Long Term Lease

Explaining the long term lease of land in the Philippines by a foreigner.


Pamela M.

10/16/20233 min read

Many foreigners in the Philippines are often hesitant to lease land due to the overwhelming and misleading information they come across on social media platforms, shared by expatriates residing in the country. Personally, I have come across numerous absurd comments regarding this matter. It is disconcerting to realize that a significant portion of this information is not provided by qualified real estate attorneys, but rather by individuals without any expertise in the field. This confusion and misinformation have created a sense of fear and uncertainty among foreigners, making it challenging for them to navigate the process of leasing land in the Philippines. It is crucial for potential lessees to seek guidance from reliable sources to avoid falling victim to the misleading narratives propagated on social media.

Foreigners and foreign corporations have the opportunity to lease land in the Philippines through a long-term contract. Initially, the lease period spans 50 years, with the option to renew for additional periods of 25 years. This arrangement allows non-residents to have access to land in the country, offering them potential opportunities for investment or other purposes. The leasing system provides a secure and regulated framework for foreigners to engage in land-related activities in the Philippines. It allows for the establishment of long-lasting relationships between non-residents and the country, fostering economic growth and collaboration. With these provisions in place, the Philippines aims to attract foreign investments and promote a thriving business environment while ensuring the protection of national interests.

A foreigner can purchase a house and lot by paying the owner the full selling price, without the need for the Title to be transferred to the foreigner's name. Instead, the foreigner will be given a Special Power of Attorney (SPA) by the owner, granting them the authority to sell or transfer the Title to anyone else at their discretion. To solidify this agreement, the owner and foreigner will also sign a notarized Memorandum of Agreement (MOA) and a Long Term Contract of Lease. With these legal documents, including the SPA, MOA, Contract of Lease, and the original Title, the foreigner possesses all the necessary rights to freely make decisions regarding the property.

Foreigners have the option to register the Tax Declaration for their land and building in their own name. This enables them to fulfill their obligation of paying yearly taxes for the property. By taking this step, foreigners can ensure that they are complying with the local tax regulations and maintaining proper documentation for their real estate. It also grants them the legal rights and responsibilities associated with property ownership. Registering the Tax Declaration demonstrates a foreigner's commitment to being a responsible property owner and contributing to the local community.

While the land is on lease, the foreigner also have the right to do anything with the property, including renovation and selling. This means that they can make necessary changes and improvements to the land or buildings, as well as potentially sell the property to someone else. These rights give foreigners a certain level of control and flexibility over the leased land, allowing them to customize it to their needs and potentially profit from it in the future. However, it is important to note that these rights are subject to any specific terms and conditions outlined in the lease agreement. Overall, this arrangement provides foreigners with the opportunity to fully utilize and benefit from the leased property during the lease period.

I personally provide my foreign clients with the option to lease land. After thoroughly explaining the concept, many of them are enthusiastic about this idea. By working with an experienced attorney and a property owner who is knowledgeable about the law, leasing land becomes a secure and viable solution for foreigners looking to invest in the Philippines. This arrangement allows them to enjoy the benefits of land ownership without the risks and complications that may arise. Through careful guidance and a comprehensive understanding of the legal framework, I ensure that my clients can confidently pursue their investment goals and make the most of their opportunities in the country.