Last reviewed October 7, 2026 · By the NYBACS advisory team
Short answer
Foreign investors usually incorporate in the Philippines as a domestic stock corporation registered with the Securities and Exchange Commission (SEC), or register a branch or representative office of their overseas company. Foreign ownership above 40% in a business serving the domestic market generally requires paid-in capital of at least US$200,000 under the Foreign Investments Act, reducible to US$100,000 in specific cases, and some sectors are restricted by the Foreign Investment Negative List.
Key takeaways
- The SEC registers corporations, branches and representative offices; the BIR, the city or municipal government and the barangay issue the registrations needed to operate.
- Domestic market enterprises more than 40% foreign-owned generally need at least US$200,000 paid-in capital; US$100,000 may apply for advanced technology, endorsed startups, or companies whose direct employees are majority Filipino with at least 15 Filipino hires.
- Export enterprises are treated differently, and the Foreign Investment Negative List restricts or caps foreign equity in specified sectors.
- Under the Revised Corporation Code, the corporate secretary must be a Filipino citizen resident in the Philippines and the treasurer must be a resident.
- One Person Corporations are allowed, but foreign individuals forming one remain subject to the Foreign Investments Act capital rules.
Philippines at a glance
| Common entity for foreign owners | Domestic stock corporation or One Person Corporation; branch or representative office of a foreign company |
|---|---|
| Company registry | Securities and Exchange Commission (SEC) |
| Foreign ownership | Up to 100% in many activities; >40% foreign domestic-market enterprises generally need US$200,000 paid-in (US$100,000 in specific cases); Negative List limits apply |
| Local director / resident requirement | Corporate secretary must be a resident Filipino citizen; treasurer must be resident; directors need not be resident |
| Registered office | Philippine principal office address, which determines the LGU and BIR district |
| Key tax registrations | BIR certificate of registration and books; VAT (12%) above PHP 3 million; SSS, PhilHealth, Pag-IBIG |
| Recurring compliance | SEC general information sheet and audited financial statements, BIR returns, January mayor's permit renewal |
| Typical setup timeline (indicative) | One to a few weeks for SEC registration; one to three months to be fully operational |
Indicative only. Rules, filings, fees, ownership restrictions and timelines vary and change — confirm the current position before acting.
Corporation, branch, representative office or regional HQ?
| Option | Can it earn revenue? | Key point |
|---|---|---|
| Domestic stock corporation | Yes | Separate entity; ownership limited by the Negative List and capital rules |
| One Person Corporation | Yes | Single shareholder; still subject to foreign capital rules |
| Branch office | Yes | Licence to do business from the SEC; the parent is liable; capital rules apply to domestic-market branches |
| Representative office | No | Promotion and liaison only, funded by inward remittances from the parent |
| Regional or operating HQ | Limited, depending on type | For multinationals supervising regional affiliates |
Most foreign SMEs choose a domestic corporation. A branch suits companies whose contracts and credentials sit with the parent. A representative office suits market testing, but it cannot invoice Philippine clients.
Step-by-step: SEC registration to permits
- Check the Negative List and capital rules for each activity and decide whether the business is domestic-market or export-oriented.
- Verify and reserve the corporate name with the SEC.
- Prepare articles of incorporation and by-laws, the incorporators' and directors' details, and the treasurer's and other required undertakings.
- Deposit and document capital. Foreign capital is usually remitted from abroad and converted through a Philippine bank so it is properly evidenced as foreign investment.
- Register with the SEC online and receive the certificate of incorporation.
- Local permits: barangay clearance, then the mayor's or business permit from the city or municipality where the office sits.
- BIR registration: obtain the certificate of registration, register books of accounts and invoicing.
- Employer registrations: SSS, PhilHealth and Pag-IBIG, and alien employment permits for foreign staff.
Indicatively, SEC registration can take one to a few weeks once capital and documents are ready; local permits, BIR registration and banking usually bring overall readiness to one to three months.
