The 13th Foreign Investment Negative List (EO 113): What Foreign Investors in the Philippines Need to Know in 2026

On 13 April 2026, President Ferdinand Marcos Jr. signed Executive Order No. 113, promulgating the 13th Regular Foreign Investment Negative List (FINL), the first update to the Philippines’ definitive foreign ownership framework in four years. The 13th foreign investment negative list Philippines 2026 replaces the 12th FINL issued under EO 175 in 2022 and formally integrates sweeping liberalisation measures enacted since then, including amendments to the Foreign Investments Act (RA 11647), the Retail Trade Liberalisation Act (RA 11595), the Public Service Act (RA 11659), and expanded renewable energy ownership thresholds. For general counsel, investment advisers, and foreign business owners evaluating Philippine market entry or expansion, this executive order is the single most important regulatory document shaping sectoral eligibility and equity structuring strategy through 2028.

What Is the Foreign Investment Negative List, and Why the 13th FINL Matters

The Foreign Investment Negative List is the regulatory instrument that defines which economic activities in the Philippines are closed or restricted to foreign investors and which are fully open to 100% foreign equity. It draws its authority from the 1987 Philippine Constitution, principally Article XII (National Economy and Patrimony), and from Republic Act No. 7042, the Foreign Investments Act of 1991, as most recently amended by RA 11647 in 2022. Together, these instruments establish a “negative list” framework: any activity not enumerated on the list is presumed open to full foreign ownership.

The FINL is divided into two parts. List A covers activities where foreign ownership is restricted or prohibited by the Constitution or by specific legislation. These restrictions can only be amended through constitutional revision or legislative action. List B covers activities where foreign participation is capped for reasons of national security, defence, public health, public morals, or on the basis of reciprocity with the investor’s home country. Amendments to List B may be made every two years through executive order.

The Philippine government is constitutionally mandated to update the FINL regularly. In practice, however, the interval between the 12th and 13th editions stretched to four years, from June 2022 to April 2026. That gap is significant because three landmark liberalisation statutes were signed into law in 2022 alone: RA 11647 (Amended Foreign Investments Act), RA 11595 (Amended Retail Trade Liberalisation Act), and RA 11659 (Amended Public Service Act). While these laws took immediate legal effect, they were not consolidated into the FINL until EO 113. The 13th FINL matters because it eliminates the ambiguity that persisted during that gap, giving foreign investors, regulators, and the Securities and Exchange Commission (SEC) a single, authoritative reference document for ownership compliance.

Key Legislative Timeline, From RA 7042 to EO 113

Understanding EO 113 requires tracing the legislative arc of foreign investment liberalisation in the Philippines. The table below summarises the critical milestones that shaped the current regulatory landscape and the Philippines foreign investment act amended framework now consolidated in the 13th FINL.

This timeline underscores a critical point: the legal liberalisations of 2022 were already in effect, but it is EO 113 that provides the consolidated, executive-endorsed reference that the SEC, the Board of Investments (BOI), and foreign investors rely on for day-to-day compliance determinations.

List A, Sectors Reserved or Restricted by Philippine Law

List A of the 13th FINL enumerates activities where foreign ownership is restricted or completely prohibited by the 1987 Constitution or by specific Philippine statutes. These restrictions cannot be altered by executive order, they require either constitutional amendment or legislative action. List A is further subdivided into activities reserved exclusively for Filipino nationals and activities where foreign equity is capped at a defined percentage.

