What Are the Requirements to Open a Company in the Philippines: Whether You Can, Which Entity, and What to Prepare

Can Foreigners Open a Company in the Philippines: Check the Negative List and Fix the Foreign Share First

Foreigners can open a company in the Philippines, and most industries need no Filipino shareholder, but the first step is always to check how your industry is treated on the foreign investment negative list. That answer decides whether you can own 100 percent and whether you need a local partner; every later condition follows from it.

• Industries not on the list: businesses such as manufacturing, trading, IT-BPM, consulting and food service can be wholly foreign-owned.
• Industries on the list: mass media, small-scale retail, small-scale mining, private security and others are either reserved for Filipinos or capped for foreign ownership. Specific industries and caps follow the current 13th Regular Foreign Investment Negative List.
• Industries under special laws: banking, insurance, financing and lending, securities, manpower agencies, education, healthcare and public utilities must also meet their own regulators' entry and capital rules, often with ongoing obligations.

One line must not be crossed: using Filipino nominees to hold shares to get around foreign ownership limits engages the Anti-Dummy Law and carries criminal exposure, and if you fall out with the nominee, your private agreement offers little protection. If the business genuinely needs a local shareholder, find, vet and contract with a real partner. For how to check item by item, see the limits of 100 percent foreign ownership.

Once You Can Open, Which Kind: Stock Corporation, One Person Corporation, Branch or Representative Office

After confirming you can open, you choose an entity; set-up rules, liability and ongoing compliance differ widely, and the wrong choice often means starting over.

• Domestic stock corporation: a separate legal person whose shareholders are liable up to their investment; the choice of most businesses. It needs a board and statutory officers including a corporate secretary and treasurer.
• One Person Corporation (OPC): set up with a single shareholder, who may be a natural person, trust or estate, but a corporation cannot be the sole shareholder, so a wholly owned subsidiary of a parent must be an ordinary stock corporation. An OPC needs no board but must name a nominee and an alternate nominee so the company does not stall if something happens to the shareholder.
• Branch office: an extension of the foreign parent that may earn revenue, with the parent directly liable; it receives a license to do business rather than a certificate of incorporation.
• Representative office: limited to liaison, promotion and branding, may not earn revenue in the Philippines, and is funded by remittances from the parent.

A sole proprietorship is only available to Filipino individuals, so foreign investors usually go the company route. Once the entity is chosen, the order of visits to the Securities and Exchange Commission, the tax bureau and the city hall follows from it.

What Are the Requirements to Open a Company in the Philippines: Shareholders, Directors, Officers and Registered Address

With industry and entity settled, assemble the people and place requirements; missing any one sends the filing back at name verification or articles review.

• Incorporators and shareholders: 1 to 15 incorporators, who may be individuals, partnerships, associations or corporations; individuals must be of legal age and each incorporator subscribes to at least one share. The old minimum of five incorporators was removed when the Revised Corporation Code took effect.
• Directors: no more than fifteen, each holding at least one share in their own name; the old rule that a majority of directors be Philippine residents has been removed, so an all-foreign board is legally possible. Every director and shareholder first needs a Philippine individual tax identification number, which foreigners can apply for through a tax bureau form.
• Statutory officers: the president must also be a director; the treasurer must reside in the Philippines, of any nationality; the corporate secretary must be a Filipino citizen residing in the Philippines. The president cannot also be the secretary or the treasurer. In an OPC the single shareholder cannot be the corporate secretary and may act as treasurer, but must post a bond as the Securities and Exchange Commission requires.
• Registered address: must state unit number, street, barangay, city or municipality and province; a vague entry such as Metro Manila is not accepted, and a lease or title must be attached. The commission checks only format and documents; the on-site check comes from fire and sanitation inspections when the city issues the business permit.

Foreign directors who actually hold paid positions in the Philippines also need an AEP and a 9G work visa, a separate line from incorporation. For the duties of secretary and treasurer and the risks of nominee services, see how to appoint a corporate secretary and treasurer.

How Much Capital Do You Need to Open a Company in the Philippines: No Single Figure, Four Variables Set the Tier

There is no capital figure that applies to every Philippine company. The Revised Corporation Code sets no minimum for ordinary stock corporations; thresholds come from variables such as foreign ownership, special industry laws, and domestic versus export sales. This section covers the mechanism only; specific thresholds follow the agencies' current rules.

