Are you planning to incorporate in the Philippines and wondering whether you can own the company outright? The answer depends on your business activity, and the Foreign Investment Negative List (FINL) is where you find it.
The FINL works by exception. If your activity does not appear on it, foreign investors can hold 100% of the equity. If it does appear, you are either capped at a percentage or excluded entirely, and you will need a Filipino partner or a different structure.
This guide will walk you through the FINL framework in the Philippines. We will outline which sectors are open, conditional, and restricted to foreigners.
How the Foreign Investment Negative List Works
The FINL is the regulatory instrument that sets out which sectors in the Philippines restrict foreign equity. It divides those restrictions into two lists.
- List A (Constitutional and Statutory Restrictions): sectors where foreign equity is limited directly by the
- List B (Security, Public Health, and Micro-Enterprise Protections): sectors regulated by executive decree under the
The President is required to update the list every two years under the Foreign Investments Act of 1991, as amended by RA 11647. But only List B can be amended that way. List A restrictions require constitutional or legislative change.
The current version is Executive Order No. 113, series of 2026 (the 13th Regular FINL) currently enforces the active list as of 2026. President Marcos signed it on 13 April 2026 and it took effect on 2 May, replacing the 12th list issued in 2022.
Here are key provisions you should know about this update:
- Telecommunications opened to 100% foreign ownership, up from 40%, subject to reciprocity. You can hold the full equity where your home country allows Filipinos to do the same.
- Solar, wind, and ocean or tidal energy projects can now be wholly foreign-owned. Large hydropower and geothermal remain capped at 40%, since those involve natural resource utilisation and the limit is constitutional.
- Retail enterprises below the full-ownership capital threshold now permit up to 40% foreign equity, where they were previously closed.
The order also consolidates liberalisation already enacted elsewhere, particularly under the amended Public Service Act and the Retail Trade Liberalization Act.
Sectors that Allow 100% Foreign Ownership
If your proposed commercial activity does not appear on List A or List B of FINL, you are allowed 100% foreign equity of your company. This means, you can set up your legal entity in the Philippines without a local partner.
Majority of sectors open to foreigners in the Philippines are export-oriented, technological, and infrastructure sectors:
| Business Sector | PSIC Revision 5 Code / Group | What It Covers |
|---|---|---|
| BPO & Shared Services | 8220 (Call Centers) / 6209 (IT Support) | Call centers, IT helpdesks, back-office administration, and corporate shared services. |
| Software & IT Development | 6219 (Computer Programming Activities) | Custom programming, mobile app development, SaaS tools, and cloud infrastructure. |
| Export Manufacturing & Services | 1010–3320 (Manufacturing Divisions) | Physical assembly plants, export manufacturing, and offshore digital services. |
| Telecommunications & Internet | 6110 / 6120 (Telecommunications) | Broadband providers, cellular networks, satellite systems, and fiber infrastructure. |
| Renewable Energy Generation | 3512 (Renewable Electric Power Gen) | Solar, wind, hydro, ocean, and geothermal power generation facilities. |
| Large-Scale Retail Enterprises | 4719 (Other Non-Specialized Retail) | Flagship retail stores, luxury retail chains, and commercial e-commerce platforms. |
If you are unsure what sectors are open to foreigners, you can reach out to Emerhub’s compliance experts for a detailed breakdown.
Sectors that are Completely Restricted for Foreigners
In protected industries, foreign capital participation is prohibited under List A. These areas are strictly for Filipinos only (100% Filipino-owned with 0% foreign equity).
| Protected Sector / Business Activity | PSIC Revision 5 Code / Group | Allowed Foreign Equity |
|---|---|---|
| Mass Media Operations | 6010 / 6020 (Broadcasting Activities) | 0% (Fully Banned) |
| Corporate Architecture Practice | 7110 (Architectural Consulting) | 0% (Fully Banned) |
| Corporate Practice of Regulated Professions | 6910 (Legal) / 6920 (Accounting) | 0% (Fully Banned) |
| Small-Scale Mining | 0729 (Other Non-Ferrous Ore Mining) | 0% (Fully Banned) |
| Cooperative Enterprises | 6413 (Credit Cooperatives) | 0% (Fully Banned) |
| Private Security Agencies | 8011 (Private Security Activities) | 0% (Fully Banned) |
Which Sectors Allow Partial Foreign Ownership?
