Can a Foreigner Own a Mining Company in the Philippines?

TL;DR: Generally no. Mining is one of the few sectors where the Philippines has not loosened foreign ownership. A normal mining contract (an MPSA) requires a company at least 60% Filipino-owned. The one route to 100% foreign ownership is a Financial or Technical Assistance Agreement (FTAA), which is limited to large-scale operations and needs presidential approval.

The contrast with telecom and renewable energy

If you have read about the Philippines opening up, you may assume mining went with it. It did not.

Telecommunications moved to 100% foreign ownership after Congress amended the Public Service Act to narrow what counts as a “public utility.” Renewable energy followed a different path, through a Department of Justice opinion on how Article XII treats it. Chamberlain has separate guides on both. Those reforms share a feature. They concern activities that the Constitution treats as a franchise or a service, where the foreign cap could be reread or redefined without touching the text.

Mining sits on firmer ground. Article XII, Section 2 of the 1987 Constitution says minerals, coal, petroleum and other mineral oils are owned by the State. The State may explore and develop them directly, or it may enter co-production, joint venture or production-sharing agreements with Filipino citizens, or with corporations or associations at least 60% of whose capital is owned by Filipinos. That is a rule about who may extract a finite national resource, not a classification a statute can redefine. The Public Service Act amendment did not change it, and a legal opinion about renewable energy does not reach minerals.

So the headline for a foreign founder is plain. Mining has one carve-out, and it is narrow.

What the Constitution allows

The same Section 2 contains the exception. The President may enter agreements with foreign-owned corporations “involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils.” The agreement must follow general terms and conditions set by law, based on real contributions to the economy and the general welfare. The President must notify Congress of every such contract within 30 days of signing it.

Two limits come with the text. Agreements run for up to 25 years, renewable for up to 25 more. And the exception is for large-scale operations only. A foreigner cannot use it to run a small quarry or a modest gold operation with full control.

Congress implemented this through the Philippine Mining Act of 1995 (Republic Act No. 7942). That law creates two separate contract routes, and the whole ownership question comes down to which one you use.

The two routes compared

Read the investment row carefully. The Mining Act itself does not print a dollar floor for an FTAA in the sections cited here. It requires a sworn firm commitment of the expenditure obligation in the contract area and a financial guarantee bond equal to the applicant’s expenditure obligation for any year. The US$50 million and US$10 million figures come from the Fortun Narvasa and Salazar guide to Philippine mining law, which attributes them to the implementing rules. Treat them as the working benchmark, then ask the Mines and Geosciences Bureau (MGB) for the number currently in force before you commit capital.

The MPSA route in practice

An MPSA is the standard mining contract. The Mining Act defines it as an agreement where the government grants the contractor the exclusive right to conduct mining operations within a contract area and shares in the gross output. Only a “qualified person” can hold one, and the Act defines that as a Filipino citizen or a corporation, partnership, association or cooperative with at least 60% of its capital owned by Filipino citizens. The applicant must also show technical and financial capability and a satisfactory environmental track record as determined by the MGB.

This is where most foreign investors land when they want a stake in a mid-sized operation. The usual structure is a Philippine corporation with a Filipino majority shareholder holding at least 60%, and the foreign investor holding up to 40%. The foreigner can add commercial protection through shareholder agreements, offtake contracts, project financing, equipment supply and technical services. What the foreigner cannot do is hold the majority of the voting and economic interest in the MPSA holder.

Two points trip people up.

First, the 60% test is about the capital of the contract holder, and it is tested on the real owners. A holding company with a Filipino name does not count if the money and control sit with foreigners. Second, the rule is a floor on Filipino ownership. A 60-40 split is the most foreign equity the structure can carry, not a typical outcome to be negotiated down from.

Practical consequence for a foreign investor

If you want majority control over a mining project, the Mining Act leaves you two doors.

1. Partner with Filipinos holding at least 60% under an MPSA. You accept minority equity and negotiate governance, board seats, reserved matters and exit rights.
2. Qualify for an FTAA for 100% foreign ownership. You commit to large-scale capital, meet the technical and financial capability test, and win presidential approval.

There is no third door through a clever holding structure, and the third door is exactly where the criminal risk sits. More on that below.

The FTAA route in practice

Section 33 of the Mining Act says any qualified person with technical and financial capability to undertake large-scale exploration, development and utilization of mineral resources may enter an FTAA. The Act sets limits you should know before you plan a project footprint.

• Area. An FTAA contract area can cover up to 1,000 meridional blocks onshore and up to 4,000 meridional blocks offshore, or a combination within those maximums.
• Term. Up to 25 years from execution, renewable for up to 25 more.
• Approval. The agreement is executed and approved by the President. This is not a bureau-level or department-level decision.
• Commitments. The applicant gives a sworn statement of the expenditure obligation to be invested in the contract area, and posts a financial guarantee bond in favor of the government.
• Transfers. Assigning an FTAA needs presidential approval, while a mineral agreement transfer needs the DENR Secretary.

The commercial reality is that an FTAA is a project for a miner with serious balance sheet capacity and a multi-year horizon. The approval path runs through the DENR and the MGB for evaluation, and ends on the President’s desk, which makes the timeline political as well as technical. If your project is a few million dollars, the FTAA route is probably not designed for you.

Mining taxation changed recently, and it touches both contract types. Republic Act No. 12253, the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, covers mineral agreements and FTAAs alike. PwC reports royalties of 1% to 5% based on profit margin, a windfall profits tax of 1% to 10%, project-by-project ring-fencing, and a 2:1 debt-to-equity limit on interest deductions for related-party debt. PwC reports the regime became operative in February 2026. It affects the economics of the project, not who may own it.

