Law Summary
Key Definitions for Implementation
- "Investing in the Philippines" includes equity investment through actual foreign exchange remittance or asset transfers, recorded with the Securities and Exchange Commission.
- "Withdrawal of approved investment" means either ceasing operations for 3 consecutive years or abandoning the project during the lease.
- Failure to pay lease rent for 3 months plus non-operation for the same period constitutes abandonment.
Coverage and Conditions of Lease Agreements
- Foreign investors may lease private lands under Philippine law with these conditions:
- Maximum initial lease term of 50 years.
- One renewal allowed for up to 25 years.
- Land use limited to the investment purpose agreed upon.
- Leased area must fit purpose but comply with Comprehensive Agrarian Reform Law and Local Government Code.
- Leasehold rights may be transferred or sold, but limitations apply if new holder is also foreign.
Limitations and Requirements
- Non-investing foreigners remain under existing laws like Presidential Decree No. 471.
- Withdrawal or unauthorized use of leased land leads to automatic lease termination.
- Renewal depends on mutual agreement and demonstration of social and economic contributions.
- Tourism project leases require a minimum investment of $5 million with 70% invested within 3 years.
Termination of Lease
- The Secretary of Trade and Industry can terminate leases if the investment is not started within 3 years post-contract signing.
Penal Provisions for Violations
- Contracts violating lease term limits, use restrictions, or approved area are void from start.
- Violators face fines between P100,000 to P1,000,000 and/or imprisonment from 6 months to 6 years.
- Corporate officers responsible for violations are held criminally liable.
Miscellaneous Provisions
- Separability Clause ensures that invalid provisions do not affect the rest of the law.
- Repeals conflicting laws and regulations.
- Effectivity is immediate upon approval.