If your proposed business model falls under a partially restricted category on either List A or List B, you cannot establish a wholly foreign-owned corporation. Instead, you must structure your venture as a joint-venture corporation with local Filipino partners.
In most cases, this setup requires forming a classic 60/40 domestic corporation. This set up is where Philippine citizens or 100% Filipino-owned entities hold at least 60% of the voting equity.
| Sector / Business Activity | PSIC Revision 5 Code / Group | Allowed Foreign Equity | FINL Category |
|---|---|---|---|
| Private Land Ownership | 6810 / 6820 (Real Estate Activities) | Up to 40% | List A |
| Natural Resources Exploration & Use | 0710–0729 (Mining of Ores) | Up to 40% | List A |
| Educational Institutions | 8511–8530 (Higher & Technical Education) | Up to 40% | List A |
| Public Works & Defense Construction | 4210–4290 (Civil Engineering Construction) | Up to 40% | List A |
| Defense & Military Supply Manufacturing | 2520 (Weapons & Ammunition Mfg) | Up to 40% | List B |
| Public Health & Morals Establishments | 9200 (Gambling) / 9623 (Sauna & Spa) | Up to 40% | List B |
| Retail Trade | 471 - 479 (except Motor Vehicles and Motorcycles) | Up to 40% | List B |
| Commercial Deep-Sea Fishing | 0311 (Marine Fishing) | Up to 40% | List A |
| Private Advertising Agencies | 7310 (Advertising Activities) | Up to 30% | List A |
| Private Local Recruitment Agencies | 7810 (Employment Placement Agencies) | Up to 25% | List A |
How to Attain 100% Foreign Ownership in Restricted or Conditional Sectors
Landing on List B, or under the flat ban on small retail, does not automatically mean you need a Filipino partner. Philippine law sets out precise thresholds, certifications, and business models that let you bypass the standard equity caps and secure full 100% foreign equity.
Keep in mind that not all sectors follow the same rules. To make sure you remain compliant with foreign equity laws, it's better to consult with our compliance experts in the Philippines.
Investing in Large-Scale Retail
Under the Amended Retail Trade Liberalization Act (RA 11595), you can bypass restrictions on retail trade if you operate at a scale. This covers supermarkets, department stores, hypermarkets, and digital or internet-based retail models. As long as your enterprise satisfies the PHP 25 million entity-level paid-up capital floor, plus a PHP 10 million minimum investment for each additional physical store.
We cover the full registration process in our guide to setting up a wholesale or retail trade company in the Philippines. We talked in detail about the requirements, legal framework, and wholesale vs retail distinction.
Meeting Capital Thresholds as a DME or EME
Under List B of the FINL, foreign businesses under “Small and Domestic Market Enterprises” with less than USD 200,000 capital investments are restricted to 40% equity caps. To hold 100% equity as a foreigner in these sectors, you need to meet and exceed the USD 200,000 threshold.
Under Section 8 of the FIA, You can cut these capital requirements in half under (to USD 100,000) and still keep 100% foreign equity if you meet the following conditions:
- Employ at least 15 direct Filipino workers. Applicable to fields such as office support activities (PSIC 82110) or light manufacturing (Divisions 10–33).
- Use advanced technology certified by the Department of Science and Technology (DOST). Applicable to fields such as software publishing (PSIC 62010) or research and development (PSIC 72101).
- Get endorsed as a startup or startup enabler under the Innovative Startup Act (RA 11337). Applicable to fields such as specialized fintech platforms (PSIC 62010).
We have a detailed guide on how to reduce minimum capital requirements in the Philippines. In this article, we walk through the documentary requirements for each pathway and how to line up the right certification before you file.
| Starting an Export Market Enterprise (EME): If your business exports 60% of your products and services to overseas clients, you are exempt from the standard USD 200,000 capital. You can learn more about capital requirements for EMEs in our article about Export Market Enterprise (EME) in the Philippines. |
|---|
Are you planning to incorporate in the Philippines and wondering whether you can own the company outright? The answer depends on your business activity, and the Foreign Investment Negative List (FINL) is where you find it.
The FINL works by exception. If your activity does not appear on it, foreign investors can hold 100% of the equity. If it does appear, you are either capped at a percentage or excluded entirely, and you will need a Filipino partner or a different structure.
