Tourist Visa Can You Invest on a Tourist Visa? (Additional Math Question)

You are thinking of leasing land/lots. Leases on land can be given to foreigners for 25 years with an option (which should be mandated in the contract) to renew for another 25 years for a total 50 years (no additional time/extension can be given through any legal method). I'm not sure if that option can be extended to a person wishing to buy your lease, though I don't know of any reason why a good lawyer wouldn't have had that written into the original lease (but did the person who signed the original lease think of that? Would the property owner take you to court and contest the legality of that transfer/contract if they didn't like the new tenant?).

Condos on the other hand: can be owned outright by foreigners, no spouses needed...so long as 60 percent of the condos in the building are owned, and continue to be owned, by Filipinos. Foreigners cannot own more than 40 percent of the units. Now, who is in charge of making sure that balance is maintained and who will be punished if a sale is made that upsets that balance? Who is going to get the shaft? Who is gong to be in court for the next decade or two fighting it out with a team of lawyers hired by a massive Filipino real estate corporation who doesn't have "refund" in their vocabulary? (Not this guy!)

This really limits the "investment" potential in condos for both foreigners and Filipino buyers IMO. If you buy thinking you can sell to some foreigner years down the road but you then find out that the condo complex is already at the max 40% foreigner ownership, well, you just got shafted.

 

You "can" but if it was ever taken to court and it was found out you created those corporations to circumvent the no foreign ownership law you would lose everything and the title would revert back to the legal owner (or whoever took you to court). The Supreme Court has stated many times that any attempt to circumvent the ownership law goes against the spirit of the law. No law has been more contested and established by case law in the Philippines than foreigners owning property. You simply CANNOT own property through dummy corporation(s). If your corporation isn't a dummy corporation that is a completely different situation. Any scheme you can think of to get around this law has been tried and shot down by the SC.

Edited for sources:
https://attorney.org.ph/legal-news/252-the-philippine-anti-dummy-law

https://lawphil.net/statutes/comacts/ca_108_1936.html
C.A. 108

In short, you and your "business partners" can go to prison (and you deported) if you are caught buying property under a dummy corporation.

 

There is something "dummy" about it. You are using a corporation to ensure your ownership and control of property. This corporation scheme always comes to the same conclusion. Let me ask: since your corporation is owned 60% by Filipinos how do you ensure that they don't come and sell it from underneath you since they have a controlling share of the corporation? The answer is usually: 1.) we manipulate the power of the shares to be in favor of the Foreigner 2.) they "sign over power of attorney rights" to the foreigner 3.) we use poor Filipinos and give them fake loans to put them in debt to the corporation and have them sign a contract that limits their ability to vote in corporate decisions

First, the share manipulation scheme: shot down by the SC. Here is the ruling: https://www.lawphil.net/judjuris/juri2015/jan2015/gr_195580_2015.html

Second, the "signing of power of attorney rights": That's not how power of attorney works. Giving someone a power of attorney does not and cannot restrict their ability to make decisions (unless you have been deemed mentally incapable of doing so by a doctor).

Third, using poor Filipinos: completely unethical behavior! If you think any contract signed under these circumstances would hold up in court you are a fool. This type of sh*t lands you in prison and gets lawyers disbarred.

Bottom line: If you are using a dummy corporation (not a legitimate corporation that is actually doing some type of legal and legitimate business) to purchase and take control of land in the Philippines you ARE breaking the law. If contested you WILL lose your land and you most likely will end up in prison and/or deported.

Sure, you will find lawyers that say this is ok do to. But the Supreme Court (the highest and most experienced lawyers in the country) say your lawyers are full of crap...and they have the final say.

That isn't what we are talking about. You can own 100% of some types of buildings, houses being the only thing I'm aware of. You can't own 100% of a condo building and I'm pretty sure you can't own 100% of commercial buildings either.

 

Here are some Filipino lawyers talking about it how corporate ownership of land works. They start by talking about the condominium act but later go on to discuss corporate ownership of land:


The key word there is "control test". Which is what I was getting at in my last post. Who actually controls the corporation (which is separate from the ownership percentage) is what the courts would look at. If you have neutered your Filipino partners restricting their ability to control the corporation then you will fail the "control test" and you will be in violation of the constitution.

 

I'm not sure what you are getting at here but: I think a sole proprietorship is an absolutely insane way to set up a business. I like to separate my personal wealth from my business wealth. I would never open a business that wasn't at least under an Limited Liability Company (LLC). If something goes wrong and you get taken to court then a plaintiff, generally, can only come after the business' assets, not your own personal assets. Though depending on how negligent you were this might not be the case. Again, I'm not really sure what you were getting at here.

Not all corporations have shares or stocks. There such a thing as a "non-stock corporation". I believe there are at least a dozen different types of ways to structure a business in the US, this is most likely also the case in the Philippines. However, when it comes to property ownership in the Philippines all that matters is who actually has control of it.

I don't know why anyone would purchase a building without owning the property it sits on. I have never heard of this happening in the Philippines. Usually any "improvements" (aka structures) you build are going to revert back to the land owner when your lease is up. If not what if the property owner decides to sell the property you building sits on? What happens to your building? What if the new owners block your right of way/access to your building? How long would you have to spend in court before the issue would be resolved? It just seems like a bad idea to me.

Again, the "control test" is what really matters when you are talking about property ownership. Please read this SEC opinion, it goes into great detail concerning a lot of different hypothetical situations concerning foreign corporation land ownership and sources many laws and rulings concerning real estate/foreign ownership:
http://www.sec.gov.ph/wp-content/uploads/2015/11/2016Opinions16-15.pdf

Condos are a completely different animal. Generally, when you buy a condo you are also buying shares in the corporation that owns the land/building. (You, generally, cannot buy a condo unit without buying shares in the condo corporation. But with everything in law, there are exceptions to this.) This is a legitimate example of foreigners using corporations to purchase real estate in the Philippines.