Processing is treated differently from extraction

A founder whose plan is to buy ore and process it, rather than to dig, faces a separate rule. Section 55 of the Mining Act requires a minerals processing permit from the DENR Secretary before anyone processes minerals. The permit runs five years and is renewable for like periods up to a total of 25 years. Section 56 then says a foreign-owned or foreign-controlled corporation may be granted that permit. Fortun Narvasa and Salazar says the same, noting that a foreign corporation is deemed qualified to hold an exploration permit, an FTAA or a mineral processing permit.

In plain terms, the 60% Filipino rule bites at the mineral agreement, which is the right to extract. The processing permit does not carry the same ownership cap. If your business is value-added processing, you can structure it as a foreign-controlled company without the MPSA restriction.

That is not the end of the analysis. Processing needs feedstock, and the feedstock comes from someone holding a mining right. A foreign-owned processor that sources ore through contracts with Filipino-held MPSA operators is a legitimate structure. A foreign processor that effectively controls the mine behind the scenes is not. I verified the permit wording in the statute itself. Check the current implementing rules and any recent MGB issuances for permit conditions that matter to your specific minerals.

Foreign-owned corporations may also hold exploration permits. That lets a foreign explorer do early work, but converting a discovery into a producing mine still sends you back to the two routes above.

The Anti-Dummy Law risk

Mining is a common place where foreign investors are tempted to go around the cap. The reasoning goes like this. If a Filipino partner must hold 60%, find a Filipino who will hold shares for you and sign what you tell them to sign.

Do not do this. The Anti-Dummy Law (Commonwealth Act No. 108) targets arrangements where a citizen lets their name or citizenship be used to evade a nationality requirement, and where an alien profits from it. The penalty in Section 1 is imprisonment of not less than five nor more than fifteen years, and a fine of not less than the value of the right, franchise or privilege involved, and in no case less than PHP 5,000. A citizen’s lack of equivalent assets when acquiring the holdings is treated as evidence of a violation. A corporation found in violation can be dissolved in court proceedings.

The practical test is whether your Filipino partner genuinely owns and controls their shares. That means they paid for them with their own funds, they vote them, they sit on the board and take part in decisions, and they receive their share of dividends. A partner who signs a blank transfer, a trust declaration back to you, or a side letter giving you all voting power is a dummy, whatever the share register says.

Legitimate protection exists. Minority investors can negotiate board seats, veto rights over defined matters, information rights, anti-dilution protection and put or call options. The line is control that exceeds your 40% in substance. Our guide on the Anti-Dummy Law explained goes through where that line falls, and it applies directly to a mining joint venture.

Moratoriums and local restrictions

Ownership is only one layer. Even a clean 60-40 or FTAA structure can stall on policy and local politics, so check these separately.

National moratorium. Executive Order No. 79 (2012) restricted the grant of new mineral agreements for about nine years. President Duterte lifted that restriction through Executive Order No. 130 in April 2021. Confirm with the Mines and Geosciences Bureau that no newer national moratorium applies. Separately, the DENR issued a moratorium in May 2022 on accepting new applications for special exploration permits and government seabed quarry permits, which shows that narrower freezes still happen.

Open-pit method. A 2017 DENR order banned open-pit mining for copper, gold, silver and complex ores. The DENR lifted it in December 2021 through DAO 2021-40. Confirm the current rules for your method and mineral.

Local government bans. Chambers describes regulatory inconsistencies between national agencies and local government units, citing a provincial ban on open-pit mining affecting the Tampakan project in South Cotabato, which a court later said was without effect. A national permit does not end local opposition, and the legal fights can last for years.

Closed areas. The implementing rules close certain areas to mining, including old growth or virgin forests, proclaimed watershed forest reserves and wilderness areas.

Policy here moves with each administration, so verify the current position with the MGB and any DENR issuances before you sign anything.

Environmental and social licensing

Two requirements apply whatever your ownership structure, and you should budget time and cost for both. This is a pointer, not a full guide.

Environmental Compliance Certificate (ECC). The Mining Act requires environmental clearance based on the Philippine Environmental Impact Assessment System, other than during the exploration period. In practice you obtain an ECC before development and production.

Free, prior and informed consent (FPIC). Section 16 of the Mining Act says no ancestral land may be opened for mining operations without the prior consent of the indigenous cultural community concerned. Fortun Narvasa and Salazar notes that where the community agrees, the royalty may not be less than 1% of gross output. If your area overlaps ancestral domain, FPIC under the Indigenous Peoples’ Rights Act process is a gating item with its own timeline, and it often decides whether a project proceeds.

Mining contractors must also give preference to qualified Filipino citizens in all types of mining employment under Section 62. Foreign technical staff need their own work authorization, which is a separate topic from ownership.

How to choose a path

Start with scale and control, because they decide the route.

1. Small or mid-sized project, willing to take minority equity. Use an MPSA with a Filipino partner holding at least 60%. Spend your effort on partner diligence and governance terms.
2. Large-scale project, need majority or full control. Look at an FTAA. Test your capital against the reported US$50 million and US$10 million benchmarks, and confirm them with the MGB.
3. Processing or value-added business. Look at a minerals processing permit, which allows foreign-owned or foreign-controlled corporations, and secure ore supply by contract.
4. Exploration first. A foreign corporation can hold an exploration permit, then decide on the production route after you know what the ground holds.

Whichever you choose, if your plan depends on a Filipino partner that is a partner in name only, rework it before you invest. For the wider picture of which sectors permit full foreign ownership and which keep a cap, see our overview of 100% foreign ownership in the Philippines. For the registration side of a mining entity, see our page on setting up a mining company.

This guide is general information, not legal advice on your specific facts. Book a consultation if you want a fixed-scope review of your ownership structure before you approach a partner or the MGB.