We had a quick chat with our founder, John Riad, whose knowledge about Manila real estate is driven by years and years of practice. It’s clear that the ROI a potential investor would glean from commercial real estate is much higher than what one would obtain through playing the residential market. But the biggest question facing investors is–can you purchase commercial space?
LAND PURCHASE
If you seek to purchase an office building, technically you would be buying the land that the office building will be on. The building is classified as an improvement of the land.
Let’s say an American businessman wants to purchase a building. He would first purchase the land, then work to erect the building. This could only be done through a corporation, which is 60% Filipino owned. Thereafter, all of the units that he wishes to lease out to corporations or companies would have to follow the same 60% foreigner, 40% Filipino ratio.
Technically speaking, the American fellow does not own the land.
This is the case for houses as well. If the American gentleman were married to a Filipina, he would purchase the house in her name.
The loophole is that foreigners can lease land for 50 years–with the option to renew. The gentleman wouldn’t own Philippine land–but it would be considered his, as a lessor, for 50 years.
Here are the subsequent Republic Acts: https://www.lawphil.net/statutes/repacts/ra1966/ra_4726_1966.html
https://www.officialgazette.gov.ph/1993/06/04/republic-act-no-7652/
This covers ownership of condominiums as well as entire condominium (or office) buildings.
