The Philippines is currently one of the most sought-after investment locations particularly as far as investment in properties is concerned. And since a good portion of investors in Philippine properties comes from the foreign sector, I make it a point to advise my foreign clients to be aware of the requirements of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines or BSP) in the area of their investments, particularly in condominium units, in the Philippines.
Foreigners who invest in condominium units are required to register their property investment with the BSP. The rationale behind this lies in the BSPs objective of controlling foreign exchange, thus, protecting the peso from value fluctuations. Foreigners, especially those who are buying properties which they plan to lease out or sell in the future are advised to take this extra step of registering with the BSP to avoid having problems with the remittance of their rental income or sales proceeds later on.
Since purchase of foreign currency is regulated in the Philippines, converting your earnings from your Philippine property investments to your own currency may be allowed only if your property is registered with the BSP.
For example, foreign investor A wants to purchase a condominium in the Philippines with the intention of leasing it out for rental income. Once he has purchased the unit, he must register his investment with the BSP which will, in turn, issue him a Bangko Sentral Registration Document (BSRD). This registration document will enable the foreign investor to convert his peso-denominated rental income to his home country’s currency later on when he decides to have this remitted to his bank account in his home country.
Registration is free and entails the submission of the following documents to the BSP:
1. Copy of duly accomplished Certificate of Inward Remittance (CIR) of foreign exchange
2. Condominium Certificate of Title (CCT) in the name of the foreign investor
3. Copy of the Deed of Absolute Sale (DAS) / Contract to Sell (CTS) of condominium unit to the foreign investor
4. Certification from the owner/developer/administrator/property manager of the condominium attesting to the compliance with the foreign ownership limitation under existing Philippine laws.
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