Tourist Visa Best Posts in Thread: Can You Invest on a Tourist Visa? (Additional Math Question)

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.

 

Nope. I already provided those for what you are saying. Just curious how you keep the Filipinos from selling the land out from under you? Just keep your fingers crossed and hope for the best?

Philippine inflation is around 3-4% right now and there is more to look at than just inflation for expats. The exchange rate also needs to be factored in since the majority of my wealth and investments are, and will remain, in the US. And I'll be honest, how all of it ties together seems quite complicated and above my current understanding.

I'm not looking to get rich through these investments. However, a condo certainly won't make you rich and is a lot harder to get rid of than stocks.

I'm looking at the quality of every large building I've seen in the Philippines. They all seem to fall into a state of disrepair very quickly, unless they are managed by a huge corporation (not condo corporations). You can ask a ton of money for a turd sandwich but eventually the word is going to get around that it tastes like sh*t and it's going to be rather hard to find buyers.

Talk about comparing apples and oranges. Areas like Makati do not come close to representing the vast majority of the Philippines.

I think you are overestimating the wealth of the middle class in the Philippines and SWA and just how much poverty there is in the Philippines. The "middle class" just doesn't earn enough to be buying up these condos.


https://psa.gov.ph/sites/default/files/FIES 2015 Final Report.pdf?utm_source=DI&utm_medium=referral
When 40-60% of your income is spent on food you just can't afford to be buying up property. (By comparison, the middle class in the US spends around 13% of their income of food.)

The top 1% of Filipino families (that is about 174,000 families) earn about P122k/month. That's around P1.5M per year. It would take the top 1% 30+ years to pay off a P5M condo if they maintained their current level of expenditures, and if they could find a good interest rate. It is just out of the reach for middle class Filipinos.

If the middle class is taking out irresponsible loans (and if banks are willing to give them out...and they seem to be), well, we saw what happened to the housing market in the US back in 2008 and what is still happening with the younger generation who just can't afford to buy houses anymore. Looking at the property prices, I don't see how it can't be a bubble.

I'm no expert on the subject, but I just don't see how the prices can continue to go through the roof when there is nobody that can afford to buy the property. I think a lot of places, especially in Dumaguete and other areas with lots of expats, is going to be in for a rude awakening when all the Baby Boomers die off. The flow of expat retirement/life savings money is going to slow significantly.

 

Spoiler: Way to long!

The devil is in the details. Real estate cases are always unique. The details are all that really matters in these cases. There are a million "what if" scenarios you could come up with but I have already stated many times what really matters.

No, I am focusing on the land/lot/real estate ownership. Condos are different from other real estate. The Philippines passed a law that specifically outlines who can and cannot purchase a condo. Search Republic Act 4726:

I don't know why you are focusing so much on foreigners owning condos. The law is extremely clear on what foreigners can own when it comes to condos.

No it isn't. Who has control over the property what matters. In the opinion from the SEC I sourced it went into charities and religious organizations that don't sell anything. Money makes no difference. Filipino having a legitimate 60% control over the land is the ONLY thing that matters. If you can't pass the control test your corporation/LLC/sole proprietorship/church/charity/contract/gang-bang/whatever-you-want to call it is not allowed to own land.

If you think nobody is going to care until money is involved...well, what do you think property is worth? If someone thinks they have a claim to it they are going to contest your dummy-corporation, they are going to win and you are going to lose the property...and if you were found to have created your business entity in bad faith you will go to jail.

Condos are almost always put under a condo corporation and the control over the corporation is almost always linked unit ownership. Foreigners could not own more than 40% of the condos in a building because that would give the foreigners (collectively) more than a 40% say over the property.

No condo corporation is going to build a condo complex on leased land. The corporation will own the lot it sits on. Whatever loophole or hypothetical you are trying to get at here would just never happen in reality, or is completely lost to me. It sounds like whatever you are trying to describe is not actually a condo. The word "Condominium" seems to be a legal term for a very specific type of building with ownership that needs to be structured in a very specific legal way. If it falls out of that legal definition it is no longer a condo by definition.

The Condominium Law also gives the exact definition of a condo:

I interpret that as the building and land must come as a package deal...so foreigners could not own 100% of the condos...since a "condo" includes the land it sites on.

His example was a very specific example: that example was for purchasing a lot under a dummy organization so you can "control" the lot and build a house. His example had nothing to do with condos. It was a very clearly the bad legal advice that many foreigners are told by sh*tty lawyers (or by their drinking buddies at the bar).

I don't even know WTF we are talking about anymore. So here are some facts:

1. Foreigners cannot own more than 40% of condo units. Source: Republic Act 4726
2. Foreigners cannot own and land. Source: Article XII, Section 8, of the Philippine Constitution
3. Foreigners cannot create dummy corporations to purchase land. Source: CA 108 and G.R. No. 195580
4. Foreigners cannot buy land under a corporation that allows them 100% ownership on the negatives list. Source: G.R. No. 195580
5. Foreigners can lease land for 25+25 years either as an individual or through a corporation owned either partly or in whole by the foreigner. Source: Presidential Decree 471
6. Foreigners can be a part of a corporation that owns property so long as Filipinos actually and in good faith CONTROL 60% of the corporation. Source: G.R. No. 195580

Here is a legal opinion from the SEC agreeing with every single "fact" I mention above: http://www.sec.gov.ph/wp-content/up...ns16-15.pdf?utm_source=DI&utm_medium=referral

Everyone is just throwing a bunch of hearsay and un-sourced/unrealistic hypothetical nonsense. Provide some sources showing where someone has proven any of my "facts" above incorrect. I will not waste any more time on replies without a source.

 

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.