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Republic Act 12252: Unlocking 99-Year Land Leases and Foreign Capital

  • September 25, 2025

Republic Act 12252: Unlocking 99-Year Land Leases and Foreign Capital

By: Atty. Francesca Marie V. Flores

Republic Act 12252 (RA 12252), signed into law by President Ferdinand R. Marcos Jr. on September 3, 2025, amends the 1993 Investors’ Lease Act (RA 7652), which only allowed a 50-year lease term renewable once for an additional 25 years.

The new law liberalizes the lease of private lands by foreign investors. It extends the stability of long-term lease contracts—from 50 years to up to 99 years—for industrial estates, factories, agro-industrial ventures, tourism, agriculture, agroforestry, ecological conservation, and other related priority economic ventures.

Its main objective is to promote the entry of foreign investors by extending long-term lease contracts and fostering a more stable and secure investment climate.

Under the amended law, foreign investors with duly registered projects are now permitted to enter into lease agreements for private lands for up to 99 years. However, based on the recommendation of relevant government agencies, the President of the Philippines may impose a shorter lease term for investors involved in vital services or industries deemed critical infrastructure, in the interest of national security or in line with government-identified priorities for national development.

Renewal of these types of lease contracts may be done through mutual agreement, provided that the foreign lessee sufficiently proves a positive social and economic impact in the country.

Under the law’s limiting provisions, leased lands shall be dedicated solely to the approved investment project and should correspond appropriately to project requirements. Notably, the use of land for purposes other than what has been approved, and withdrawal of investment, shall warrant the ipso facto termination of the lease contract without prejudice to the right of the lessor to be compensated for any damages it has suffered as a result.

The law also mandates that leases be registered with the Registry of Deeds where the property is located and recorded on the property’s title to ensure they are enforceable against third parties. Such registered contracts may not be altered, modified, or canceled, unless through formal legal proceedings.

In the case of tourism projects, the lease of private lands is restricted to those with a minimum investment of $5 million, with at least 70% of the investment to be injected into the project within three years from the date of signing the lease contract. The Board of Investments (BOI), the Fiscal Incentives Review Board (FIRB), and other investment promotion agencies may require lessees to justify any delays if projects do not commence within the three-year period. Contracts may even be terminated should the investor fail to commence the project within the same timeframe.

Further, other violations of RA 12252, such as exceeding the 99-year limit, illegal land use, or unauthorized expansion of leased areas, shall render these types of lease agreements null and void. Under the amended law, the penalties for such violations have been increased from ₱100,000 – ₱1 million to ₱1 million – ₱10 million, along with possible imprisonment of six months to six years, at the court’s discretion.

A key feature of the new law permits foreign lessees to sublease the property upon the lessor’s consent, as long as the main lease contract does not forbid such an arrangement. All sublease agreements must be registered with the Registry of Deeds and duly annotated on the property’s title.

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About Us

FNS has been providing top quality legal service in the Philippines for the last twenty five years.  We maintain a visible presence in the Makati Central Business District with our headquarters in the main hub of business in Ayala Avenue and a liaison office in Hong Kong.

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CONTACT US

23rd Floor, Multinational Bancorporation Centre, 6805 Ayala Avenue, Makati City 1226 Philippines

  • info@fnslaw.com.ph
  • (632) 8812-8670
    (connecting all departments)
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Our Expertise

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