This guide will walk you through the FINL framework in the Philippines. We will outline which sectors are open, conditional, and restricted to foreigners.
How the Foreign Investment Negative List Works
The FINL is the regulatory instrument that sets out which sectors in the Philippines restrict foreign equity. It divides those restrictions into two lists.
- List A (Constitutional and Statutory Restrictions): sectors where foreign equity is limited directly by the
- List B (Security, Public Health, and Micro-Enterprise Protections): sectors regulated by executive decree under the
The President is required to update the list every two years under the Foreign Investments Act of 1991, as amended by RA 11647. But only List B can be amended that way. List A restrictions require constitutional or legislative change.
The current version is Executive Order No. 113, series of 2026 (the 13th Regular FINL) currently enforces the active list as of 2026. President Marcos signed it on 13 April 2026 and it took effect on 2 May, replacing the 12th list issued in 2022.
Here are key provisions you should know about this update:
- Telecommunications opened to 100% foreign ownership, up from 40%, subject to reciprocity. You can hold the full equity where your home country allows Filipinos to do the same.
- Solar, wind, and ocean or tidal energy projects can now be wholly foreign-owned. Large hydropower and geothermal remain capped at 40%, since those involve natural resource utilisation and the limit is constitutional.
- Retail enterprises below the full-ownership capital threshold now permit up to 40% foreign equity, where they were previously closed.
The order also consolidates liberalisation already enacted elsewhere, particularly under the amended Public Service Act and the Retail Trade Liberalization Act.
Sectors that Allow 100% Foreign Ownership
If your proposed commercial activity does not appear on List A or List B of FINL, you are allowed 100% foreign equity of your company. This means, you can set up your legal entity in the Philippines without a local partner.
Majority of sectors open to foreigners in the Philippines are export-oriented, technological, and infrastructure sectors:
| Business Sector | PSIC Revision 5 Code / Group | What It Covers |
|---|---|---|
| BPO & Shared Services | 8220 (Call Centers) / 6209 (IT Support) | Call centers, IT helpdesks, back-office administration, and corporate shared services. |
| Software & IT Development | 6219 (Computer Programming Activities) | Custom programming, mobile app development, SaaS tools, and cloud infrastructure. |
| Export Manufacturing & Services | 1010–3320 (Manufacturing Divisions) | Physical assembly plants, export manufacturing, and offshore digital services. |
| Telecommunications & Internet | 6110 / 6120 (Telecommunications) | Broadband providers, cellular networks, satellite systems, and fiber infrastructure. |
| Renewable Energy Generation | 3512 (Renewable Electric Power Gen) | Solar, wind, hydro, ocean, and geothermal power generation facilities. |
| Large-Scale Retail Enterprises | 4719 (Other Non-Specialized Retail) | Flagship retail stores, luxury retail chains, and commercial e-commerce platforms. |
If you are unsure what sectors are open to foreigners, you can reach out to Emerhub’s compliance experts for a detailed breakdown.
Sectors that are Completely Restricted for Foreigners
In protected industries, foreign capital participation is prohibited under List A. These areas are strictly for Filipinos only (100% Filipino-owned with 0% foreign equity).
| Protected Sector / Business Activity | PSIC Revision 5 Code / Group | Allowed Foreign Equity |
|---|---|---|
| Mass Media Operations | 6010 / 6020 (Broadcasting Activities) | 0% (Fully Banned) |
| Corporate Architecture Practice | 7110 (Architectural Consulting) | 0% (Fully Banned) |
| Corporate Practice of Regulated Professions | 6910 (Legal) / 6920 (Accounting) | 0% (Fully Banned) |
| Small-Scale Mining | 0729 (Other Non-Ferrous Ore Mining) | 0% (Fully Banned) |
| Cooperative Enterprises | 6413 (Credit Cooperatives) | 0% (Fully Banned) |
| Private Security Agencies | 8011 (Private Security Activities) | 0% (Fully Banned) |
Which Sectors Allow Partial Foreign Ownership?
If your proposed business model falls under a partially restricted category on either List A or List B, you cannot establish a wholly foreign-owned corporation. Instead, you must structure your venture as a joint-venture corporation with local Filipino partners.
