How to Buy a New Property as Foreigner

How to buy a Property as a Foreigner? Who can buy property in the Philippines?

As a foreigner you have the opportunity to buy a property in the Philippines with some restrictions regarding the the currently regulations.

Lets see the detail for the different methods to acquire a property.

1. As owner of a corporation.
2. Buying a condominium unit. See Post
3. Buying a freestanding house (and leasing the land). See Post
4. Acquisition through hereditary succession. See Post

1. As owner of a corporation.

This is one of the most safest but complex way to buy a property as a foreigner. Companies are the legal entities in the Philippines that can own both land and buildings. Lets see how:

1. Establishing a Corporation: The first step is to establish a corporation in the Philippines. Foreigners can own up to 100% of a corporation in the country, subject to certain restrictions and requirements set by the Philippine Constitution and other relevant laws.
2. Selecting a Corporate Structure: Decide on the type of corporation that best suits your needs. Common options include a domestic corporation or a branch office of a foreign corporation. Consult with legal and financial advisors to determine the most appropriate structure for your investment.
3. Registering the Corporation: Register the corporation with the appropriate government agencies in the Philippines, such as the Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue (BIR). Ensure compliance with all registration requirements and obtain the necessary permits and licenses.
4. Opening a Bank Account: Once the corporation is registered, open a corporate bank account in the Philippines. This account will be used for all financial transactions related to the purchase of property, such as depositing funds for the down payment and transferring funds for the purchase price.
5. Finding a Property: Conduct a property search and identify the real estate you wish to purchase. Consider factors such as location, size, price, and potential for appreciation. Work with a reputable real estate agent or broker to assist you in finding suitable properties that meet your criteria.
6. Negotiating the Purchase: Negotiate the terms of the purchase with the seller or developer of the property. Once an agreement is reached, review and sign the purchase contract or agreement, ensuring that all relevant terms and conditions are clearly stated and understood by both parties.
7. Due Diligence: Conduct due diligence on the property to verify its legal status, ownership history, and any encumbrances or liabilities. This may involve obtaining a title report, conducting a physical inspection, and verifying zoning and land use regulations.
8. Financing the Purchase: If financing is needed, secure the necessary funds through the corporation’s bank account or through external financing sources. Be prepared to provide financial statements and other documentation to support the loan application.
9. Completing the Transaction: On the agreed-upon closing date, complete the transaction by paying the purchase price and any associated fees and taxes. Transfer the ownership of the property to the corporation through the execution of a deed of sale or transfer of title.
10. Compliance and Ongoing Obligations: Ensure ongoing compliance with all regulatory requirements, including payment of taxes, filing of financial reports, and adherence to corporate governance standards. Engage legal and accounting professionals to assist you in meeting these obligations and protecting your investment.

By following these steps and seeking professional guidance as needed, foreign investors can successfully purchase property in the Philippines through a corporation and navigate the complexities of the real estate market in the country.

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