Entity types
Five entities cover most foreign investor cases. Domestic Corporation, registered with the Securities and Exchange Commission (SEC), is the standard choice for foreign investors who want full operational presence. Allows up to 100% foreign ownership in most industries. One Person Corporation (OPC), introduced under the Revised Corporation Code (RA 11232) in 2019, is a single-shareholder corporation suitable for solo founders. Branch Office registers a foreign parent in the Philippines but treats Philippine activities as the foreign parent’s, with Philippine tax on Philippine-sourced income. Representative Office is limited to information dissemination and liaison; cannot earn revenue. Regional Operating Headquarters (ROHQ) is a specialized regional entity with specific tax treatment, narrower than it used to be after CREATE Act.
The Foreign Investment Negative List
The Philippines limits foreign equity in certain industries through the Foreign Investment Negative List (FINL), updated periodically by the National Economic and Development Authority. List A contains sectors restricted by the Constitution and specific laws (e.g., mass media: 0% foreign equity, advertising: 30% foreign, public utilities: 40% foreign). List B contains sectors restricted for security or public health reasons. Most service businesses, IT-BPM, manufacturing, and trading allow 100% foreign equity. The first job in any incorporation is mapping the proposed business activities to the FINL to confirm the foreign-ownership ceiling.
Minimum capitalization
For a fully foreign-owned domestic corporation, the standard minimum paid-up capital is USD 200,000. This drops to USD 100,000 if the business directly employs at least 50 Filipinos or uses advanced technology as determined by the Department of Science and Technology. Domestic corporations with at least 60% Filipino equity have no minimum paid-up capital under the FIA. PEZA-registered export enterprises have separate capitalization rules.
The actual registration process
The sequence is well-known and time-bound. SEC name verification through the SEC’s online platform (typically same-day). Drafting of the Articles of Incorporation and Bylaws, including specifying capital structure, principal office, and primary purpose. SEC submission (online via eSPARC or in person), followed by SEC review and issuance of the Certificate of Incorporation. BIR registration for Tax Identification Number (TIN), books of account stamping, and Authority to Print receipts/invoices. LGU registration: Mayor’s Permit (renewed annually), Barangay clearance, Sanitary and Fire permits. Statutory bodies: SSS (Social Security System), PhilHealth, Pag-IBIG (HDMF), and DOLE registration for hiring.
Timeline and cost
End-to-end timeline is typically 4 to 12 weeks for a domestic corporation, depending on SEC processing speed and the complexity of the LGU/BIR steps. Government fees alone run roughly PHP 10,000 to 50,000 depending on capitalization (SEC filing fees scale with authorized capital stock). Professional fees from a corporate services provider typically add PHP 50,000 to 300,000 for end-to-end support including the post-SEC steps.