Logistics and Warehousing Business in the Philippines: Foreign Ownership Rules

Foreign ownership of a logistics or warehousing business in the Philippines depends on how the business is classified. Under the rules implementing the amended Public Service Act, seaports are classified as public utilities, which are subject to the 60% Filipino ownership requirement under the Constitution. Ordinary warehousing, freight forwarding, and cargo handling are not on that list, so they are treated as public services or businesses affected with public interest — and the implementing rules state that the relevant administrative agency shall not impose nationality requirements on public services that are not classified as public utilities. Foreigners may therefore generally own a logistics or warehousing enterprise, provided the entity is properly organized and holds any required authorization.

How the law classifies logistics and warehousing

The starting point is the definition of a public utility under the implementing rules of Republic Act No. 11659, the law amending the Public Service Act. Section 10 of the rules limits the term to a public service that operates, manages, or controls for public use any of the following: distribution of electricity; transmission of electricity; petroleum and petroleum products pipeline transmission systems; water pipeline distribution systems and wastewater pipeline systems, including sewerage pipeline systems; seaports; and public utility vehicles.

Warehousing, trucking, freight forwarding, and customs brokerage do not appear on that list. Section 10 also states that no other person shall be deemed a public utility unless otherwise subsequently provided by law. A public service that is not classified as a public utility is considered a business affected with public interest.

The foreign ownership rule for public services

Section 6 of the implementing rules is direct: the relevant administrative agency shall not impose nationality requirements on a public service not classified as a public utility under its jurisdiction or supervision. This is the provision that opened logistics and warehousing to full foreign equity.

Two qualifications matter. First, the rule applies to public services, not public utilities. If an activity is later classified as a public utility — through the reclassification process described in the rules, which involves a review by NEDA and a recommendation to Congress — the 60% Filipino ownership requirement would apply. Second, a seaport is expressly a public utility, so a business that operates, manages, or controls a seaport for public use remains subject to the nationality requirement.

Organizing the Philippine entity

A foreign-owned logistics or warehousing venture is typically set up as a domestic corporation under the Revised Corporation Code (Republic Act No. 11232). Key requirements include:

• Incorporators. Under Section 10, any person, partnership, association, or corporation — singly or jointly, but not more than fifteen (15) in number — may organize a corporation for any lawful purpose. Natural-person incorporators must be of legal age, and each incorporator of a stock corporation must own or subscribe to at least one share.
• Articles of incorporation. Section 13 requires the articles to state the corporation's name, specific purpose or purposes, principal office (which must be within the Philippines), term, incorporators, directors, and capital structure. Where a corporation has more than one purpose, the primary and secondary purposes must be indicated.
• Capital stock. Section 12 provides that stock corporations are not required to have a minimum capital stock, except as otherwise specifically provided by special law.
• Perpetual term. Under Section 11, a corporation has perpetual existence unless its articles of incorporation provide otherwise.

If the corporation will engage in a business reserved for Filipino citizens, the prescribed form of articles of incorporation in Section 14 includes a restriction that no transfer of stock or interest may reduce Filipino ownership below the percentage required by law, and that this restriction must appear on all stock certificates. For activities not reserved to Filipinos, no such restriction is required.

Authorizations and customs compliance

Section 7 of the implementing rules provides that no public service shall operate in the Philippines without a valid certificate or authorization from the relevant administrative agency, confirming that the operation and the authority to do business will promote the public interest. Which agency has jurisdiction depends on the activity — the rules list agencies including the Department of Transportation, the Philippine Ports Authority, the Maritime Industry Authority, and the Land Transportation Franchising and Regulatory Board, among others.

For businesses moving goods across borders, the Customs Modernization and Tariff Act (Republic Act No. 10863) governs entry and clearance. Section 106 allows a declarant to be the importer, the exporter, a customs broker acting under authority, or a duly empowered agent or attorney-in-fact. Section 107 makes the declarant responsible for the accuracy of the goods declaration and for payment of duties and taxes, while a licensed customs broker is responsible for accuracy but not for payment. Section 116 states that, unless otherwise provided by law or regulation, all goods may be freely imported and exported without import or export permits, clearances, or licenses — while Section 117 requires the necessary clearances and licenses for regulated goods.

Frequently asked questions

Can a foreigner own 100% of a warehousing business in the Philippines? Generally yes, if the business is a public service and not a public utility. Section 6 of the implementing rules of Republic Act No. 11659 bars nationality requirements on public services that are not classified as public utilities.

Is a seaport considered a public utility? Yes. Section 10 of the implementing rules expressly lists seaports among the public utilities, so the 60% Filipino ownership requirement applies to operating, managing, or controlling a seaport for public use.

Does a logistics company need a franchise or certificate? Section 7 of the implementing rules requires a valid certificate or authorization from the relevant administrative agency before a public service may operate. The specific agency depends on the nature of the service.

Practical takeaways

• Warehousing, trucking, and freight forwarding are not listed as public utilities under the implementing rules of Republic Act No. 11659, so full foreign ownership is generally allowed.
• Seaports are expressly classified as public utilities, and the 60% Filipino ownership rule applies to them.
• Section 6 of the rules prohibits nationality requirements on public services that are not public utilities.
• A Philippine corporation is organized under the Revised Corporation Code, with no minimum capital stock required unless a special law provides otherwise.
• A valid certificate or authorization from the relevant administrative agency is required before a public service may operate.

Primary sources

The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.

• REPUBLIC ACT NO. 11232 - AN ACT PROVIDING FOR THE REVISED CORPORATION CODE OF THE PHILIPPINES

• REPUBLIC ACT NO. 10863 - AN ACT MODERNIZING THE CUSTOMS AND TARIFF ADMINISTRATION

• IRR of REPUBLIC ACT NO. 11659 - IMPLEMENTING RULES AND REGULATIONS OF THE REPUBLIC ACT NO. 11659 OR AN ACT AMENDING COMMONWEALTH ACT NO. 146, OTHERWISE KNOWN AS THE PUBLIC SERVICE ACT, AS AMENDED

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.