Foreign Ownership of a Retail Business in the Philippines (2026)

What counts as “retail trade”

Under Philippine law, retail trade means selling goods directly to the general public for personal or household use. The test is who you sell to, not what you sell. If your customer is the end consumer rather than another business that will resell or process the goods, you are engaged in retail trade and fall under the Retail Trade Liberalization Act (RTLA), Republic Act 8762, as amended.

Selling wholesale to distributors, exporting, or selling industrial goods to manufacturers is not retail trade and is governed instead by the general Foreign Investments Act (FIA) rules on foreign equity. That distinction decides which capital threshold applies to you, so it is the first thing to get right.

The ₱25 million threshold under RA 11595

Before 2022, a foreign-owned retailer had to bring in roughly US$2.5 million in paid-up capital to participate in Philippine retail. RA 11595, signed into law in 2022, replaced that with a peso-denominated floor: a minimum paid-up capital of ₱25 million for a fully foreign-owned retail enterprise.

The practical effect is significant. A foreign founder who capitalizes a retail company at ₱25 million or more can own it 100% and sell directly to Philippine consumers. Below that figure, retail trade stays reserved for Philippine nationals, and foreign equity is not permitted in that activity. There is no partial-ownership middle tier specific to retail capital in the way there once was; you either clear the threshold or you do not participate as a foreign owner.

RA 11595 also attaches a per-store investment requirement to retailers that operate more than one physical store. Each branch must meet its own minimum investment, on top of the overall paid-up capital. A single-store retailer that meets the ₱25M floor is not subject to a separate per-store figure, but a multi-branch rollout needs to budget for the per-store layer from day one.

How this connects to the FIA and the FINL

Foreign ownership in the Philippines is governed by the Foreign Investments Act and policed through the Foreign Investment Negative List (FINL) — the periodically reissued list of activities where foreign equity is limited or barred. Retail trade appears on the FINL precisely because it is conditional: open to foreigners above the RA 11595 capital threshold, restricted below it.

This is why capitalization is not just a balance-sheet decision but a licensing gate. The Securities and Exchange Commission (SEC) will assess whether your declared paid-up capital qualifies the company as a foreign retailer before it registers. Plan the capital structure and the corporate vehicle together, not in sequence — our guide to 100% foreign ownership walks through which activities allow it and the conditions attached.

The 13th FINL: EO 113, effective 2 May 2026

The current list is the 13th FINL, issued as Executive Order 113 and effective 2 May 2026. It restates the existing position rather than overturning it: retail trade below ₱25M paid-up capital remains reserved for Philippine nationals, and above it, foreign ownership is allowed under the RTLA as amended.

For a founder, the takeaway is continuity. The threshold you plan around today is the threshold the latest list confirms. Our FINL 2026 explainer breaks down what changed and what stayed the same across the negative list.

E-commerce and online retail nuances

Selling to Philippine consumers through a website, marketplace, or app is still selling to end consumers, so the retail-trade character of the activity does not disappear just because there is no storefront. The harder questions are structural: whether your model is genuinely retail (direct-to-consumer) or something adjacent such as a marketplace platform that facilitates third-party sellers, and whether you hold inventory in the Philippines or fulfill from abroad.

These distinctions change which rules bite. A pure platform that connects buyers and independent sellers is not necessarily a retailer itself, while a company importing stock and selling it to Filipino consumers under its own brand looks like classic retail and should expect the ₱25M analysis. Because the per-store concept was written for physical stores, online-only retailers should confirm how the capital and any branch requirements map to their model before committing.

Practical structuring

Most foreign retail entrants register a domestic stock corporation with the SEC and capitalize it to clear the ₱25M floor in paid-up (not merely authorized) capital — the number that has to be genuinely subscribed and paid in. Sequence the decisions in this order:

• Confirm the activity is retail trade, not wholesale or B2B, so you apply the right rule.
• Set paid-up capital at or above ₱25M, and budget the per-store layer if you plan multiple branches.
• Match the corporate vehicle and licenses to the activity before filing, since capital is a registration gate.

For a current view of the figures across business types, see our breakdown of the minimum paid-in capital for 2026.

Get the threshold and structure right at incorporation and the rest of the build — leases, hiring, import permits — follows cleanly. Get it wrong and you may have to recapitalize or restructure before you can legally sell a single unit. Chamberlain helps foreign founders make that call before the first peso goes in.