On 10 September 2026, the European Union and Spain joined the Luzon Economic Corridor. At the first LEC Investment Forum in Manila, Finance Minister Frederick Go, co-chair of the initiative, presented an initial portfolio of 38 projects with a total investment volume of more than 20 billion US dollars – covering energy and water, transport and logistics, digital connectivity, and advanced manufacturing. The trilateral project between the Philippines, the United States and Japan, launched in April 2024, has thus expanded to include 13 partners.

Germany is not among them. Denmark, France, Italy, Sweden, Spain and the United Kingdom are represented bilaterally, whilst Germany is represented only indirectly via the EU. This is not an exclusion, but it does change the way in which German companies gain access to the corridor.

What the corridor is – and what it is not

Geographically, the LEC describes the Subic–Clark–Manila–Batangas axis: two deep-water ports, two airports and the capital region in between, which, according to the US Trade Representative’s Office, together account for well over half of the country’s economic output. The project portfolio includes the Subic–Clark natural gas ecosystem, Sangley Point Airport and the operation of the North–South Commuter Railway.

Legally, the Corridor is neither a special economic zone nor an international treaty, but rather a coordination platform under the umbrella of the Partnership for Global Infrastructure and Investment, with working groups on transport, energy and digital infrastructure. It does not create its own procurement, company or investment law. Anyone seeking contracts or equity stakes here remains subject to Philippine law – or to the regulations of the respective funding body. This may sound self-evident, but it is regularly obscured in presentations.

The German approach goes via Brussels – and via Clark

The EU is not providing any new funding, but is aligning existing Global Gateway programmes with the corridor’s priorities: the Green Economy Programme, worth over 60 million euros, and a Digital Economy Package worth over 20 million euros. For German companies, this is effectively the most important aspect of the partnership: they are eligible to participate in EU-funded procurement without the need for a separate German partnership.

The fact that German industry is already building within the corridor is demonstrated by the largest German project in the country: on 6 August 2026, Lufthansa Technik broke ground in Clark on a second base maintenance facility – 157,000 square metres, around 1,200 skilled jobs, with operations set to begin in 2028. Bilateral trade in goods stood at around 7.3 billion US dollars in 2025; in the first four months of 2026, German exports rose by about a third to 768 million US dollars. However, the AHK survey from spring 2026 paints a different picture: two-thirds of respondents cite energy costs as the greatest burden, whilst only a quarter are planning to increase their investments.

Four legal issues to consider before entering the market

1. Ownership limits. The Public Service Act, as amended by Republic Act No. 11659 (2022), has excluded airports, railways, toll roads and telecommunications from the definition of ‘public utility’; full foreign ownership is permitted in these sectors.For electricity distribution and transmission, pipelines, water and sewerage systems, seaports and public passenger transport, the 60/40 rule remains in place – meaning a significant proportion of what is being built within the corridor. In addition, there are two caveats that are often overlooked: in the case of ‘critical infrastructure’, foreign participation is limited to 50 per cent without guaranteed reciprocity, and entities under the control of a foreign government are not permitted to participate – which is not merely a theoretical issue for companies with federal or state ownership.
2. Award of contracts. The New Government Procurement Act (Republic Act No. 12009) links public procurement to the domestic preference provision of the Tatak-Pinoy Act. As a rule, foreign bidders are only considered if nothing comparable is available domestically, if there is an obligation under international law, or if reciprocity is demonstrated. Realistic options therefore include donor-funded lots, the role of the subcontractor, and the PPP procedure under Republic Act No. 11966, which involves unsolicited bids and the ‘Swiss Challenge’ process.
3. Incentives and location selection. CREATE MORE (Republic Act No. 12066) and the Strategic Investment Priority Plan 2026 – infrastructure, energy transition, data centres – often have a greater impact on economic viability than the tender price, particularly through the full deduction of electricity costs.
4. The security policy dimension. The corridor includes an “Economic Security Zone” of around 4,000 acres planned in collaboration with the United States under the Pax Silica initiative, which targets critical minerals, semiconductors and electronics. Germany is not among the signatory states that have been disclosed to date. Anyone wishing to manufacture there must expect access to be subject to supply chain and security requirements – in addition to export controls, supply chain due diligence and CBAM.

