100% Foreign Ownership of Renewable Energy Projects in the Philippines

TL;DR: Since late 2022, a Philippine corporation that develops solar, wind, biomass or ocean energy can be 100% foreign-owned, because the Department of Energy (DOE) stopped treating those resources as nationality-restricted natural resources. Land did not open up. A foreign-owned developer still leases its site, and geothermal and direct water appropriation stay restricted.

Why renewable energy was capped at 40% foreign ownership

Article XII, Section 2 of the 1987 Constitution reserves the exploration, development and utilization of natural resources to the State. The State may undertake these activities directly, or it may enter co-production, joint venture or production-sharing agreements with Filipino citizens or with corporations at least 60% owned by Filipinos. The only foreign door is a financial or technical assistance agreement for large-scale mineral, petroleum and other mineral oil projects, signed by the President.

For years the DOE read that provision broadly. Under the Renewable Energy Act of 2008 (Republic Act No. 9513), a developer needs a contract with the DOE before it can use a renewable resource on a commercial scale. The DOE’s omnibus guidelines then required the applicant to be a Filipino or a corporation with at least 60% of its capital owned and controlled by Filipinos. Only biomass and waste-to-energy applications were exempt. In practice, a foreign solar or wind developer held at most 40% of the company that held the contract, and it needed a Filipino partner, usually an energy or property group, for the rest.

That structure had real costs for foreign sponsors:

• Lenders and equity investors wanted control of the project company, and a 40% stake gave them a minority position.
• A Filipino partner had to fund 60% of the equity or be carried by the foreign sponsor through shareholder loans and side agreements.
• Ownership caps made the nominee-style workarounds that the Anti-Dummy Law targets tempting. This is a risk, not a strategy.

The 2022 reform in three steps

1. The DOJ opinion

In 2022 the Department of Justice issued Opinion No. 21, series of 2022. It concluded that the constitutional ownership requirement for natural resources covers only things susceptible to appropriation, and that the sun, the wind and the ocean are not. Because these energy sources are inexhaustible, the DOJ reasoned, nobody can own or deplete them, so the 60-40 rule has no resource to protect. Law firm summaries of the opinion list solar, wind, hydro, and ocean or tidal energy as covered.

An opinion from the DOJ is not a statute, and it does not bind the courts. What made it operational was that the DOE, which administers RA 9513, adopted it.

2. The DOE circular

On 15 November 2022 the DOE signed Department Circular No. DC2022-11-0034. It amended Section 19 of the rules implementing RA 9513 to remove nationality restrictions on the exploration, development and utilization of renewable energy resources. Law firm reports put the effective date in early December 2022, after publication. The amended rules let the State enter RE service or operating contracts “with Filipino and/or foreign citizens or Filipino and/or foreign owned corporations and associations.”

3. The revised omnibus guidelines

In June 2024 the DOE issued Department Circular No. DC2024-06-0018, a revised set of guidelines for renewable energy contracts and developer registration, effective 4 June 2024. It carries the same principle forward: any person, whether Filipino or foreigner, may apply for an RE contract. It also formalizes the Certificate of Registration the DOE issues to eligible developers, and adds a Certificate of Authority that allows preliminary work for one to three years (depending on project type) before the 25-year contract term starts.

Before and after

What the contract is and who can hold it

The RE Act sets up a contract regime. Instead of a licence, the developer signs one of the following with the DOE:

• A Renewable Energy Service Contract (RESC), where the developer carries out the exploration, development and utilization of the resource under the DOE’s supervision.
• A Renewable Energy Operating Contract (REOC), used for projects where the DOE or a government entity already holds the resource data or facility.
• A Geothermal Service Contract, which keeps stricter nationality rules, requiring a Filipino citizen or a corporation at least 60% Filipino-owned.

Under the 2024 guidelines the DOE registers a developer by issuing a Certificate of Registration, and the contract term runs 25 years. Confirm the current renewal and extension terms in the guidelines themselves, because the DOE has revised them more than once since 2008.

The ownership cap on holding an RESC or REOC changed from 40% foreign to no nationality cap for the covered technologies. The reform did not change the other requirements of the regime. The developer still has to show technical and financial capacity, complete the DOE’s application and evaluation process, and meet the work program in its contract.

Where the resource-by-resource treatment differs

Hydro is where secondary sources differ, so read it carefully. The DOJ opinion named hydro among the covered energy sources. The DOE circular, though, keeps the nationality restriction on any activity that appropriates water directly from a natural source. One law firm summary describes hydroelectric projects as remaining subject to the 40% limit. Another reports that hydro qualifies for full foreign ownership provided it conforms with dam standards. For a hydro project, treat the water rights as the deciding issue and confirm the position with the DOE and the National Water Resources Board before you commit capital.

Geothermal is cleaner. The circular keeps the restriction for geothermal resources, other than large-scale exploration and development under a financial or technical assistance agreement.

What did not change: land

A foreign-owned developer can own the energy company and the plant equipment, but it still cannot own the ground under it. Article XII of the Constitution limits private land ownership to Filipino citizens and to corporations at least 60% owned by Filipinos, and bars private corporations from holding alienable public land except by lease. The DOE circular says the same thing from its side: an applicant whose activities are reserved to Filipinos, such as land ownership, lease of public land or appropriating water directly from the source, must still meet the nationality requirements that apply to those activities.

