agreements such as a power of attorney and other types of agreements, we become team players with our foreign investor partners wishing to make Philippine investments without having their investments at risk in case of unforeseen events or changes in their investments plans. If you are interested to know more about what we do and how we help protect our foreign clients Philippine investments interests, contact us with your further questions, and or lets arrange a meeting so we can get to know each other and discuss your investment plans. We only provide legal means for foreign investors to protect their capital, and interests in Philippine investments. We provide services that follow Philippine investment laws, rules, regulations, and do not provide anyone services to violate these.
- New Dual Citizenship Laws Affecting Property Ownership
Dual citizenship is now newly available for the following. Dual citizenship means having two citizenships and passports from two different countries. Former Philippine citizens born in the Philippines, but that have immigrated to another country and obtained citizenship of that country. Dual citizenship allows the citizenship holder full rights of possession of Philippine real estate property. Currently this is a new law and the procedures to implement this new law are not yet in place. Check back for updates on this new law, and the implementation procedures.
- Foreigner Married to a Philippine Citizen
If holding title as an individual, a typical situation would be that a foreigner married to a Philippine citizen would hold title in the Philippine spouses name. The foreign spouse name cannot be on the property Title but can be on the contract to buy the property. In the event of death of the Philippine spouse, the foreign spouse is allowed a reasonable amount of time to dispose of the property and collect the proceeds or the property will pass to any Philippine heirs and or relatives. As a foreign investor caution should be taken upon considering and taking title to Philippine real estate in this manner.
- Foreign Leasing of Philippine Real Estate Property
A foreign national and or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years, and renewable for another 25 years. Or lease the property in your Philippine Corporation name for an unlimited period of time.
- Former Philippine Citizens
"Balikbayan", which is a former natural born Filipino citizen, and now is a citizen of another country is entitled to own for residential purpose 1,000 square meters of residential land, and one hectare of agricultural or farm land. For business purpose 5,000 square meters of urban land or three hectares of rural land.
Philippine Real Estate Sales Transaction & Closing Costs
Buyers transaction or closing costs include the following. Documentary Stamp Tax - P5.00 per P1,000 of contract price, or zonal value or fair market value, which ever is higher. Transfer Tax - P5.00 per P1,000 of contract price, or zonal value or fair market value, which ever is higher. Registration Fee - P1.50 per P1,000 of contract price, or zonal value or fair market value, which ever is higher. The seller is responsible for transaction closing cost of capital gains tax.
Philippine Law Real Estate Acquisition and Disposition Definitions
Acquisition is the act of procuring or getting a hold of real estate property. Disposition is the manner of alienation, transfer of possession and ownership thereof as prescribed by the Philippine law. The acquisition and disposition of real estate is embodied in written agreements or contracts voluntarily entered into and subscribed by the selling and buying parties thereof, before a public officer designated as the Notary Public of the City or Province where the subject property is located. Thereafter, the instrument embodying the particular real estate transaction is required by law to be recorded in the Registry of Deeds in the City or Province where the real estate property is involved and located. The Philippines uses the "Torrens" system of real estate ownership. See below for more information.
Torrens System of Real Estate Ownership
An adapted form of the "Torrens" system of land registration is used in the Philippines. The system was adapted to assure a buyer that if he buys a land covered by an Original Certificate of Title (OCT) or the more familiar Transfer Certificate of Title (TCT) issued by the Register of Deeds, the same will be absolute, indefeasible and imprescriptible. The registered owner will never lose his ownership to squatters no matter how long such land was illegally occupied.
Condominium Residential Commercial Development Ownership Law
Presidential Decree No. 957, which regulates the sale of subdivision and condominium developments, and providing penalties for violations thereof. The National Housing Authority has exclusive jurisdiction to regulate real estate trade and business, a function, which is presently exercised by the Housing and Land Use Regulatory Board (HLURB). Certain conditions are required before a license to sell condominium development units and or subdivision development lots and homes is issued to a Filipino or Foreign owned individual or corporation. The requirements include a certificate of registration, a performance bond, and an approval of the building plans and specifications. Violation of these rules could mean fines, cancellation of license and or imprisonment.
