Can a foreigner purchase a property in the Philippines?
Purchasing a property in the Philippines is one of the most common issues faced by foreigners who are interested in owning or buying a property in our country. Most of them are a bit shocked especially the Americans and the Europeans because from their country everyone who has the means to purchase a land or a real estate property are allowed to so. In the Philippines real estate ownership are only confined to the Filipino citizens, corporations with at least 60% Filipino interest, and Dual Citizens or Former Filipinos with some limitations.
In special cases foreigners are allowed to own a land in our country under the following circumstances:
1. The land acquisition is before the 1935 Constitution took effect.
2. Through the hereditary acquisition. The foreigner must be a legal or natural heir.
Most practice done by the foreigner is to marry a Filipino citizen thus the spouse will have the title of the property under his/her name. In the death of the Filipino spouse the foreigner can sell the property and get the proceeds, give the ownership to their children or lastly if they have no heirs he/she can just give it to the relatives of the Filipino spouse.
There is also an alternative way of using the foreign entity corporation ownership. In this way, to be able to purchase a land they should form a corporation consisting of at least 5 incorporators where the foreigner is included. It should also be a 60% and 40% distribution where the 60% must be owned by the Filipinos and the remaining 40% can be owned by the foreigner. The best example for this is the condominium ownership where the foreigner can buy a unit in a condominium thus it should not exceed the 40% interest of a condominium corporation. In this case the foreigners are allowed to purchase basically because the condo is owned by a corporation and the unit owners becomes the stockholders of the said property.
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