Updated Foreign Investment Negative List Is Now in Effect — What It Means for Your Business
RVTLC Law | Corporate & Commercial | April 2026
On April 13, 2026, President Ferdinand R. Marcos, Jr. signed Executive Order No. 113, promulgating the Thirteenth (13th) Regular Foreign Investment Negative List (RFINL). The Order took effect fifteen days after its publication in the Official Gazette or in a newspaper of general circulation.
The RFINL is the definitive reference for determining which investment areas and activities are open to foreign investors — and which remain reserved, in whole or in part, for Philippine nationals. If you are a foreign investor, a Philippine corporation with foreign shareholders, or a business owner structuring an investment involving foreign participation, understanding the current list is not optional. It is a compliance requirement.
Here is what the 13th RFINL says — in plain language.
What Is the RFINL and Why Does It Matter?
Under the Foreign Investments Act of 1991 (Republic Act No. 7042, as amended by RA 8179 and RA 11647), the President is required to maintain a Regular Foreign Investment Negative List — a list of investment areas where foreign equity participation is either prohibited or limited. Any activity not on the list is presumptively open to 100% foreign ownership.
The list is divided into two parts. List A covers activities where foreign ownership is restricted by the Constitution or by specific laws. List B covers activities restricted for reasons of security, defense, public health, morals, or protection of small and medium enterprises.
List A: Constitutionally and Legally Restricted
Zero foreign equity — fully reserved for Philippine nationals:
Mass media (except recording), corporate practice of architecture, cooperatives, private security agencies, small-scale mining, marine resource utilization in Philippine waters, cockpit ownership and operation, and the manufacture or distribution of nuclear, biological, chemical, or radiological weapons.
Up to 25% foreign equity:
Private recruitment agencies (local and overseas) and contracts for the construction of defense-related structures.
Up to 30% foreign equity:
Advertising.
Up to 40% foreign equity:
This is the most commercially significant tier. It covers retail trade enterprises with paid-up capital below ₱25 million, exploration and development of natural resources (with noted exceptions for renewable energy and Presidential agreements), ownership of private lands, operation of public utilities as defined under RA 11659, educational institutions (other than those established by religious groups or foreign diplomatic personnel), rice and corn industry activities, government procurement of goods and consulting services, commercial fishing vessel operation, and ownership of condominium units.
Up to 100% foreign equity:
Telecommunications operations — provided that the foreign investor's home country accords reciprocity to Philippine nationals. In the absence of reciprocity, the cap is 50%.
List B: Restricted for Security, Defense, Health, Morals, and SME Protection
Up to 40% foreign equity:
The manufacture, repair, storage, and distribution of firearms, ammunition, gunpowder, dynamite, explosives, and their ingredients (subject to PNP clearance); military materiel; dangerous drugs; sauna and massage establishments regulated for public health and morals; all forms of gambling (except those covered by PAGCOR investment agreements); and micro and small domestic market enterprises with paid-in equity capital below the equivalent of US$200,000.
Qualified exception for tech startups:
Micro and small enterprises involved in advanced technology, endorsed as startups by DTI, DICT, or DOST under RA 11337 (the Innovative Startup Act), or those with a majority of Filipino direct employees (not fewer than 15), may qualify under a lower threshold of US$100,000.
Key Practical Takeaways for Businesses
For foreign investors entering the Philippines: The 13th RFINL confirms that most areas of the economy remain open to 100% foreign ownership. The negative list is the exception, not the rule. If your intended activity is not on the list, full foreign ownership is permissible.
For retail trade: Foreign-owned retail enterprises with paid-up capital of at least ₱25 million (and meeting the RA 11595 conditions) are not on the negative list and may operate with full foreign equity.
For real estate: The 40% cap on private land ownership remains. Foreign investors should continue to structure land-related transactions carefully — condominium units remain available to foreign purchasers subject to the 40% cap under the Condominium Act.
For public utilities: The definition of "public utility" has been narrowed under RA 11659 to electricity distribution and transmission, petroleum pipeline systems, water pipeline and wastewater systems, seaports, and public utility vehicles. Telecommunications, domestic shipping, domestic airways, expressways, and similar activities are now classified as public services — not public utilities — and are no longer subject to the 40% cap under this list.
For micro and small enterprises: The US$200,000 threshold remains a significant protection for Filipino-owned SMEs. Foreign investors structuring micro or small businesses should ensure their paid-in capital meets or exceeds this threshold, or qualify under the startup exemption.
RVTLC Practice Note
EO 113 was signed on April 13, 2026 and is now in force. If you are currently structuring a foreign investment, reviewing your corporate equity composition, or advising foreign clients on Philippine market entry, your analysis must now be based on the 13th RFINL rather than the 12th.
RVTLC advises both Philippine companies with foreign shareholders and foreign investors entering the Philippine market across all the practice areas affected by the RFINL — corporate structuring, foreign equity compliance, retail trade, real estate, energy, telecommunications, and government procurement.
If you have questions about how the 13th RFINL affects your specific business or investment, contact us at admin@rvtlc-law.com or visit www.rvtlc-law.com.
Full text of Executive Order No. 113 is available at the Official Gazette: www.officialgazette.gov.ph
RVTLC & Associates Law Firm9/F Filinvest One Building, Northgate, Alabang, Muntinlupa City admin@rvtlc-law.com | www.rvtlc-law.com
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