Officers, documents and authentication
Directors do not need to be Philippine residents, although nationality limits apply in partly nationalised sectors. The corporate secretary must be a Filipino citizen resident in the Philippines and the treasurer must be resident, so foreign-owned companies typically appoint a local professional or employee.
Corporate shareholders provide a certificate of incorporation, articles, a board resolution approving the investment and naming nominees, and beneficial ownership details. Individuals provide passports and tax identification. The Philippines has been a party to the Apostille Convention since May 2019, so documents from Convention countries are apostilled. The SEC also requires disclosure of beneficial owners.
Tax, invoicing and local registrations
Corporations generally pay 25% corporate income tax, or 20% for smaller corporations meeting net taxable income and asset tests. VAT is 12%, with registration required when gross sales exceed PHP 3 million a year. The Ease of Paying Taxes Act changed invoicing rules, so check current BIR requirements for invoices and books before trading.
The mayor's permit is renewed every January, and many cities set local business taxes based on gross receipts. Incentives through the Board of Investments, PEZA or other investment promotion agencies can change the tax position for registered activities.
Banking and KYC in the Philippines
Banks typically require the SEC certificate, articles and by-laws, board resolution naming signatories, the general information sheet once filed, beneficial-owner identification and local permits. They expect signatories to appear in person and often prefer a resident signatory. Because capital inflows are also documented for foreign-investment registration, coordinate the remittance with the bank before funds move. Account approval always rests with the bank.
Ongoing compliance and whether the Philippines is right for you
Recurring obligations include filing the general information sheet with the SEC within 30 days of the annual meeting, filing audited financial statements with the SEC and BIR, filing monthly or quarterly tax returns and the annual income tax return, renewing the mayor's permit each January, and keeping SSS, PhilHealth and Pag-IBIG contributions current.
The Philippines suits English-speaking service operations, BPO and shared services, and consumer businesses targeting its large domestic market. For a holding or regional HQ, Singapore is usually simpler. Vietnam is the common comparison for manufacturing cost.
Common mistakes to avoid
- Setting up a majority foreign-owned domestic-market company without meeting the paid-in capital threshold.
- Remitting capital informally so it is not properly documented as foreign investment.
- Appointing a non-resident or foreign corporate secretary.
- Assuming SEC registration alone allows trading, before barangay, mayor's permit and BIR registration.
- Missing the January mayor's permit renewal or the general information sheet deadline.
- Using a representative office to invoice local clients.
Documents and records to prepare
- Passports and tax IDs of incorporators and directors
- Parent certificate of incorporation, articles and board resolution, apostilled
- Beneficial ownership details
- Proof of inward remittance and bank certificate for capital
- Office lease and landlord documents for local permits
- Details of the resident Filipino corporate secretary and resident treasurer
NYBACS 360° support
How NYBACS helps
- Checks your activities against the Negative List and Foreign Investments Act capital thresholds.
- Coordinates our Philippine partner on SEC registration, local permits and BIR registration.
- Plans capital remittance so it is documented correctly for foreign-investment purposes.
- Arranges resident corporate secretary and treasurer solutions through local professionals.
- Builds the SEC, BIR and mayor's permit compliance calendar.
Frequently Asked Questions
Can a foreigner own 100% of a Philippine corporation?
Yes, in many sectors, if the Negative List allows it and the capital rules are met. A domestic-market enterprise more than 40% foreign-owned generally needs at least US$200,000 paid-in capital, or US$100,000 in specific cases.
Does an export business need US$200,000?
Export enterprises are treated differently under the Foreign Investments Act. Confirm that your revenue profile genuinely qualifies before relying on it.
Can I be the corporate secretary?
Not as a foreigner. The corporate secretary must be a Filipino citizen resident in the Philippines. Directors, however, can be non-residents.
Is a One Person Corporation available to foreigners?
Yes, but the foreign capital rules still apply, and a One Person Corporation must appoint a nominee and an alternate nominee.
Which permits are needed besides SEC registration?
Barangay clearance, the mayor's or business permit, BIR registration and employer registrations with SSS, PhilHealth and Pag-IBIG. Some activities need sector licences too.