Five recommendations

1. Plan access via EU instruments. Global Gateway and Team Europe funding are the open channels for German bidders; the local tendering rules, not Philippine procurement law, will then determine the eligibility criteria.
2. Clarify eligibility for participation before submitting a tender. The classification of the project as a ‘public utility’ or ‘critical infrastructure’ determines the permissible participation quota – and thus the entire structure.
3. Obtain proof of reciprocity at an early stage. It is a document, not an argument to be put forward during the proceedings.
4. Decide on incentives and location together. Registration, registered activities and reporting obligations underpin the tax benefits; making corrections retrospectively is costly.
5. Monitor the EU–Philippines Free Trade Agreement. Negotiations have been ongoing since they resumed in March 2024, most recently in a seventh round in the summer of 2026; a chapter on public procurement would fundamentally alter the starting position for German bidders.

The accession of the EU and Spain does not turn the Luzon Economic Corridor into a European project, but it does make it one in which European companies can participate even without a special bilateral relationship. Whether this succeeds will not be decided in Manila, but depends on the structuring – and that begins earlier than most people realise.

ADWA combines German legal advice with a local presence at eleven Asian locations. I am, of course, available to answer any queries you may have.

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Your point of contact in the Philippines: Lutz Kaiser

Villanueva Gabionza & Dy Law Offices

20th/F Corporate Center
139 Valero St., Salcedo Village
Makati City 1227, Philippines

CELL: +63 995 985 4957
TEL: +63 2 8813 3351

www.vgdlaw.ph
kaiser@adwa-law.com

In an order dated 11^th September 2026, the National Company Law Tribunal rejected the claim of the liquidator of Jet Airways (India) Ltd. for a substantial refund from planemaker Boeing for advances paid on planes never delivered. Boeing first suspended and then terminated the purchase agreements over payment delays, while Jet Airways went into insolvency proceedings.

Boeing’s insolvency claims, which they said were reduced in consideration of the advance payments received, were largely admitted in the insolvency proceedings. Now the liquidator sought a refund of the advance payments under insolvency law. Yet the NCLT turned him down, holding that jurisdiction, applicable law and the merits of the case would need to be decided on the basis of the purchase agreements—which neither side had yet produced—and required a fully fledged civil trial incl. the taking of evidence, outside insolvency jurisdiction. – The decision is commendable as it strengthens the reliability of contractual agreements during insolvency proceedings.

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Your point of contact in India: Dr. Jörg Schendel

Suman Khaitan & Co.

W-13, West Wing, Greater Kailash Part-II
Delhi 110048, Indien

CELL:     +91 97 11 08 04 03
TEL:       +91 11 49 50 15 00

www.sumankhaitanco.in
germandesk@sumankhaitanco.in
schendel@adwa-law.com

Malaysia’s Budget 2027, presented on 9 October, contains two changes that directly affect assignments from Germany, Austria and Switzerland:

1. Spouses will be allowed to work

From 1 January 2027, spouses of expats with a Category I Employment Pass who hold a Dependant Pass are to be allowed to work in Malaysia – subject to conditions that have yet to be determined.

Anyone sending executives to Kuala Lumpur, Penang or Johor knows the problem: a partner’s career is one of the most common reasons for declining an assignment or ending it early.

2. The top tax rate will apply sooner

The tax rate of 30% currently applies only to taxable income above RM 2 million. In future, it is to apply from RM 1 million. For income between RM 1 million and RM 2 million, the rate will therefore rise from 28% to 30%. This means up to RM 20,000 in additional tax per year. Under net salary guarantees or tax equalisation arrangements, the company bears these costs – and even more once the gross-up is taken into account.

What companies should do now:

• Review assignment policies: Should support for a partner’s career become part of the relocation package?
• Recalculate tax equalisation budgets for 2027 if your expatriates earn more than RM 1 million.
• Wait for the immigration authorities’ detailed rules before making specific commitments to employees.

Important: These are still budget proposals. They will only become legally binding through the Finance Act and the implementing regulations.—

Your point of contact in Malaysia: Dr. Harald Sippel

Aqran Vijandran

5-2A, Medan Klang Lama 28, 419, Jalan Klang Lama
Wilayah Persekutuan
Kuala Lumpur, Malaysia

TEL:      +60 1 8211 4958

www.aqranvijandran.com
sippel@adwa-law.com