• Three layers of capital: authorized capital is the ceiling the articles allow to be issued; subscribed capital is what shareholders commit in writing; paid-up capital is money actually put into the company and provable. Thresholds look at paid-up capital. The higher the authorized capital, the higher the capital-based government charges at set-up, so there is no need to inflate it.
• Foreign ownership: companies above the legal foreign ownership dividing line that mainly sell to the domestic market face the minimum paid-up requirement under the foreign investment law; this is where the threshold matters most.
• Export arrangements: foreign companies that mainly sell abroad and meet the legal export ratio are not subject to the same domestic-market threshold; those that persistently fall short may be treated as domestic-market enterprises.
• Reductions and special laws: advanced technology or direct local hiring at a set scale can lower the threshold; retail, finance, manpower agencies and other industries have their own laws setting thresholds, which may need to be maintained throughout operations.

Paid-up capital is evidenced by the treasurer's affidavit and bank certification, and foreign investors should keep inward remittance records; if you want to remit dividends or repatriate capital through the banking system later, arrange foreign investment registration at the time the money comes in. The Philippines is not a system where subscribing means you need not pay; operating below the threshold and topping up later means operating in breach. For matching authorized, subscribed and paid-up capital, see Philippine company capital requirements.

What Tax Registrations and Permits Are Needed After Opening a Company in the Philippines

A certificate of incorporation from the Securities and Exchange Commission only means the company exists in law; it cannot yet invoice and operate lawfully. Bank capital deposit, tax registration and local business permits still follow, plus social insurance registration once you hire.

• Bank account and capital inflow: corporate accounts need incorporation documents and directors' identity papers, and most banks require signatories to appear for identity checks.
• Tax bureau registration: obtain the company tax number and certificate of registration, register books of account and apply for invoicing authority. Monthly, quarterly and annual filings follow; with no transactions you still file a nil return, which is itself a filing.
• Local business permit: first obtain the barangay-level clearance, then apply to the city for the business permit, with fire, sanitation and other inspections. The permit is renewed every year, usually based on the prior year's gross sales, which must match what was reported to the tax bureau.
• Annual obligations to the commission: submit financial statements and the General Information Sheet (GIS) each year; companies above the size threshold need statements audited by an independent CPA, and the GIS must be filed even if nothing has changed.

The three lines need each other's documents, so the order cannot be reversed. Leaving a registered company idle also has consequences: if it does not formally commence business within five years of incorporation, its certificate is deemed revoked. For the annual cycle and remedies for late filings, see what a Philippine company must do every year.

Open a Company in the Philippines Yourself or Use an Agent: Steps Shareholders Must Do Personally

You can run the whole process yourself, but most foreign owners hand drafting and agency visits to professionals; either way, some steps can only be done by the shareholders or company officers in person.

• Owners or company only: decide the industry positioning, shareholding structure and entity type; sign the articles and other documents, with notarization and authentication where signed abroad; the treasurer personally signs the capital affidavit; remit paid-up capital from the shareholder's or parent's own account; complete bank identity checks; choose a corporate secretary and treasurer you can trust.
• Can be delegated: name verification and reservation, drafting articles and by-laws, online filing, tax registration and invoicing authority, business permit applications, and later monthly and annual filings and GIS submission.

Before delegating, ask:

1. For my industry and shareholding, how were the foreign ownership share and capital tier determined, and on which list or law.
2. Which stage the quote covers: only up to the certificate of incorporation, or including tax registration and the business permit.
3. Whether every government fee comes with an official government receipt, listed separately from service fees.
4. Who serves as corporate secretary, and whether custody of the seal, signing scope and replacement are set out in a written agreement.
5. Who handles filings after opening and how responsibility for late filings is split. Approval rests with the agencies, so be wary of very confident promises on timing and outcome.

This article is general information, not legal or tax advice; requirements follow the current publications of the Securities and Exchange Commission, the tax bureau, local governments and investment agencies, and individual cases should be taken to a licensed lawyer or accountant.

Not yet sure whether your industry allows full foreign ownership or which capital tier applies: should you hold off on signing an office lease? → Yixing company setup and business landing