Foreign ownership starts at 100 percent, and the Negative List is the exception

A foreigner may own up to 100 percent of a Philippine company without prior approval. The exceptions sit on the Regular Foreign Investment Negative List, now the thirteenth, issued as Executive Order No. 113 in April 2026. A separate rule reserves small domestic-market companies capitalized below US$200,000 to Philippine nationals.

The rule is 100 percent

The Foreign Investments Act opens with what a foreigner may own. Section 5, as amended in 2022, provides:¹

Without need of prior approval, a non-Philippine national, as that term is defined in Section 3(a), and not otherwise disqualified by law may, upon registration with the Securities and Exchange Commission (SEC), or the DTI in the case of single proprietorships, do business as defined in Section 3(d) of this Act or invest in a domestic enterprise up to one hundred percent (100%) of its capital, unless participation of non-Philippine nationals in the enterprise is prohibited or limited to a smaller percentage by existing law and/or under the provisions of this Act.

Ownership up to 100 percent is the default position. No prior approval is required. And any exception has to come from somewhere else, either an existing law or this Act.

The same section provides that the Commission and the Department “shall not impose any limitations on the extent of foreign ownership in an enterprise additional to those provided in this Act.”¹

So the question for any business is whether its activity appears on a list.

The list, and which one is in force

That list is the Regular Foreign Investment Negative List. The President issues it on the recommendation of the agency that was the National Economic and Development Authority until 2025 and is now the Department of Economy, Planning, and Development.²

The list in force is the thirteenth, promulgated by Executive Order No. 113 on 13 April 2026 and published in the Manila Bulletin on 17 April 2026.³

The twelfth list, Executive Order No. 175 of 2022, is the one it replaced, and the two differ in places that matter: retail trade below 25 million pesos of capital sat in the no-foreign-equity band of the twelfth list and sits at 40 percent in the thirteenth, and the twelfth list’s separate annex on professions is gone. Executive Order No. 113 does not name the earlier Order, and its repealing clause is a general one, so anything written before April 2026 should be checked against the thirteenth list.

The Order states its own effect in a sentence: “Only the investment areas and/or activities listed in the attached 13th RFINL shall be reserved to Philippine nationals, subject to the exceptions and conditions indicated therein.”⁴

What the list reserves

The list has two parts, divided by the source of the restriction. List A collects limits that the Constitution and specific laws impose. List B carries limits imposed for reasons of security, defense, risk to health and morals, and protection of small and medium-scale enterprises.⁵

List A runs to twenty-five entries across five bands. Ten activities admit no foreign equity at all, headed by mass media. Two sit at 25 percent, one at 30 percent, eleven at 40 percent, and one at 100 percent, that last one conditionally.⁶

The only profession the list reserves outright is the corporate practice of architecture, though the Act separately takes professions regulated by a Professional Regulatory Board outside its scope entirely, which is dealt with below.⁷ And advertising sits by itself at 30 percent, which is the complement of the seventy per centum Filipino capital the Constitution requires of that industry.⁸

One footnote qualifies the whole of List A: “Foreign equity participation under the foregoing list is subject to any applicable treaty or international or executive agreement.”⁹

The term “public utility” now covers six sectors

The Constitution requires that a franchise or authorization to operate a public utility go only to citizens or to companies at least 60 percent Filipino-owned. It adds two conditions: foreign participation in the governing body is limited to the foreign proportionate share of capital, and “all the executive and managing officers of such corporation or association must be citizens of the Philippines.”¹⁰

In 2022 the term was defined. The Public Service Act as amended now provides:¹¹

Public Utility refers to a public service that operates, manages or controls for public use any of the following: (1) Distribution of Electricity; (2) Transmission of Electricity; (3) Petroleum and Petroleum Products Pipeline Transmission Systems; (4) Water Pipeline Distribution Systems and Wastewater Pipeline Systems, including sewerage pipeline systems; (5) Seaports; and (6) Public Utility Vehicles.

