I. Principal laws and executive issuances that promote and regulate foreign investment — with key provisions
1. The 1987 Constitution — Article XII: National Economy and Patrimony
Establishes State policy to pursue a national economy that ensures equitable distribution of opportunities, income and wealth and increasing productivity as the key to raising living standards.
Provides that the State shall protect Filipino ownership of lands, enterprises and national patrimony where expressly required by the Constitution or statute; it limits foreign ownership in certain areas (e.g., land, public utilities, mass media, etc.) and reserves some economic activities to Filipino citizens or corporations.
Directs the State to regulate foreign investments to ensure that they contribute to national development (employment, technology transfer, exports, balanced regional growth).
(Constitutional provisions are the constitutional baseline for ownership limits and guide all implementing statutes and executive lists such as the FINL.)
2. Republic Act No. 7042 — Foreign Investments Act of 1991 (as amended by RA 8179)
Declares the State policy of welcoming foreign investments as a supplement to Filipino capital and technology; provides the basic framework for registration of foreign enterprises and incentives for productive foreign investment.
Allows up to 100% foreign equity in domestic market enterprises except where the Constitution or other laws restrict foreign ownership (those restrictions are reflected in the FINL).
Requires registration with the appropriate authorities (e.g., Board of Investments (BOI) for promoted activities) and prescribes reporting requirements for foreign investors.
3. Executive Order No. 226 — Omnibus Investments Code of 1987 (and its Implementing Rules)
Establishes the Board of Investments (BOI) and creates the statutory framework for investment promotion, investor incentives, and the Investment Priorities Plan (IPP) — the IPP lists activities eligible for BOI registration and incentives.
Provides fiscal and non-fiscal incentives (tax holidays, duty exemptions, special depreciation, etc.) for registered projects that meet IPP / BOI criteria; sets thresholds and conditions distinguishing BOI-approved projects.
Remains a central implementing instrument for investment promotion (though parts have been harmonized with later laws such as CREATE and FIRB rules).
4. Executive Order No. 175 (June 27, 2022) — The Regular Foreign Investment Negative List (FINL, 12th FINL)
The FINL is the government instrument that identifies sectors where foreign equity is restricted or prohibited (List A: constitutional/statutory restrictions; List B: public interest/security/SME protection). It operationalizes the Constitution and RA 7042 in concrete sectoral ownership limits.
EO 175 (12th FINL) revised sectoral reservations and set foreign ownership ceilings for numerous economic activities; it must be updated periodically (statutory/administrative practice).
5. Republic Act No. 8762 — Retail Trade Liberalization Act of 2000 (amended by RA 11595)
Liberalized foreign participation in retail trade by prescribing capital thresholds, registration requirements, and conditions allowing greater foreign equity in retail enterprises; the 2021 amendment (RA 11595) lowered paid-up capital thresholds to encourage foreign retail entrants.
The law is subject to the FINL and to BOI/DTI implementing rules (IRR).
6. Commonwealth Act No. 146 — Public Service Act (as amended, notably by RA 11659 in 2022)
Traditionally limited foreign ownership in “public utilities” (40% foreign ownership ceiling where constitutionally required). The 2022 amendments narrowed the definition of public utility and lifted foreign-equity restrictions in many sectors previously treated as public utilities, permitting expanded foreign participation under defined conditions.
7. Commonwealth Act No. 108 — Anti-Dummy Law (1936)
Criminalizes evasion of nationality or ownership restrictions by means of "dummies" or nominee arrangements; imposes penalties on those who allow or participate in arrangements that evade constitutional or statutory nationality requirements. It remains the principal criminal sanction for attempts to circumvent ownership limits.
8. Republic Act No. 11534 — CREATE Act (Corporate Recovery and Tax Incentives for Enterprises Act), 2021
Reforms corporate tax and rationalizes fiscal incentives; creates the Fiscal Incentives Review Board (FIRB) and harmonizes incentive grant procedures for investment promotion agencies (including BOI). The CREATE Act and its implementing rules are the primary fiscal framework for incentives offered to both domestic and foreign investors.
The law modified portions of EO 226 and transferred certain incentive approval powers to FIRB; it also introduced clearer, time-bound incentive schemes (income tax holidays, special tax rates, enhanced deductions) tied to strategic investment priority lists (SIPP / IPP).
