Foreigners can now lease land in the Philippines for up to 99 years
MANILA, Philippines — Foreign investors seeking to do business in the Philippines can now lease land for up to a century.
In a new law signed by President Ferdinand Marcos Jr., foreign investors can now lease land for up to 99 years — an additional 49 years from what the law previously allowed.
“The aggregate period of the lease contract shall not exceed 99 years; provided that upon the recommendation of the Fiscal Incentives Review Board (FIRB) or other relevant government agencies, the President of the Philippines may impose a shorter lease period for investors engaged in vital services or industries considered as critical infrastructure,” the Republic Act 12252 stated.
The new law amends the Investors' Lease Act, extending the time that a foreign investor may lease land. Shorter leases may also be granted in the interest of national security or other purposes.
The amendment outlines the requirements foreign investors must meet when entering a lease contract, including an approved investment project under the Foreign Investments Act of 1991, a technical description of the property and other necessary documents.
The lease contract can be terminated if the foreign investor fails to commence with their intended investment project within three years of signing the contract.
The law does not appear to specify the exact maximum duration for which a foreign investor can extend their lease, nor how many times the lease can be renewed.
Philstar.com has sought clarification from the Palace and will update the story upon receiving a response.
For foreigners who are leasing land in the Philippines without making an investment, the prevailing rules under Presidential Decree 471 will apply, which limits lease terms for aliens to a maximum of 25 years.
Contracts that violate this law may be subject to penalties ranging from a fine of P1 million to P10 million or imprisonment from six months to six years, depending on the court's decision.
Under the 1987 Constitution, foreigners are prohibited from owning land in the Philippines. Only Filipinos or corporations at least 60% owned by Filipinos are permitted to own land.
Leasing land has been allowed as an alternative, but the lease term is limited to 50 years, with a one-time renewal option for an additional 25 years.
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