Land ownership rules are unchanged. The 2022 reform opened the equity of the renewable energy business. It did not open land. A 100% foreign-owned solar or wind company still cannot buy the site.

In practice a foreign RE developer secures the site in one of four ways:

1. A long-term lease of private land. Foreign investors can lease private land under the Investors’ Lease Act (RA 7652). Check the maximum term and renewal rules in the current version of the law, because they have been amended, and make sure the lease term covers the 25-year contract plus decommissioning.
2. A lease or permit over public land. Where the site is public land, the developer needs the appropriate lease or permit from the agency that administers it. Public land leases to corporations are time-limited under the Constitution.
3. A Filipino landholding company. A separate Philippine corporation, at least 60% Filipino-owned, owns the land and leases it to the project company. The lease should be registered and priced at arm’s length.
4. Easements and rights of way for transmission lines and access roads, negotiated with each owner.

For offshore wind the equivalent question is the foreshore and seabed. News reports in 2023 said the DOE would take responsibility for the foreshore lease on behalf of foreign investors in offshore wind projects, which suggests the seabed question is handled through the state rather than private landowners. Confirm the current arrangement for the specific site.

Practical entry path

For a foreign developer starting from zero, the sequence looks like this:

1. Choose the technology and site. Confirm the technology sits in the open category above. For hydro or geothermal, stop and get a nationality opinion first.
2. Incorporate a Philippine domestic corporation. A foreign investor can hold 100% of a Philippine corporation if the activity is not on the Foreign Investment Negative List. Renewable energy contracts in the covered technologies are no longer subject to the 60-40 rule. File the articles with the SEC and register with the BIR, local government and other agencies as for any company. Our 100% foreign ownership guide explains the general rules, including the paid-up capital threshold for domestic market enterprises.
3. Register with the DOE and apply for the contract. Apply for registration as an RE developer and for the RESC or REOC. If you need time for surveys and data collection, ask for the Certificate of Authority for preliminary activities.
4. Secure land and water access. Use one of the land routes above. Do not start construction on a site you only hold by a letter of intent.
5. Permits. Environmental Compliance Certificate from the Department of Environment and Natural Resources, local government permits, building permits, and any consents from affected communities or protected-area authorities.
6. Grid and offtake. Apply for grid interconnection through the National Grid Corporation of the Philippines for transmission-connected projects, or the relevant distribution utility for smaller ones. Offtake is through the Green Energy Auction Program, a bilateral contract, or the wholesale market, depending on your plan.
7. Incentives. Registered RE developers can access the incentives in RA 9513, such as the income tax holiday, through DOE registration and the Board of Investments for the usual incentive routes. Confirm the current incentive terms before you build them into your model.

Our power and energy company registration page covers the corporate setup side in more detail.

Evidence that the reform worked

The best-documented data point is offshore wind. Reports citing Manila Standard state that in October 2025 the DOE awarded nine offshore wind service contracts totaling 5.51 GW to fully foreign-owned entities, before the first offshore-wind-only auction opened. Treat this as a reported figure and check the DOE’s own list for the current contract count and capacity.

Earlier, in March 2023, Copenhagen Infrastructure Partners agreed with the Philippines to develop three offshore wind farms with a combined 2,000 MW capacity under 25-year operating arrangements, in what trade press called the first foreign-owned offshore wind projects. The same report noted that the DOE had awarded 57 offshore wind service contracts with roughly 42,000 MW of potential capacity at that time.

The auction pipeline also matters to a foreign sponsor. The fifth Green Energy Auction round (GEA-5) is the country’s first offshore-wind-only auction, offering 3,300 MW of fixed-bottom capacity with targeted commercial operations between 2028 and 2030. A Norton Rose Fulbright update dated March 2026 expected bid submission in mid-2026 and awards in the second half of 2026. Check the DOE’s current auction notices for the live status.

Edge cases a foreign founder should plan for

• Anti-Dummy exposure. Many foreign sponsors still use a Filipino partner for the land company. Keep that entity genuinely Filipino-owned and controlled. Do not use nominee arrangements to hold land or to mimic the old 60-40 structure with side letters.
• Mixed-technology projects. A solar farm with a battery is a straightforward case. A site that combines hydro or geothermal with other resources should be split into separately held assets so each one follows its own nationality rule.
• Existing 60-40 projects. If you already hold a minority stake in a project company, buying out your Filipino partners may require a change in the DOE contract holder. Talk to the DOE before the share transfer.
• Opinion risk. The reform rests on a DOJ opinion adopted in DOE rules, not on an amendment to the Constitution. A future administration or a court could read the constitutional provision differently. Lenders often price this into long-tenor deals.
• Sector rules beyond the DOE. Selling electricity at retail, operating a distribution utility and holding a franchise have their own ownership and licensing rules. Treat the RESC as the entry ticket, not the whole regulatory picture.

This guide is general information, not legal advice on your specific facts. Book a consultation if you want a fixed-scope review of your structure before you apply to the DOE.