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If you are a business owner or a corporation seeking to acquire a real property in the Philippines, consider the following:

1. Constitutional and Legal Framework

In general, the Philippine Constitution restricts land ownership to Filipino citizens or corporations with at least 60% Filipino equity. For some industries, this restriction may be lower or higher. Identify the type of industry, and double-check with the Philippines’ Foreign Investment Negative List to verify the foreign ownership restrictions. 

Foreign individuals or entities may acquire land only under specific exceptions, such as hereditary succession or long-term leases. Foreign nationals can own condominium units provided foreign ownership does not exceed 40% of the project.

2. Verifying Ownership and Title

To ensure legitimacy:

• Obtain a Certified True Copy of the land title from the Register of Deeds to confirm authenticity.
• Check for encumbrances, liens, or disputes associated with the property.
• Verify zoning classifications and environmental compliance with local government units.

3. Legal and Contractual Documentation

Ensure that all necessary documents are properly executed:

• For corporate sellers, confirm recent board resolutions and the secretary’s certificates authorizing the sale and the signatory for the transaction.
• Differentiate between a Contract to Sell, which outlines conditions before transfer, and a Deed of Absolute Sale, which finalizes ownership transfer upon payment.

4. Tax and Fee Obligations

Property transactions involve taxes such as Capital Gains Tax, Documentary Stamp Tax, Transfer Tax, and registration fees. Clarify whether the buyer or seller bears these costs in the contract.

5. Practical Considerations

Engage professionals such as lawyers specializing in property law, surveyors, and geodetic engineers to verify boundaries and inspect the property physically. Conduct site visits to confirm improvements and check for unregistered interests.

Due diligence is indispensable for mitigating risks in real property acquisitions in the Philippines. By thoroughly verifying ownership documents, regulatory compliance, and legal obligations, investors can safeguard their interests. Engaging professional advisors early ensures a smooth transaction process while minimizing exposure to legal pitfalls or financial losses.

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Disclaimer: This article is for informational purposes only and should not be considered exhaustive legal advice. For specific guidance on property acquisitions for corporations in the Philippines, consult with a legal professional.

‍Padin & Partners Law Offices is a full-service law firm that caters to property and corporate law in Cebu City, Cebu, Philippines. For consultations: book an appointment or send us an email at admin@padinlaw.ph