Activities Reserved Exclusively for Filipinos (0% Foreign Equity)

Under EO 113, the following activities remain completely closed to foreign investors, meaning no foreign equity participation is permitted:

• Mass media, except recording (Article XVI, Section 11 of the 1987 Constitution)
• Practice of professions, where constitutional or statutory restrictions apply to the corporate practice of licensed professions such as engineering, medicine, accountancy, architecture, and law
• Retail trade enterprises with paid-up capital below the US$500,000 threshold set by RA 11595, reserved exclusively to Filipino citizens and enterprises
• Cooperatives, as defined under the Philippine Cooperative Code
• Private security agencies
• Small-scale mining, as defined under RA 7076 (People’s Small-Scale Mining Act)
• Utilisation of marine resources in archipelagic waters, territorial sea, and exclusive economic zone, as well as river systems, lakes, and similar bodies of water, reserved to Filipino nationals
• Cockpit operation and management
• Manufacture of firecrackers and other pyrotechnic devices

These reservations are rooted directly in the 1987 Constitution’s nationalist economic provisions. Any foreign investor seeking to participate in these sectors, even indirectly through nominee arrangements, faces criminal liability under the Anti-Dummy Law (Commonwealth Act No. 108).

Activities Where Foreign Ownership Is Limited by Law

Beyond the completely reserved activities, List A identifies sectors where foreign equity is capped at specific percentages by the Constitution or by statute. The table below sets out the principal foreign ownership limits under the 13th FINL, together with the governing law that mandates each cap.

Two entries on this table deserve particular attention. First, the reclassification of key public services under RA 11659, telecommunications, airlines, domestic shipping, and railways, as sectors open to 100% foreign ownership is now formally codified in the 13th FINL. Second, the renewable energy distinction is nuanced: solar, wind, and ocean or tidal energy projects may accommodate up to 100% foreign equity, while large hydropower and geothermal exploration remain constitutionally capped at 40% because they involve natural resource utilisation.

List B, Activities Restricted for Security, Defence, Health, and Reciprocity Reasons

List B of the foreign investment negative list Philippines operates differently from List A. While List A restrictions are anchored in the Constitution or in statutes, List B restrictions are policy-based and may be amended by executive order every two years. They address concerns related to national security, public health, public morals, and the protection of small and medium enterprises (SMEs).

Under EO 113 2026, the following activities carry a maximum foreign equity cap of 40% under List B:

• Manufacture, repair, stockpiling, and distribution of nuclear weapons, biological weapons, and anti-personnel mines
• Manufacture, repair, storage, and distribution of firearms, ammunition, gunpowder, and explosives
• Manufacture and distribution of dangerous drugs
• Sauna, steam bath, massage clinics, and similar establishments
• Gambling and gaming activities (except those regulated under PAGCOR)
• All forms of domestic market enterprises with paid-up equity capital of less than US$200,000, unless the enterprise involves advanced technology as determined by the Department of Science and Technology, or employs at least 50 direct employees, or is an export enterprise

The last category is particularly important for smaller-scale foreign investors. Any domestic market enterprise that does not meet the US$200,000 minimum paid-up capital threshold and does not qualify for one of the three exceptions (advanced technology, employment generation, or export orientation) is effectively closed to foreign participation. This is the mechanism by which the Philippines protects micro and small domestic enterprises from foreign competition while still welcoming capital-intensive or export-oriented foreign investment.

Reciprocity-Based Restrictions, What They Mean in Practice

Among the most complex, and most commonly misunderstood, provisions in List B are the reciprocity-based foreign ownership limits. Under the reciprocity framework, foreign nationals may participate in certain activities only to the extent that their home country permits Filipino citizens to engage in the same activity with equivalent ownership rights.

In practice, this means that a foreign investor from Country X seeking to participate in a reciprocity-covered sector must demonstrate that Country X grants Philippine nationals equivalent or greater access to the same activity. The Philippine SEC and BOI evaluate reciprocity claims on a case-by-case basis, and outcomes can vary depending on available bilateral trade data, diplomatic certifications, and sector-specific treaties.

The 13th FINL updates the reciprocity provisions to reflect current trade agreements and bilateral arrangements. For investors from countries with robust free trade agreements with the Philippines, such as Japan, South Korea, Australia, and ASEAN member states, reciprocity is generally straightforward. For investors from jurisdictions with limited bilateral coverage, this area requires careful legal structuring and advance regulatory engagement. The practical impact was confirmed in news reporting on EO 113, noting that telecommunications operations are now open to full foreign ownership specifically “subject to reciprocity requirements.”

