MANILA, Philippines - Potential foreign investors are turned off by the restrictions on foreign ownership of land and businesses in some sectors in the Philippines, the head of an international real estate organization said.
Flavio Gonzaga Nunes, president of International Real Estate Federation (FIABCI-World), said restricting foreign ownership of businesses would discourage foreigners from investing in the Philippines.
"This kind of approach, for me, is not something good to encourage investors to come to a country. When you enter a joint venture, you would would very much like to have some power of decision. If you have to enter a foreign country as investor and you do not have majority or equal to your local partner, 60-40, is not positive," he told ANC.
In the Philippines, ownership of private land and public utilities is restricted to Philippine citizens and companies. However, foreign nationals and companies may indirectly own these businesses in the country by taking up to 40% stake in Philippine companies where 60% is owned by Filipinos.
Nunes admitted that this kind of protective measure can also be seen in other countries, but the percentage of foreign ownership differs. "In China, you have some similar regulations. You see that in other countries as well, for instance in Africa, you have protection 50-50," he said.
He expressed hope that the Philippines would consider lifting or amending these restrictions on foreign ownership of land.
Asked what investors look at before investing in real estate markets, Nunes identified four requisites: taxation; regulations on remittance and repatriation of money of investments; regulations on establishing a company and getting construction permits; and political stability.
"If the country has no problem, it will be one of the objects of interest of potential investors... We have a couple of requisites, if the country qualifies, then this country will be eligible for potential investors," he said.
Although he has only been in Manila for a few days, Nunes said there are opportunities for foreign investors in the Philippines' tourism sector.
"The real estate market in the Philippines is mostly domestic, but we have other sectors in real estate market that are very attractive to foreign investors, like tourism... Here, for sure there are attractive possibilities for investment funds and private companies to come and put their money in tourism," he said.
Meanwhile, the FIABCI chief welcomed the introduction of real estate investment trusts in the country, saying this would help facilitate the sale of real estate assets. - With ANC