Philippines’ 99-Year Leasehold Law: What It Means for Foreign Ownership in Asia

The Philippines has taken a bold step in reforming its property laws by extending land leaseholds for foreign nationals to 99 years. This newly passed legislation – signed by President Ferdinand Marcos Jr. in September 2025 – replaces the previous limit of 50 years (with a one-time 25-year extension) that had been in place for decades. The move is a game-changer for foreign investors and expatriates eyeing real estate in the country, and it signals a wider regional trend of Southeast Asian nations rethinking foreign ownership rules. This article explores the policy shift in historical context, its implications for investors and expats, comparisons with neighboring countries’ laws, expert commentary, and what it foretells about the future of foreign property investment in the region.

From 50 to 99 Years: A Historic Policy Shift

For many years, the Philippines tightly restricted foreign ownership of land due to constitutional provisions – foreigners cannot own land outright in the country Instead, long-term leasing has been the mechanism to grant property access to foreign entities. The Investors’ Lease Act of 1993 allowed foreign investors to lease private land for up to 50 years, renewable for an additional 25 years. This 50+25 year leasehold was the status quo for foreign businesses and individuals interested in Philippine real estate. However, investors often voiced that the combined 75-year maximum still created uncertainty for projects that require multi-decade horizons.

Recognizing these concerns, the government enacted Republic Act No. 12252 in 2025, amending the old law to grant a straight 99-year lease term on private land for qualified foreign investors. By essentially doubling the lease duration, the Philippines aims to provide a more stable and predictable investment environment. “It is the policy of the State to ensure the reliability of investors’ lease contracts to provide a stable environment for foreign investments,” the new law declares. In practical terms, a 99-year leasehold is akin to a lifetime (and beyond) for most investors – offering security comparable to ownership without violating the constitutional ban on foreign land ownership.

This policy shift did not happen overnight. It was spearheaded in the legislature by House Speaker Martin Romualdez, who argued that extending leases would allay foreign investors’ fears of losing access to land mid-project. The House of Representatives approved the bill in late 2024 with overwhelming support (175 votes in favor vs. 3 against). President Marcos Jr., pursuing an “open-door” policy toward legitimate foreign capital, signed it into law by early September 2025. The historical context is one of the Philippines striving to catch up with regional peers: despite a growing economy, the country has lagged in foreign direct investment (FDI) inflows, attracting only $8.9 billion in FDI in 2024 compared to Vietnam’s $20.17 billion and Indonesia’s $24.2 billion. By liberalizing land lease terms, officials hope to boost investor confidence and make the Philippines more competitive in Southeast Asia.

Impacts on Foreign Investors, Expats, and Real Estate

The new 99-year leasehold law carries significant implications for various stakeholders:

• Foreign Investors: Businesses investing in factories, industrial estates, tourism ventures, agriculture, and other long-term projects can now secure land for nearly a century. This long horizon is expected to unlock “a massive amount of investment capital from foreign parties”, according to David Leechiu, CEO of Leechiu Property Consultants. Companies will have more time to recoup their investments, making big-ticket projects like manufacturing plants and resort complexes more viable. Under the previous 50-year cap, some investors hesitated or sought complex legal structures to ensure continuity for projects that might run for generations. With a 99-year leasehold, the risk of a lease running out in the middle of operations is effectively eliminated. This assurance can improve financing options too – lenders and investors are more comfortable with projects when land rights are secured for the long term.

• Expatriates and Retirees: Individuals from overseas who wish to live or retire in the Philippines stand to benefit as well. While foreigners still cannot own land, a 99-year lease is essentially as good as ownership for a person’s lifetime, and even for their heirs. An expat can lease land to build a home or lease a house and be confident that their lease won’t expire in their lifetime (whereas a 50-year lease might have been a concern for younger buyers or for leaving property to children). The change could therefore boost the Philippines’ appeal among expat retirees and remote professionals seeking long-term residence in Asia. It aligns with other recent initiatives like easier long-term visas, positioning the Philippines as a friendly destination for foreign residents. Real estate developers may start marketing long-term leasehold properties (such as resort villas, retirement communities, or suburban homes) directly to foreign buyers now that the tenure can stretch nearly a century.