What Changed, 12th FINL vs 13th FINL Comparison

The 13th FINL issued under EO 113 is the first update to the foreign investment negative list Philippines since 2022. While many of the underlying liberalisation measures had already taken legal effect through their respective statutes, the 13th FINL consolidates them into a single reference framework, resolving ambiguities that complicated compliance determinations over the past four years. The table below provides a side-by-side comparison of the most significant changes.

The most significant practical impact of the 13th FINL is not necessarily the creation of new liberalisations, most were already law, but the consolidation of regulatory certainty. During the four-year gap between the 12th and 13th FINL, foreign investors frequently encountered conflicting guidance from different agencies about whether specific liberalisations were “officially” reflected in the FINL. EO 113 resolves this by providing a single authoritative text that regulators, advisers, and investors can all reference.

Sectors Open to 100% Foreign Ownership Under the 13th FINL

Under the negative list principle established by RA 7042, any economic activity not enumerated in List A or List B is open to 100% foreign equity ownership. This means that the overwhelming majority of sectors in the Philippine economy are, in fact, fully accessible to foreign investors, a reality that contradicts the common misconception that the Philippines is broadly “closed” to foreign investment.

Under EO 113 and the 13th FINL 2026, the following sectors are confirmed as open to 100% foreign ownership (provided the enterprise meets applicable paid-up capital requirements):

• Telecommunications, reclassified as a non-public utility under RA 11659
• Airlines and air transport services, reclassified under RA 11659
• Domestic shipping, reclassified under RA 11659
• Railways and subway transport, reclassified under RA 11659
• Expressways and tollways, reclassified under RA 11659
• Airports, reclassified under RA 11659
• Solar, wind, and ocean/tidal energy, under amended renewable energy rules
• Information technology and IT-enabled services (BPO/KPO)
• Software development and technology services
• Manufacturing, except where specific products fall under List A or List B restrictions
• E-commerce
• Financial technology (fintech), subject to Bangko Sentral ng Pilipinas licensing requirements
• Tourism-related enterprises, travel agencies, tour operations, and tourism transport
• Retail trade, with paid-up capital of US$500,000 or more
• Construction, where the enterprise is not engaged in government procurement or BOT projects subject to equity caps
• Export enterprises, regardless of paid-up capital level, provided 60% or more of output is exported

For investors considering Philippine market entry, the critical takeaway is this: the foreign ownership Philippines 100 percent principle applies by default. The burden is on the investor to verify that the target sector is not on List A or List B, not to seek affirmative permission for 100% ownership. This distinction matters for corporate structuring, SEC registration filings, and BOI incentive applications. For a more detailed guide to structuring a wholly foreign-owned entity, see our analysis on how to structure a 100% foreign-owned company in the Philippines in 2026.

Practical Compliance Guidance, Structuring Your Entry Under EO 113

Minimum Paid-Up Capital Requirements

The minimum paid-up capital threshold is the most immediate compliance concern for any foreign investor incorporating in the Philippines. Under RA 11647, as consolidated in the 13th FINL, the capital requirements are as follows:

• General threshold for domestic market foreign enterprises: US$200,000 in minimum paid-up capital. This applies to any foreign-invested enterprise that sells goods or services primarily into the Philippine domestic market and is not on the FINL.
• Reduced threshold, advanced technology: Foreign enterprises that involve advanced technology as certified by the Department of Science and Technology (DOST) may qualify for a lower minimum paid-up capital threshold of US$100,000.
• Reduced threshold, employment generation: Enterprises that directly employ at least 50 Filipino employees may also qualify for the US$100,000 reduced threshold.
• Export enterprises: Enterprises that export 60% or more of their output are generally exempt from the US$200,000 minimum and may register with the BOI under specialised investment structures.
• Retail trade: US$500,000 minimum paid-up capital under RA 11595. Foreign retailers capitalised below this threshold are excluded from the sector entirely.