9. Investment Priorities Plan (IPP) and Strategic Investment Priority Plan (SIPP) (BOI / NEDA instruments)
The IPP (issued/maintained by BOI under EO 226) and the SIPP (strategic list) identify priority activities and geographic areas eligible for promotion and for incentives. These annual/periodic instruments operationalize which projects can obtain BOI registration and tax/non-tax incentives.
10. Other sectoral & regulatory statutes and rules (selected examples)
Banking and financial sector laws (e.g., General Banking Law, BSP regulations) — regulate foreign participation in banks and non-bank financial institutions (licensing, prudential limits).
Special laws affecting natural resources, mining, fisheries, mass media, education, small-scale mining, land ownership — contain explicit nationality and ownership limitations that affect foreign investors (these sectoral statutes are reflected in FINL List A).
Various implementing rules, BOI Memorandum Circulars and FIRB resolutions — provide the technical rules for incentives, eligibility, reporting and compliance for foreign-owned registered business enterprises.
II. How the pieces fit together
Constitution (Article XII) sets the maximum restrictions (e.g., land, public utilities, mass media, etc.) — statutes and the FINL implement and specify those constitutional ceilings.
RA 7042 (Foreign Investments Act) is the statutory welcome mat and registration framework: it allows foreign equity generally (up to 100%) except where restricted by the Constitution, other statutes, or the FINL; registration and BOI/DTI processes follow.
EO 226 (Omnibus Investments Code) + IPP / SIPP + BOI/Memoranda operationalize incentives and the mechanics of registration for promoted activities; CREATE / FIRB now governs the modern fiscal-incentives regime.
FINL (Executive Order) is the operational sectoral negative list (List A and List B), specifying where foreign ownership is limited — consult the current FINL for sectoral ceilings when advising a foreign client.
III. Key constitutional provisions (Article XII) — distilled, with legal effect for foreign investment
The State shall pursue a national economy that ensures equitable distribution of opportunities and promotes domestic control of assets necessary to national patrimony. (policy foundation).
The Constitution reserves certain lands, public utilities, mass media, and industries to Filipino citizens or corporations (thereby imposing foreign-ownership ceilings or outright prohibitions in certain sectors). Legal and regulatory measures (FINL, sectoral statutes) implement these reservations.
The State shall promote investments that develop resources, generate employment, and transfer technology — foreign investment is permissible and encouraged so long as it advances national development and respects constitutional nationality limits.
IV. Practical note for legal counselling
Always consult the current FINL (the Regular FINL issued by the Office of the President) and sectoral statutes for precise foreign-equity ceilings in the client’s line of business; the FINL is updated periodically (latest regular FINL was promulgated by EO No. 175, 27 June 2022 — check for later updates).
For incentives, check whether the project is listed in the current IPP / SIPP and whether it qualifies under BOI or other IPAs; determine whether incentives are governed by EO 226, CREATE/FIRB rules, or other promotional instruments.
Watch recent statutory amendments that change sectoral treatment (e.g., amendments to the Public Service Act, to Retail Trade rules, and the CREATE income-tax/incentive regime).
V. Primary sources consulted
1. 1987 Constitution, Article XII (National Economy and Patrimony).
2. Republic Act No. 7042 — Foreign Investments Act of 1991 (and RA 8179 amendment). (law text / BOI summary).
3. Executive Order No. 226 — Omnibus Investments Code of 1987 and its Implementing Rules (BOI).
4. Executive Order No. 175 (27 June 2022) — 12th Regular Foreign Investment Negative List (FINL).
5. Republic Act No. 8762 — Retail Trade Liberalization Act of 2000; amendment RA 11595 (2021) lowering paid-up capital thresholds.
6. Commonwealth Act No. 146 — Public Service Act; and its amendment (RA 11659, 2022) changing the definition of public utility and foreign-equity treatment.
7. Commonwealth Act No. 108 — Anti-Dummy Law (1936).
8. Republic Act No. 11534 — CREATE Act (Corporate Recovery and Tax Incentives for Enterprises) and its IRR (tax/incentive regime affecting foreign investors).
9. Board of Investments (BOI) materials — Investment Priorities Plan (IPP), BOI memoranda and MCs, and BOI website where IPP/SIPP and incentives guidance are posted.
10. UNCTAD / investment policy summaries and government releases summarizing FINL updates.
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Assisted by ChatGPT, December 10, 2025.