How the IRR allows the President to shorten lease terms for “vital services” or “critical infrastructure,” undermining long-term certainty.
The strict capital-infusion requirements for tourism projects and why the three-year deadline poses serious compliance risks.
Automatic (“ipso facto”) lease termination powers granted to government agencies and their impact on delayed or paused projects.
Why lease renewal is uncertain and dependent on undefined “social and economic contributions” decades into the investment.
Understand the Risks Behind 99-Year Foreign Leases
Explore how the implementing rules of the 99-year lease law affect foreign investors, from shortened lease terms to automatic termination and renewal uncertainty.
This section addresses common concerns raised by businesses, legal teams, and finance professionals looking for clarity on complex issues and get a better understanding of key concepts.
Does the law guarantee a full 99-year lease for foreign investors?
No. While the law sets a 99-year maximum, the IRR allows the President to impose shorter lease periods for investments affecting national security or critical infrastructure.
Can a foreign lease be automatically terminated?
Yes. The IRR grants agencies authority to cancel leases automatically if an investment is deemed “withdrawn,” including failure to operate for three consecutive years.
Is lease renewal automatic after 99 years?
No. Renewal depends on mutual agreement and proof of “social and economic contributions,” a requirement left undefined and subject to administrative discretion.
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