6 Things to Know About Buying Property Under a Corporation Name in the Philippines

In the Philippines, buying property under a company name is fully legal. Many buyers choose this route. In fact, buying through a corporation is now popular with businesses and investors. Businesses, investors, and joint ventures often use this path. However, there are strict rules to follow.

Before you take this path, you need to know the key rules. Key areas include ownership rules, papers needed, and taxes. You also need to know if this path suits your case.

For investors, business owners, OFWs, and partners, this guide covers homes, offices, retail, or investment property in Cebu and the Philippines. Unlike legal theory, we cover the real facts you need as a buyer.

Key Takeaways

• Philippine law lets companies own real estate. But to own land, at least 60% of the company must be Filipino-owned.
• Company ownership adds extra taxes, SEC costs, and more paperwork than buying on your own.
• This setup works best for business use, investors with many properties, and estate planning. It is not ideal for a single home buy.

1. Who Can Legally Hold Real Estate Through A Corporation

Philippine law treats companies as separate legal entities. A registered company can hold title to real property in its own name. Such a company can also sign contracts and manage its own assets. Ownership structure and citizenship of the owners, however, decide what the company can buy.

Local Companies

With SEC registration, a company can own private land in the Philippines. One key rule governs this: the 60/40 ownership split.

If foreigners own more than 40% of the shares, the company loses its right to own land. That rule applies no matter how the shares are set up or what the company does.

Foreign Companies

Even foreign firms can also hold a condo unit. However, the total foreign ownership in the project must stay within the 40% cap. That rule applies per building, not per buyer.

PEZA Companies

PEZA-registered companies can own land only for approved business use within PEZA zones.

2. What A Corporation Can And Cannot Buy

Not all property types follow the same rules when a company buys. Knowing what your company can legally buy will save you time and prevent costly errors.

Land And Houses

Local companies that are at least 60% Filipino-owned can buy land and the buildings on it. Examples include vacant lots, house-and-lot packages, business lots, and industrial land.

Philippine law treats land and buildings as separate items. So a company that does not meet the 60/40 rule can still own the building. Leasing the land separately keeps this legal.

Condo Units

Companies can buy condo units even with foreign owners. Foreign-owned units in the building must stay below 40% of the total. In busy areas like Cebu IT Park and Cebu Business Park, some buildings are close to that cap. Check the foreign ownership level with the building manager before you buy.

Business units

Many buyers use a company to purchase office spaces, retail units, and other commercial units. Philippine law allows this without the 60/40 land rule, as long as the unit has a condo title.

What A Company Cannot Own

No company, no matter its registration, can own more than a set area of private agricultural land. Corporations also cannot circumvent land reform laws through real estate purchases structured to look like corporate investments.

3. Core Documents And Registration Rules

Getting the paperwork right is a must. Missing or wrong documents can delay or kill a deal, most of all when a company is buying. Here is what you need.

Company Documents

Your company must be active and in good standing with the SEC before any deal can move forward. Here are the documents you will need:

• Articles of Incorporation confirming the company purpose
• Corporate By-laws
• SEC Certificate of Registration
• Corporate TIN from the BIR
• Board Resolution for the property purchase
• Secretary’s Certificate confirming the Board Resolution is valid

If your company has unpaid fees or missed SEC filings, fix those first. Title transfer will not go through if the SEC shows the company as overdue.

Property Title Checks

Before buying, get a true copy of the title. Go to the Registry of Deeds directly, not the seller. Check that the title is clean — free of liens, court orders, or any claims.

Also check the tax declaration to confirm the property’s assessed value and real property tax status. Get a Tax Clearance from the local government unit to confirm no taxes are unpaid.

BIR and Registry of Deeds Steps

Once the sale is executed, the BIR processes the tax payments and issues a Certificate Approving Registration (CAR). Registry of Deeds requires the CAR before it will transfer the title. Many first-time corporate buyers overlook how long this step takes.

4. Taxes, Fees, And Ongoing Corporate Costs

Buying property through a company changes your tax picture a lot. For instance, some changes work in your favor. Others, however, add costs you may not have expected.

Taxes And Fees At Purchase

At the point of purchase, the following fees usually apply:

• Documentary Stamp Tax (DST): 1.5% of the selling price or zonal value, whichever is higher.
• Transfer Tax: Paid to the local government, usually 0.5% to 0.75% of the selling price or zonal value.
• Notarial Fees: To notarize the Deed of Sale. The amount varies.
• Registration fees at the Registry of Deeds, based on the sale price.
• VAT: 12%, if the seller is VAT-registered and the property is an regular asset.

