🇵🇭 The Philippines · reviewed 2026-10-09
Can foreigners own a business or franchise in the Philippines?
A foreign franchisor can license a Philippine company without owning anything. Owning the stores is different: food service and retail fall under the Retail Trade Liberalization Act, which allows full foreign ownership but sets a capital floor that most small brands will not meet.
Retail trade: the rule that usually applies
- RA 11595, signed on 10 December 2021, requires a foreign retailer to have minimum paid-up capital of PHP 25 million. A foreign retailer running more than one physical store must invest at least PHP 10 million per store. The retailer's home country must not bar Filipino retailers. Official · RA 11595, Lawphil, 2021-12-10
- Retail trade is defined as habitually selling goods for consumption directly to the public. The law excludes only restaurants run by a hotel owner or innkeeper as part of the hotel business, so a stand-alone restaurant is generally treated as retail trade. No ruling says so expressly; confirm with Philippine counsel. Official · RA 8762 s.3, Lawphil, 2000-03-07
The negative list and the Foreign Investments Act
- The current Regular Foreign Investment Negative List is the 13th, issued by Executive Order 113, signed 13 April 2026 and effective 2 May 2026. It replaced the 12th list of 2022. Retail trade remains open to full foreign ownership, subject to RA 11595. Official · Executive Order 113 (2026), Lawphil, 2026-04-13Secondary · Cruz Marcelo & Tenefrancia on the 13th Negative List, 2026-04-17
- Under the Foreign Investments Act as amended by RA 11647 (2022), domestic-market enterprises with paid-in equity below USD 200,000 are reserved to Filipinos. The threshold falls to USD 100,000 for enterprises using advanced technology as determined by DOST, endorsed startups, or those whose direct employees are majority Filipino with at least 15 Filipino employees. Official · RA 11647, Lawphil, 2022-03-02
Structures franchisors use
- Master or unit franchise to a Filipino-owned company: no foreign capital floor applies, because the franchisor owns no shares.
- Joint venture with a Filipino majority partner: whether the operating company counts as a 'foreign retailer' depends on its foreign shareholding under RA 11595's implementing rules, so confirm the line with counsel before setting the cap table.
- Wholly or majority foreign-owned operator: only when the PHP 25M capital and per-store investment fit the roll-out plan.
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