• Local Real Estate Market: The Philippine property market could see a surge in foreign interest. More foreign-funded real estate projects may launch, and local landowners might find it easier to lease out land for development partnerships. Hotels, resorts, and tourism facilities are expected to get a boost, as noted by Leechiu, because foreign operators can commit to projects with confidence that they’ll have land rights for decades of operation. This could mean new jobs, technology transfer, and ancillary business growth. At the same time, the influx of foreign players could drive competition. High-end residential and commercial property segments might rise in value with increased foreign demand, while the broader market benefits from a sentiment that the Philippines is “open for business.”

Of course, the reform isn’t without its critics. Some agricultural and nationalist groups have voiced concern that opening up 99-year access to land could encourage land speculation or marginalize Filipino farmers. The law does include safeguards – for example, it grants the President authority to impose shorter lease terms in industries vital to national security or development priorities. It also limits lease arrangements to approved investment purposes and requires government review of lease contracts to ensure compliance with development goals. These conditions aim to prevent abuse of the system and underscore that the 99-year leaseholds are intended for bona fide investments that benefit the country.

How the Philippines Stacks Up: Regional Comparisons

Foreign ownership and leasehold rules vary widely across Southeast Asia. The Philippines’ move to a 99-year leasehold for foreigners brings it closer in line with some regional practices, but contrasts with others:

• Thailand: Long known for strict limits on foreign land ownership, Thailand prohibits foreigners from owning land freehold (except in rare cases), and has traditionally capped leases at 30 years (renewable for 30 more by contract, but not guaranteed by law). In 2023-2025, however, Thailand has been advancing legislation to extend lease terms to 99 years as well. Thai officials see extended leases as a way to attract high-net-worth investors and expats, and to stimulate the economy by encouraging long-term projects. The proposed Thai law – still under review as of mid-2025 – underscores a regional trend: even very conservative markets are considering reform. If Thailand passes its 99-year lease amendment, foreigners there would get nearly the same tenure security as in the Philippines, though Thailand’s law is expected to exclude agricultural land and come with conditions to prevent a “sell-off of the nation”. Notably, Thailand already draws many foreign retirees and professionals, but they typically buy condominiums (where foreign freehold ownership up to 49% of a condo building is allowed) or lease houses. A 99-year lease option could make Thailand even more competitive – which adds pressure on the Philippines to stay investor-friendly.

• Vietnam: Vietnam has become a magnet for foreign investment in manufacturing and real estate, despite a more restrictive property regime for individuals. All land in Vietnam is technically owned by the state, and even locals have land use rights rather than freehold deeds. Foreign individuals have been allowed to own residential property on a 50-year leasehold basis since 2015, when Vietnam relaxed its housing laws. In certain cases – such as large projects or in designated economic zones – leases for foreign investors can extend to 70 years, and there were proposals to stretch this to 99 years in special zones to stay competitive. Those proposals met with public resistance amid fears of foreign influence, and the 99-year term in Vietnam has not yet been broadly implemented. So, currently, a foreign buyer in Vietnam can typically secure a home for 50 years (with possible renewal), and foreign developers can obtain land use rights for their projects for 50-70 years. Despite these limits, Vietnam’s robust economic growth and investor incentives have helped it outperform peers in FDI. Experts noted that if Vietnam were to grant 99-year leases in key zones, it “would make Vietnam a more competitive market in the region”, on par with neighbors that offer longer leases. The Philippines, by enacting a 99-year term nationwide, may leapfrog Vietnam in real estate attractiveness for some categories of investors – especially those looking for stability in property rights over a century-long horizon.

• Malaysia: In contrast to the Philippines and others, Malaysia stands out for its relatively liberal approach to foreign property ownership. Foreigners in Malaysia can buy and own land (including freehold title) and residences, subject to certain conditions and price thresholds. Each state in Malaysia sets minimum price limits (often around RM600,000 to RM1,000,000, depending on the state) to ensure foreign buyers only purchase high-end properties and do not compete with local first-time homebuyers. Aside from restrictions on purchasing agricultural land or properties deemed low-cost or earmarked for ethnic Malays (Bumiputra), Malaysia imposes few barriers – it is known as one of the easiest countries in Asia for a foreigner to own property. Leasehold vs. freehold exists in Malaysia too, but foreigners are allowed to buy either tenure (many condo projects, for example, are freehold and open to foreign buyers). This openness, combined with initiatives like the Malaysia My Second Home (MM2H) long-term visa, has made Malaysia popular among expatriate retirees and investors. The Philippines’ new 99-year leaseholds narrow the gap in ownership experience – a foreigner leasing in the Philippines now gets almost the same permanence as actually owning in Malaysia (99 years is effectively a lifetime). However, Malaysia still offers the prestige and legal rights of true ownership in many cases, which the Philippines does not provide due to its constitutional limitations. In essence, the Philippines is approaching Malaysia’s level of openness via leaseholds, but not overtaking it.