In most cases, this setup requires forming a classic 60/40 domestic corporation. This set up is where Philippine citizens or 100% Filipino-owned entities hold at least 60% of the voting equity.
| Sector / Business Activity | PSIC Revision 5 Code / Group | Allowed Foreign Equity | FINL Category |
|---|---|---|---|
| Private Land Ownership | 6810 / 6820 (Real Estate Activities) | Up to 40% | List A |
| Natural Resources Exploration & Use | 0710–0729 (Mining of Ores) | Up to 40% | List A |
| Educational Institutions | 8511–8530 (Higher & Technical Education) | Up to 40% | List A |
| Public Works & Defense Construction | 4210–4290 (Civil Engineering Construction) | Up to 40% | List A |
| Defense & Military Supply Manufacturing | 2520 (Weapons & Ammunition Mfg) | Up to 40% | List B |
| Public Health & Morals Establishments | 9200 (Gambling) / 9623 (Sauna & Spa) | Up to 40% | List B |
| Retail Trade | 471 - 479 (except Motor Vehicles and Motorcycles) | Up to 40% | List B |
| Commercial Deep-Sea Fishing | 0311 (Marine Fishing) | Up to 40% | List A |
| Private Advertising Agencies | 7310 (Advertising Activities) | Up to 30% | List A |
| Private Local Recruitment Agencies | 7810 (Employment Placement Agencies) | Up to 25% | List A |
How to Attain 100% Foreign Ownership in Restricted or Conditional Sectors
Landing on List B, or under the flat ban on small retail, does not automatically mean you need a Filipino partner. Philippine law sets out precise thresholds, certifications, and business models that let you bypass the standard equity caps and secure full 100% foreign equity.
Keep in mind that not all sectors follow the same rules. To make sure you remain compliant with foreign equity laws, it's better to consult with our compliance experts in the Philippines.
Investing in Large-Scale Retail
Under the Amended Retail Trade Liberalization Act (RA 11595), you can bypass restrictions on retail trade if you operate at a scale. This covers supermarkets, department stores, hypermarkets, and digital or internet-based retail models. As long as your enterprise satisfies the PHP 25 million entity-level paid-up capital floor, plus a PHP 10 million minimum investment for each additional physical store.
We cover the full registration process in our guide to setting up a wholesale or retail trade company in the Philippines. We talked in detail about the requirements, legal framework, and wholesale vs retail distinction.
Meeting Capital Thresholds as a DME or EME
Under List B of the FINL, foreign businesses under “Small and Domestic Market Enterprises” with less than USD 200,000 capital investments are restricted to 40% equity caps. To hold 100% equity as a foreigner in these sectors, you need to meet and exceed the USD 200,000 threshold.
Under Section 8 of the FIA, You can cut these capital requirements in half under (to USD 100,000) and still keep 100% foreign equity if you meet the following conditions:
- Employ at least 15 direct Filipino workers. Applicable to fields such as office support activities (PSIC 82110) or light manufacturing (Divisions 10–33).
- Use advanced technology certified by the Department of Science and Technology (DOST). Applicable to fields such as software publishing (PSIC 62010) or research and development (PSIC 72101).
- Get endorsed as a startup or startup enabler under the Innovative Startup Act (RA 11337). Applicable to fields such as specialized fintech platforms (PSIC 62010).
We have a detailed guide on how to reduce minimum capital requirements in the Philippines. In this article, we walk through the documentary requirements for each pathway and how to line up the right certification before you file.
Starting an Export Market Enterprise (EME): If your business exports 60% of your products and services to overseas clients, you are exempt from the standard USD 200,000 capital. You can learn more about capital requirements for EMEs in our article about Export Market Enterprise (EME) in the Philippines.
Securing Land Control
Foreign nationals still cannot own private land, capped at 0% under the Constitution. That said, Republic Act No. 12252 (signed on September 3, 2025) now lets registered foreign investors secure long-term control over a project site through a single lease of up to 99 years, with no renewal process required. This replaces the older Investors' Lease Act (RA 7652), which had capped foreign land leases at 50 years plus a single 25-year renewal.
We cover eligibility, permitted project types, and the investment floor for tourism projects in our full guide to the 99-year lease law under RA 12252.
Nominee Structures and the Anti-Dummy Law
To bypass these equity caps, some investors use nominee structures. Under this setup, a local partner holds 60% of shares on paper. However, the foreign investor retains true operational control.
