Philippines extends foreign land lease to 99 years

Manila, Philippines — President Ferdinand Marcos Jr. has signed into law Republic Act 12252, extending the maximum allowable term for foreign investors leasing private land in the Philippines to 99 years. The measure, hailed by business groups as a “game-changer” for long-horizon investments, replaces the old 50-year lease period with a 25-year renewal under the Investors’ Lease Act of 1994.

Under the new law, foreign nationals and companies may now enter into a single, aggregate lease term of up to 99 years for land needed in approved investment activities. These include industrial, commercial, agricultural, agro-forestry, tourism, and ecological conservation projects. The lease, however, must be registered under the Foreign Investments Act and approved by the Department of Trade and Industry’s Board of Investments (BOI) or the relevant investment promotion agency.

The law imposes strict safeguards: projects must commence within three years of signing, with tourism ventures required to infuse at least US$5 million—70% of which must be invested within three years. Leases exceeding the 99-year cap are invalid, and violators face penalties ranging from P1 million to P10 million. Moreover, if an investor withdraws or misuses the leased property, the contract is automatically terminated.

For landed residential properties such as subdivisions and townhouses, the extended lease does not apply to foreigners leasing for personal residential purposes. Such arrangements remain covered by Presidential Decree 471, which limits leases to 25 years, renewable once for another 25. Filipino citizens and Filipino-owned companies, however, may contractually agree to longer leases under the Civil Code, provided these are registered and annotated on the property’s title to protect third-party rights.

Industry analysts note that the law opens opportunities for large-scale tourism estates, industrial parks, and integrated resorts, where long lease horizons are critical to investor confidence and financing. But they caution that the rules are not designed for individual foreigners seeking to lease house-and-lot units. Developers aiming to market residential-type projects under the new framework must ensure compliance with BOI approvals, DHSUD regulations, and land use controls under agrarian reform and local government zoning.

The BOI is expected to issue implementing rules and regulations in the coming weeks to clarify procedures for registration, monitoring, and coordination with other agencies. Business groups have expressed optimism that the extended lease period will attract greater foreign capital, particularly in tourism and infrastructure, while balancing constitutional safeguards on land ownership.