Other neighboring countries fall somewhere in between these examples. Indonesia, for instance, bars foreign freehold ownership but permits long-term use rights (typically 30 years, extendable to 80 years in stages for residential property by foreigners under certain visas). Cambodia allows foreigners freehold ownership of condos (not land) and 50-99 year leases on land via contracts. Singapore, on the high end, allows foreigners to own high-rise condos freely but sharply limits landed property purchases. In this context, the Philippines’ reform is part of a broader pattern in Southeast Asia: competitive liberalization. As nations vie for foreign capital, many are adjusting property and visa laws to entice investors, retirees, and multinational companies. The Philippines has now signaled that it doesn’t want to be left behind in this race.

What Are Experts and Officials Saying?

The extension to 99-year leases has drawn widespread approval from business groups and property experts, while also prompting discussion about its implications:

• Government Officials: The Marcos administration and Philippine legislators have championed the law as a long-overdue enhancement to the investment climate. “We want to be competitive regionally and globally in terms of enticing foreign investments,” said Speaker Martin Romualdez, noting that many countries in the region already offered longer lease tenures. The official rationale is that longer leases will encourage more foreign companies to set up operations and “create more job and income opportunities for our people”. The law’s text itself emphasizes consistency with the constitutional mandate to protect national patrimony while adopting a “flexible and dynamic policy” on long-term leases for foreign investors across industries. Simply put, Philippine officials are selling this as a win-win: foreigners get security, and Filipinos get investment-fueled development.

• Business Chambers: Prior to the law’s passage, foreign business chambers in the Philippines – including American, European, Japanese, and other international chambers – vocally supported extending leaseholds. In a joint statement in June 2025, a coalition of chambers argued that a 99-year term would create a “more stable and predictable leasehold system” in the Philippines, making the country a safer bet for long-term projects. These groups often cite examples of investors choosing Vietnam or Indonesia over the Philippines in the past, due in part to uncertainty around land tenure. With the change, the chambers expect a more level playing field. The Makati Business Club and Philippine Chamber of Commerce have also lauded the reform as part of a broader push to improve the ease of doing business.

• Real Estate Experts: Property consultants and analysts see the 99-year lease as transformative for the real estate sector. David Leechiu, mentioned earlier, highlighted that the law “should open up a massive amount of investment capital… propel projects such as hotels that will boost tourism”. In his view, the Philippines has been at a disadvantage, competing for investments against neighbors with superior infrastructure or more investor-friendly policies. Now, at least on the policy front, the country can match or exceed the lease terms on offer elsewhere. Another expert, CEO Rick Santos of Santos Knight Frank (a Philippine real estate services firm), opined in a recent forum that longer leases could increase property values and spur joint ventures, as foreign investors partner with local landowners for development. “It provides clarity. Ninety-nine years is essentially perpetual for a business’s timeline,” he noted, explaining that it could unlock projects in sectors like renewable energy and logistics parks that require large land parcels.

• Public and Critics: Not everyone is celebrating. Some academics and nationalist commentators caution that a 99-year lease might be “too attractive” and could lead to scenarios where foreign entities control crucial land assets for generations. Farmers’ advocacy groups like the Kilusang Magbubukid ng Pilipinas (KMP) have even protested the law, arguing it “surrenders Philippine sovereignty … at the altar of foreign big business”. They fear that domestic landowners might prioritize leasing to foreigners over selling to Filipinos, possibly sidelining Filipino farmers or small entrepreneurs. Government response to these concerns has been to reiterate that the land itself is not being sold – after 99 years, leases expire, and ownership never leaves Filipino hands. Additionally, the law’s supporters note that more investment in industries like agriculture or tourism could actually benefit local communities via jobs and improved infrastructure. The true impact will likely depend on implementation; robust regulations and oversight (promised via upcoming implementing rules and regulations) will be needed to ensure that lease agreements serve the public interest as intended.