The same provision adds: “No other person shall be deemed a public utility unless otherwise subsequently provided by law.”¹¹ The 40 percent cap therefore reaches those six sectors, and a business outside them is not capped by being called a utility.

Telecommunications is treated separately. Republic Act No. 11659 defines critical infrastructure, in its own definitions section, to include telecommunications, and provides that foreign nationals “shall not be allowed to own more than fifty percent (50%) of the capital of entities engaged in the operation and management of critical infrastructure unless the country of such foreign national accords reciprocity to Philippine Nationals as may be provided by foreign law, treaty or international agreement.”¹² The Negative List states the same at its single 100 percent entry, which reads in full: “Operation and management of telecommunications in case the country of the foreign national accords reciprocity to Philippine nationals, and up to 50% foreign equity in the absence of such reciprocity”.¹³

Retail trade

The thirteenth list places, in its 40 percent band: “Retail trade enterprise with paid-up capital of less than ₱25,000,000.00 (Section 2 of RA No. 11595)”.¹⁴

The Retail Trade Liberalization Act, as amended by Republic Act No. 11595, provides that foreign-owned partnerships, associations, and corporations may engage or invest in the retail trade business on stated conditions, of which the first is that “[a] foreign retailer shall have a minimum paid-up capital of Twenty-five million pesos (P25,000,000.00)”, and the third that a foreign retailer operating more than one physical store invest at least ten million pesos per store.¹⁵

The capital floor for domestic market enterprises

This provision is not an ownership cap, and it applies even where no cap does. Section 8 provides:¹⁶

micro and small domestic market enterprises with paid-in equity capital less than the equivalent of Two hundred thousand US dollars (US$200,000.00), are reserved to Philippine nationals

The same section allows a floor of US$100,000 instead where any one of three conditions is met: the enterprise involves advanced technology as determined by the Department of Science and Technology, or it is endorsed as a startup or startup enabler under the Innovative Startup Act, or a majority of its direct employees are Filipinos and in no case fewer than fifteen.¹⁶

A foreigner may own all of an activity that appears nowhere on the Negative List, and still not be permitted to own it if the company sells into the domestic market and is capitalized below the threshold.

The qualifier “domestic market” matters. An export enterprise whose products and services fall outside Lists A and B may be 100 percent foreign-owned, and an export enterprise that stops meeting the export requirement is ordered to reduce its domestic sales to not more than 40 percent of total production rather than being unwound.¹⁷

One obligation comes with the incentives. A registered foreign enterprise that employs foreign nationals and enjoys fiscal incentives must implement an understudy or skills development program to transfer technology or skills to Filipinos, monitored by the Department of Labor and Employment.¹⁸

Where this Act does not reach

Section 18, added in 2022, takes two whole fields outside the Act:¹⁹

This Act shall not apply to banking and other financial institutions which are governed and regulated by Republic Act No. 8791, otherwise known as “The General Banking Law of 2000” and other laws under the supervision of the Bangko Sentral ng Pilipinas. Moreover, this Act shall not apply to the practice of professions that are covered by specific laws and fall under the jurisdiction of various Professional Regulatory Boards (PRBs) or any other equivalent regulating body, or those subject to reciprocity agreements with other countries.

A question about foreign ownership of a bank is not answered by this Act or by this list, and neither is a question about a regulated profession. Establish which regime governs before reading a percentage off anything.

How the Filipino share is counted

Every cap above is written as a percentage of foreign equity, which is the same statement as a percentage of Filipino ownership. Whether a particular company meets it is a separate question, because the Act defines a Philippine national by a test that looks past the immediate shareholder register and because the Supreme Court has decided how the counting is done. How that 60 percent is counted is the subject of its own article.

This is corporate work, and the sequence matters: settle the activity, then the vehicle, then the cap table. A foreign natural person may form a One Person Corporation, for instance, but only subject to the same constitutional and statutory restrictions on foreign participation, so the vehicle does not remove a restriction that attaches to the activity.