Unfortunately, we strictly advise against these structures since it carries severe legal risk. If the business goes bankrupt or the relationship between you or your local partner turns sour, it can be difficult to determine the true owner of the company
The Anti-Dummy Law (Commonwealth Act No. 108), criminalizes the use of a Filipino citizen's name to let a foreigner control a business field that the law reserves to Filipinos. Philippine courts look at real control and not just the documentation of your arrangement.
In our article about the Anti-Dummy Law in the Philippines, we broke down all common forms of “dummying” and how the law is enforced.
Establishing Your Business in the Philippines with Emerhub
To help you establish your own company and navigate through foreign restrictions, we can help you through the SEC registration process. Our local compliance specialists can guide you through the following:
- PSIC & FINL Pre-Audit: Reviewing your planned business activities to identify the optimal PSIC classification and confirm 100% foreign ownership eligibility.
- SEC Company Incorporation: Drafting Articles of Incorporation, managing eSPARC portal filings, and securing your Certificate of Registration.
- Capital & Bank Account Setup: Assisting with corporate bank account opening, foreign capital injections, and Treasurer's Affidavit verification.
- Post-Incorporation Compliance: Securing local Mayor’s Permits, BIR tax registration, PEZA/
Talk to our compliance experts about how you can establish your company in the Philippines as a foreigner.
Frequently asked questions
Can I use a holding company structure to increase control beyond 40%?
Layered ownership structures must still comply with the FINL. The SEC looks through corporate layers to determine ultimate foreign ownership. A Filipino company that's 60% owned by another company that's 100% foreign-owned would be considered 60% foreign-owned. Creative structuring can optimize control within limits but cannot circumvent ownership restrictions.
What happens if regulations change after I've invested?
Generally, grandfather provisions protect existing investments when restrictions tighten. However, expansions or modifications might fall under new rules. When liberalization occurs, you can usually restructure to take advantage without penalty. Document your structure carefully to prove compliance with rules at the time of investment.
Can I maintain control through debt rather than equity?
Debt financing from foreign sources is generally unrestricted and doesn't count toward ownership. However, debt that's convertible to equity or includes equity-like features may be scrutinized. Excessive debt from foreign shareholders might be viewed as circumventing ownership limits, especially if repayment terms are unrealistic.
How do franchise agreements work in restricted industries?
Foreign franchisors can operate in the Philippines through local franchisees without triggering FINL restrictions. The franchise model allows brand expansion and revenue generation through franchise fees and royalties, while the local franchisee handles operations. This works particularly well in retail and food service.
Are there different rules for ASEAN investors?
Currently, ASEAN investors face the same FINL restrictions as other foreigners despite economic integration agreements. Some bilateral agreements provide specific exceptions, but broad ASEAN preferences haven't materialized. Check specific trade agreements between your country and the Philippines for potential advantages.
Can a foreigner start a business in the Philippines without a local partner?
If your business activity falls under an unrestricted sector (such as BPO, software development, IT support, export manufacturing, or renewable energy), you can establish a 100% foreign-owned corporation without taking on a local Filipino partner.
What happens if I choose the wrong PSIC code during SEC registration?
Selecting an incorrect PSIC code can cause registration rejections or force unexpected foreign ownership caps. If your chosen code maps to a restricted industry on the FINL, the SEC will pause your filings until you adjust your primary purpose or change your ownership structure. You can amend misclassifications post-incorporation by filing amended Articles of Incorporation with the SEC.
Can I change my primary PSIC code after my company is registered?
If your business model pivots or you need to correct an initial misclassification, you can amend your Articles of Incorporation with the SEC. This process requires board approval, a formal filing with the SEC, and an update to your local government permits.
What is the difference between List A and List B in the FINL?
List A details foreign equity caps mandated directly by the Philippine Constitution and national statutes (such as land ownership, mass media, and licensed professions). List B outlines foreign equity caps set by executive decree to safeguard national security, public health, and local micro-enterprises (such as defense items, gambling, and small local market businesses).
Can a 100% foreign-owned company lease land in the Philippines?
While 100% foreign-owned entities cannot purchase or own private land, they can execute long-term land leases under Republic Act No. 12252 (signed Sept 3, 2025). This allows foreign entities to lease private land for up to 99 years.