I would like to inquire if a shareholding of the following is allowed?:

Shareholder 1 – owns 96%
Shareholder 1 – owns 1%
Shareholder 1 – owns 1%
Shareholder 1 – owns 1%
Shareholder 1 – owns 1%

Do the aforesaid percentage of shareholdings are allowed by SEC. If not allowed, may we know the allowable percentage distribution of shareholdings?

Thank you very much!

Respectfully,

Anna Ceñidoza

Anna, a corporation requires at least 5 directors each director must own at least one share, this can be even less than 1%.

A corporation in the Philippines requires at least 5 incorporators and 5 directors. 3 of the directors must be residents of the Philippines. The corporate secretary must be a Filipino citizen and resident of the Philippines.

This says that a foreigner with permanent residency can be 1 or of the 3 resident directors. However in another reply it was stated:

By John on February 15th, 2010 at 3:54 am
I have shareholding in a Philippine Corporation and I hold a permanent residency under section 13A. I have been told that I can hold my shareholding as part of the 60% Philippine Portion of the Foreign/Filipino share split.

John, foreigners can only own the portion of a business which the law allows them to own. If the law states 40% then you may own 40% of the business not more.

Please would you clarify – if a foreigner has permanent residency can he be classed as one of the 3 Filipino directors? or is a citizenship required to become one of the three Filipino directors of a corporation?

Bobby, Filipino citizenship is required to become one of the three Filipino directors of a corporation.

Is there a limit on the size of land that we can purchase?

Also, if we decide to buy, what will our lawyer’s role be? Will the lawyer help us with the Deed of Sale, Capital Gain Tax, Doc Stamp, Title Transfer, etc?

Thanks

Anne, you are a Filipino citizen therefore you may purchase any amount of land you wish.

Tim, as long as you are not a Filipino citizen you are obliged to follow the laws regarding foreign ownership of business. You can start a business and get a TIN even if you don’t have a 13A.

Lai, foreign corporations can not own land in the Philippines. They can however lease land for 25 years renewable.

I would like to ask how long does it usually take for SEC to approve the incorporation. Also, the bank is asking me for a paper stating that the business is “in process of incorporation” before they issue me the bank certificate. Can I file the SEC registration even without the bank certificate? Thank you very much.

Eve, the SEC takes around 3 to 4 weeks to issue the certificate of incorporation once all required documents are submitted. One of the required documents is a bank certificate showing that you have deposited the subscribed capital.

John, foreigners can only own the portion of a business which the law allows them to own. If the law states 40% then you may own 40% of the business not more.

We are currently running a building design consultancy and are in the process of opening a branch office in Philippines. We are currently based in UAE and would like to know if there are any agency who can do all the registration process on our behalf and what would be the expenses like since we do not have any local resources for the same.

Thank you.

Mariya, we can assist you in the registration of a branch office. I tried to email you but it bounced. Please call our office to set a meeting or give me another email address.

Maria, the answer to your question depend on what kind of business you intend to operate. You may use the email form to send the details.

Bert, there are temporary work permits available.