Registration is filed with the Securities and Exchange Commission (SEC) for corporate formation and with the Board of Investments (BOI) for incentive registration. Investors should note that the SEC conducts its own FINL compliance review at the point of incorporation, articles of incorporation that propose activities restricted under the 13th FINL will be rejected. For a practical walkthrough of the Philippine banking requirements that accompany corporate formation, including proof of inward remittance and peso conversion, see our guide to opening a bank account in the Philippines as a foreigner.

Anti-Dummy Law Considerations

No discussion of FINL compliance is complete without addressing the Anti-Dummy Law (Commonwealth Act No. 108, as amended). This law criminalises the use of Filipino citizens as nominees, dummy stockholders, or agents to circumvent the foreign ownership restrictions in the FINL. Penalties include imprisonment of five to fifteen years, substantial fines, and, critically, the forfeiture of the enterprise’s corporate franchise.

The Anti-Dummy Law applies to any arrangement where a Filipino national holds shares or exercises management control on behalf of a foreign investor in a sector where foreign equity is restricted or prohibited. Common red flags include: Filipino shareholders who lack the financial capacity to have made their purported capital contributions; management agreements that vest operational control in foreign parties despite a Filipino-majority ownership structure; and circular fund flows between the foreign investor and Filipino shareholders.

The SEC and the Department of Justice have signalled increased enforcement attention to anti-dummy violations in recent years, and EO 113’s consolidation of the FINL is expected to sharpen the compliance baseline against which enforcement actions are measured. Foreign investors operating in or near List A sectors should conduct regular ownership audits and ensure that all shareholding arrangements can withstand scrutiny. For a deeper analysis of these risks, see our forthcoming guide on Anti-Dummy Law Philippines: compliance risks for foreign investors.

What EO 113 Means for Market Entry Strategy in 2026

The signing of Executive Order No. 113 marks a significant moment for foreign investment confidence in the Philippines. For the first time since the landmark liberalisation laws of 2022, foreign investors have a single, consolidated regulatory document that definitively maps the boundaries of permissible foreign participation across the economy. This matters not just for legal compliance but for capital allocation decisions, institutional investors and multinational corporations require regulatory certainty before committing to multi-year market entry strategies.

Several sectors warrant particular attention in the near term. Renewable energy, especially solar and wind, represents a major growth corridor now that 100% foreign ownership is formally confirmed in the FINL. Digital infrastructure, including telecommunications and data centre operations, benefits from the RA 11659 reclassification. Retail trade, with its lowered US$500,000 threshold, opens the Philippine consumer market to mid-tier foreign retailers that were previously priced out by the former US$2.5 million capital floor.

Investors should, however, remain attentive to three areas of risk. First, reciprocity-based restrictions in List B remain opaque and can produce unexpected results depending on the investor’s home jurisdiction, advance regulatory engagement is essential. Second, anti-dummy enforcement is tightening, and the consolidated FINL gives regulators a clearer standard against which to measure compliance. Third, certain provisions of EO 113 may require implementing rules and regulations (IRR) before their full operational implications become clear, particularly in the renewable energy and infrastructure sectors. These IRR timelines are pending further guidance from the relevant line agencies.

For foreign investment practice area experts advising on Philippine market entry, EO 113 should be treated as the baseline compliance document for all 2026–2028 structuring decisions. Investors considering entry into any sector near the boundaries of List A or List B should secure specialist Philippine foreign investment counsel before filing SEC registration. To find a foreign investment lawyer in the Philippines, consult the Global Law Experts directory for practitioners with demonstrated expertise in FINL compliance, sectoral ownership analysis, and regulatory clearance.