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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Yes. Under the Condominium Act, any foreign investor shall be allowed to lease private lands in the Philippines provided that the lease contract shall be for a period not exceeding 50 years but may be renewed once for not more than 25 years, the leased area is used solely for the purpose of investment and the leased premises comprise of such area as may reasonably be required for the purpose of the investment. (Section 4, R.A. No. 4726)
A domestic corporation is one where “at least sixty percent (60%) of the capital stock outstanding and entitled to vote,” is owned by Filipino citizens.
As explained in the recent case of Roy III v. Herbosa, mere legal title is insufficient to meet the 60 percent Filipino-owned “capital” required in the Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with 60 percent of the voting rights, is required.
Thus, those which does not fall under the definition pertains to foreign corporations.
While foreign investors, generally, cannot own lands in the Philippines, they have the option to lease private lands.
The law says –
Under the Condominium Act, any foreign investor investing in the Philippines shall be allowed to lease private lands in accordance with the laws of the Republic of the Philippines subject to the following conditions:
(1) No lease contract shall be for a period exceeding fifty (50) years, renewable once for a period of not more than twenty- five (25) years;
(2) The leased area shall be used solely for the purpose of the investment upon the mutual agreement of the parties;
(3) The leased premises shall comprise such area as may reasonably be required for the purpose of the investment subject however to the Comprehensive Agrarian Reform Law and the Local Government Code.
The leasehold right acquired under long-term lease contracts entered into pursuant to this Act may be sold, transferred, or assigned: Provided, That when the buyer, transferee, or assignee is a foreigner or a foreign-owned enterprise, the conditions and limitations in respect to the use of the leased property as provided for under this Act shall continue to apply.
SEC. 5. Limitations. –
(1) Foreign individuals, corporations, associations, or partnerships not otherwise investing in the Philippines as defined herein shall continue to be covered by Presidential Decree No. 471 and other existing laws in lease of lands to foreigners.
(2) Withdrawal of the approved investment in the Philippines within the period of the lease agreement entered into under this Act, or use of the leased area for the purpose other than that authorized, shall warrant the ipso facto termination of the lease agreement without prejudice to the right of the lessor to be compensated for the damages he may have suffered thereby.
(3) Any lease agreement under this Act which is renewable at the option of the lessee subject to the same terms and conditions of the original contract shall be interpreted to mean as renewable upon the mutual agreement of the parties.
(4) In addition to the conditions for the renewal of a lease agreement after the period of fifty (50) years as provided herein, the foreign lease shall show that it has made social and economic contributions to the country.
(5) In the case of tourism projects, lease of private lands by foreign investors qualified herein shall be limited to projects with an investment of not less than five million (5M) US dollars, seventy percent (70%) of which shall be infused in said project within three years from the signing of the lease contract.
Source: Section 1, Republic Act No. 4726
Read also: Can foreigners own real property in the Philippines?
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