On April 13, 2026, President Ferdinand Marcos, Jr. signed the 13th Regular Foreign Investment Negative List (RFINL), updating the regulatory framework for foreign ownership limitations in the Philippines. Foreign investors — whether forming a new entity, entering a joint venture, or expanding existing operations – should familiarize themselves with its provisions.
Why is there a Need for the List?
The 13th RFINL is the Philippines’ primary industry for defining which industries are open to foreign equity and to what extent. It draws its legal basis from the Foreign Investments Act, constitutional provisions on national patrimony and sovereignty, and other relevant laws governing specific industries.
Further, the Philippine government is required to update the list periodically to reflect legislative amendments, shifts in policy direction, and evolving economic priorities.
The Two-Tier Structure
The RFINL is divided into two lists:
List A covers industries where foreign ownership is restricted by constitutional provisions or specific statutes. On the other hand, List B covers sectors where foreign participation is limited on grounds of national security, public health, public morals, or protection of local micro, small, and medium enterprises (MSMEs).
List A: Law-Restricted Sectors
Absolute Prohibition (0% Foreign Ownership)
No foreign equity is permitted in the following sectors:
- Mass media (except for recording and certain internet-based transmission services)
- Practice of professions (such as architecture, subject to reciprocity exceptions)
- Cooperatives
- Private security agencies
- Small-scale mining
- Utilization of marine and natural resources in the Philippine territory
- Cockpit operations
- Manufacture and distribution of weapons of mass destruction and anti-personnel mines
- Manufacture and retail of firecrackers and pyrotechnic products
Thus, these prohibitions reflect the longstanding constitutional policy of retaining Filipino control over culturally sensitive, security-related, and resource-based industries.
Partially Open Sectors
Foreign equity is allowed but subject to ownership thresholds:
Up to 25% Foreign Equity – Construction of defense-related structures; private recruitment for local or overseas employment
Up to 30% Foreign Equity – Advertising
Up to 40% Foreign Equity – a vast category, covering the following sectors
- Retail trade enterprises with a capitalization of below ₱ 25 million
- Natural resource exploration and utilization
- Ownership of private lands (subject to constitutional limitations)
- Operation of public utilities
- Educational institutions (with exceptions)
- Commercial fishing operations
- Government procurement of goods, infrastructure projects, and consulting services (subject to conditions)
- Ownership of condominium units
While the general rule is a 40% limit, some exceptions exist in the following matters:
- Renewable energy projects (such as solar, wind, hydro), which may allow 100% foreign ownership
- Certain infrastructure and procurement projects may allow higher foreign participation if technical requirements are not met by Filipino entities
Full Foreign Ownership (Conditional)
The latest RFINL pertains to a targeted liberalization, specifically in the Telecommunications sector, where up to 100% foreign ownership is allowed, subject to reciprocity.
Indeed, this showcases the country’s intention to improve competition and service quality in the said field, aligning with global trends in digital infrastructure.
List B: Regulated Due to Public Welfare
Up to 40% Foreign Equity
- Manufacture and distribution of firearms, explosives, and regulated materials requiring Philippine National Police (PNP) clearance
- Military-related production and servicing
- Distribution and Manufacture of dangerous drugs, as authorized by law
- Gambling-related activities (with exceptions)
- Sauna, massage clinics, and similar establishments
- Micro and Small Markets with less than $200,000 equity
- Micro and Small Markets with advanced technology as determined by the Department of Science & Technology (DOST); endorsed as a startup by the Department of Trade & Industry (DTI), Department of Information Communications & Technology (DICT), and DOST; with a minimum of 15 direct Filipino employees, and with equity below $100,000
List B aims to preserve space for local industries and protect public safety.
Strategic Implications for Businesses and Investors
Understanding the RFINL is not merely a compliance exercise — it directly shapes corporate structuring, market entry strategy, and investment risk.
- Regulatory compliance as a competitive advantage: Knowing applicable ownership thresholds from the outset helps avoid invalid corporate structures, registration delays, and regulatory penalties.
- Optimized capitalization structures: Investors may explore joint ventures with Filipino partners, layered holding structures, and capitalization strategies designed to maximize permissible foreign equity.
- Sector opportunity mapping: The list identifies high-potential industries open to greater foreign participation, notably, renewable energy, telecommunications, and other infrastructure or specialized contracts.
- Risk Management & Due Diligence: Non-compliance can result in investment losses and license revocation. Any investor due diligence process must include a thorough assessment of RFINL classifications.
Final Note: Compliance is Strategy
The 13th RFINL reflects a fundamental principle of Philippine economic policy — that foreign investments are welcome but must be within a defined framework that safeguards national interests.
Hence, for investors, the goal is not simply to comply, but to structure operations strategically within these parameters- building partnerships, enabling growth, and creating sustainable long-term value.
At Babylon2k, we specialize in helping businesses navigate complex regulatory frameworks and corporate structuring in the Philippines. To ensure your investments are protected and compliant — send us a message or schedule a consultation with our experts today to secure your operations in the Philippines.
Reference: Executive Order No. 113, s. 2026