Ongoing Costs

Once the company holds the property, ongoing costs include:

• Corporate Income Tax on earnings
• Minimum Corporate Income Tax (MCIT): 2% of gross income. It starts four years after the company is set up, even with no profit.
• Annual SEC filing fees and fees
• IAET: This tax applies if the company keeps earnings with no valid reason. It also applies if the company does not pay dividends.

Double Taxation

Keep this risk in mind. First, the company pays tax on its corporate profits. Next, when the company pays dividends to owners, those get taxed again. Discuss this trade-off with a qualified accountant before you plan the purchase.

5. Benefits, Trade-Offs, And Transfer Flexibility

Company ownership of real property has real benefits. However, those benefits depend on your situation and how you use the company.

Limited Liability

One strong reason to use a company is limited liability. As a separate legal entity, the company keeps its debts apart from your personal assets. If the property faces claims, only the company bears the risk. Your personal funds stay safe.

Selling Shares vs Selling Title

Here is a key advantage of using a company. When you sell your shares, you move ownership without transferring the title. As a result, you avoid the full transfer tax and stamp fees that come with a normal property sale.

One trade-off: gains on share transfers are taxed at 15% under the TRAIN Law. That is higher than the 6% rate on direct property sales.

Estate Planning

Families sometimes use companies to plan for the future. Instead of going through estate tax steps for each property, heirs can just inherit shares in the company.

When Costs Outweigh Benefits

If you plan to buy a single home to live in, this setup costs more than it is worth. SEC fees, minimum tax, and double taxation on dividends add up fast. In most cases, buying as an individual is the simpler and cheaper path.

6. When This Structure Makes Sense And When To Get Help

Company property ownership is not always the right move. In general, some buyers find it worth the cost, while others end up paying more than they need to.

When It Makes Sense

• Business owners buying office, retail, or business space that will be used in operations
• Investors with many properties who want to keep real estate separate from personal funds
• Joint ventures between Filipino and foreign partners, set up properly under the 60-40 rule
• Families who want to pass property to future generations without repeated estate tax steps
• Developers holding land for a project under a registered company

Cases Where It Adds Too Much Cost

• Buying a single home for personal use or family occupancy
• Short-term property holds where annual SEC fees eat into returns
• Cases where the company exists only to hold one property and has no other real business

Why Legal Advice Matters

Property law, company law, and tax rules are all linked here. Hire a real estate lawyer to review the title and prepare the Board Resolution. They will confirm the deal is legal through the Secretary’s Certificate.

Cebu Grand Realty is a local brokerage that works with licensed agents. We have verified listings in Cebu City, Mandaue, Lapu-Lapu, and Mactan. Our team can help you find the right property and handle the deal process. For the legal setup and tax planning, you need a qualified lawyer and accountant.

Building the right team early leads to the best results. Start before you find the property — not after you are already in active talks.

Frequently Asked Questions

What ownership rules must a Philippine corporation meet to legally purchase land?

Your company must be registered locally with the SEC. Filipinos must hold at least 60% of its shares. Foreign owners can hold up to 40%.

Can a corporation with foreign owners buy a condominium unit, and what limits apply?

Yes. Companies with foreign owners can also buy a condo unit. Foreign-owned units in the building cannot go above 40% of all units in total.

What corporate documents are usually required to authorize and complete a property purchase?

Prepare several key documents before the deal moves forward. Required items include the Articles of Incorporation, Corporate By-laws, and SEC Certificate. You also need a corporate TIN, a Board Resolution for the purchase, and a Secretary’s Certificate.

What tax benefits and ongoing fees should be considered when holding property in a corporation?

On the plus side, property costs can reduce taxable income. Passing shares also avoids repeated title transfer fees. On the cost side, you have annual SEC fees, corporate tax, and possible double taxation on dividends.

What are the legal risks of nominee or “dummy” owner arrangements in real estate ownership?

Dummy setups, where Filipinos hold shares only on paper for a foreign party, break the Anti-Dummy Law. Both sides can face criminal charges.

What happens to corporate-owned real estate if the corporation is dissolved or liquidated?

When a company closes, its assets — including property — go through a wind-down process. Owners can sell the property and split the proceeds, or take the property directly.