Future Outlook: The Philippines’ New Role in Southeast Asian Real Estate

The passage of the 99-year leasehold law is more than just a legal tweak – it’s a strategic signal about the Philippines’ direction. In the coming years, this reform may position the Philippines as a rising hotspot for foreign property investment in Southeast Asia. Here’s a forward-looking analysis of what to expect:

• Competitive Edge: By offering century-long land access, the Philippines has put itself on par with, or ahead of, regional competitors in terms of property tenure security. Investors who might have overlooked the Philippines due to its previous 50-year limit may now give the country a fresh look. When combined with other investment-friendly measures (such as tax incentives, special economic zones, and liberalized retail trade and public service laws), the lease reform strengthens the narrative that the Philippines is “open for business” and eager to welcome foreign capital. This could help the country snag investments that might otherwise have gone to Vietnam, Indonesia, or Thailand. In particular, long-gestation projects – think massive infrastructure developments, new cities, or renewable energy farms – can now be more confidently launched in the Philippines, knowing the land rights can endure through the life of the project.

• Regional Trend of Liberalization: The Philippines’ move may also encourage neighboring countries to continue revisiting their own laws. Southeast Asia as a whole is in a moment of evolution regarding foreign ownership and investment. Thailand’s government, for example, has explicitly cited the need to “unlock laws to foster new investment” and has been fast-tracking the 99-year lease bill in 2025. If both the Philippines and Thailand embrace 99-year leases, it sets a new regional benchmark. Others might follow suit or find alternative ways to entice investors (such as easier residency visas or raising foreign ownership caps in condos). For foreign investors and expatriates, this competition is a boon – it means more choices and better terms when considering where to invest or settle in Asia.

• Sustainable Investment and Real Estate Growth: With greater foreign participation, the Philippine real estate landscape could evolve rapidly. We may see new master-planned communities, smart-city projects, and innovation hubs funded by international consortia. Tourism real estate (resorts, theme parks, eco-tourism facilities) is poised for growth, leveraging the country’s natural beauty now that investors can lease beachfront land for 99 years. Likewise, industrial real estate (logistics centers, factories) might expand, supporting the Philippines’ bid to become a manufacturing alternative in Asia. Over the long run, increased FDI in property and related sectors can contribute to higher GDP growth and employment. The government will, however, need to ensure infrastructure keeps up – investments in transportation, power, and connectivity are crucial so that new projects succeed and benefit the wider economy. If managed well, foreign-invested projects can integrate with local supply chains and communities, creating a multiplier effect of prosperity.

• Guarding National Interests: The future will also test how the Philippines balances openness with sovereignty. The 99-year lease law is essentially a bet that economic gains outweigh potential risks. To maintain public support, authorities will likely be vigilant in preventing exploitative arrangements. We might see more rigorous enforcement of rules like requiring investments to start within a few years of signing a lease (to avoid land-banking), and ensuring that leases in sensitive areas (e.g. near military facilities or on ancestral domains) are carefully vetted. The success of this policy will be measured not just in dollars of FDI, but in outcomes for ordinary Filipinos – job creation, technology transfer, and inclusive growth. If those materialize, the lease reform could be remembered as a cornerstone of the Philippines’ economic transformation in the 2020s.

In summary, the Philippines’ new 99-year leasehold law is a landmark development that aligns the country with a pro-investment wave sweeping across Southeast Asia. It offers foreign investors and expatriates an unprecedented level of security in a market that was once considered one of the most restrictive. Time will tell how much new investment it actually attracts, but early signals from the business community are very optimistic. As other countries in the region also liberalize their property and visa regimes, Southeast Asia is becoming more accessible to global investors and residents than ever before.

Final Thoughts

For those intrigued by the opportunities this law unlocks – whether you’re an investor seeking long-term projects or an expat dreaming of an extended stay in the islands – now is the time to explore the Philippines. Join the Philippines Move Waiting List to receive updates on these groundbreaking changes, emerging real estate developments, and insider tips on relocating to the Philippines. With the landscape of foreign ownership in Asia rapidly evolving, staying informed is key – and the Philippines is quickly becoming a focal point of this new era in regional real estate