18/08/2026
FEATURE | Structuring AI Data Centre Investments in the Philippines
The rapid rise of artificial intelligence is transforming global demand for digital infrastructure. Hyperscale and high-performance data centres—capable of supporting AI computing, cloud services, and large-scale data processing—are becoming increasingly critical to the digital economy.
The Philippines is positioning itself to participate in this growth. With AI and data science identified as priority investment areas under the 2026 Strategic Investment Priority Plan, qualified projects may potentially access fiscal and non-fiscal incentives.
From an investment structuring perspective, an important point is that the operation of an AI data centre is generally not a nationality-restricted activity. A Philippine company established to develop and operate a data centre may therefore, in principle, be wholly foreign-owned.
The more significant nationality issues arise from the assets and resources supporting the project—particularly land ownership and the appropriation of water from natural sources, which remain subject to constitutional and statutory restrictions.
This does not prevent substantial foreign investment. Rather, it makes thoughtful structuring essential.
Among the structures that investors may consider are:
1. Philippine majority-owned integrated company
A single Philippine corporation satisfying the applicable nationality requirements may own the land, hold the necessary water rights or permits, and operate the data centre. Foreign investors may participate up to the permitted level, supported by carefully structured governance and minority protection rights consistent with Philippine law.
2. Foreign-owned OpCo with a Philippine majority-owned PropCo
A more flexible alternative separates the unrestricted operating business from nationality-restricted assets. A wholly or substantially foreign-owned OpCo may develop and operate the AI data centre, while a qualified Philippine PropCo owns the land and leases it to the operating company. Water rights and related infrastructure may likewise be structured through appropriately qualified entities.
The OpCo-PropCo model can offer greater flexibility in foreign ownership, project financing, risk allocation, real estate monetisation, and eventual exit strategies. Depending on the project and regulatory requirements, the real estate component may also potentially be positioned for future REIT participation or other capital-recycling structures.
The key takeaway: Philippine nationality restrictions need not be a barrier to major AI infrastructure investment. With the right legal and commercial architecture, investors can achieve meaningful foreign participation while complying with constitutional, corporate, property, water, tax, and regulatory requirements.
At Sarmiento Loriega Law Office (SL Law), we continue to examine the legal structures that can support the next generation of technology, infrastructure, and foreign investment in the Philippines.
Read the full analysis by Maria Elizabeth Peralta-Loriega, Co-Managing Partner and Co-Founding Partner of SL Law.
The rapid growth of artificial intelligence has accelerated global demand for digital infrastructure, particularly hyperscale...