« | BC Philippine Lawyer | »

Foreign Ownership of Corporations in the Philippines

Posted by Dave on Sunday, September 21st, 2008

The Foreign Investment Act (R.A. 7042, 1991, amended by R.A. 8179, 1996) liberalized the entry of foreign investment into the Philippines. Under the Act, foreign investors are generally treated like their domestic counterparts and must register with the Securities and Exchange Commission (SEC) (in the case of a corporation or partnership) or with the Department of Trade and Industry’s Bureau of Trade Regulation and Consumer Protection (in the case of a sole proprietorship).

Businesses with Foreign Investment Restrictions

Within the 1991 Foreign Investment Act (FIA) there are two negative lists also know as the “Foreign Investment Negative List” which defines the foreign investments which are limited or restricted by the constitution and specific laws. Negative List A & Negative List B

Domestic Corporations

The general rule of ownership for a Philippine Domestic Market Enterprise is 60% Filipino ownership and 40% foreign ownership of a business.**

More than 40% and up to 100% foreign ownership of a Domestic Market Enterprise is allowed as long as the paid-in capital is a minimum of USD 200,000.00. Employing a minimum of 50 direct employees or using advanced technology may allow a paid-in capital of less than USD 100,000.00 (R.A. 7042 as amended by R.A. 8179).**

Retail Trade Enterprises

100% foreign ownership is allowed for Philippine retail trade enterprises: (a) with paid-up capital of USD 2,500,000.00 or more provided that investments for establishing a store is not less than USD 830,000.00; or (b) specializing in high end or luxury products, provided that the paid-up capital per store is not less than USD 250,000.00 (Sec. 5 of R.A. 9762). No foreign equity is allowed in Retail Trade Enterprises with less than the above mentioned capital.

Export Businesses

An export enterprise is defined as a business who exports at least 60% of its output.
Export Business Enterprises may be 100% fully foreign owned and may file with the SEC for an exemption of the paid-up capital requirement of USD 200,000.00.

KPO, BPO, Back Office and call centers are considered Export Enterprises.

** Unless otherwise indicated in the Philippine Foreign Investment Negative List

Comments

By James Kovalsky on July 27th, 2009 at 4:50 pm

I am a Canadian Citizen and would like to invest 300,000 USD in a franchised fast food business in the Philippines. Could I own 100% of this business. Would I require inporporation in the Philippines. What would the options be for securing the land for this investment.

James, foreigners are not allowed to own a retail business of that size and may not own land in the Philippines. For more information use the contact form to get in touch.

I’m a dual citizen married to an American. We’d like to start a business school and convenience store with a pharmacy. Can we incorporate on a 50-50? If not, tell me how we can incorporate.

Eva, foreigners can not be owners of schools and retail businesses. Yous husband can not be a shareholder but, indirectly he is a owner as the corporation will conjugal property.

I’m American citizen. Can i have corporation engaging in distribution of luxury goods (like watches) to be distributed to retail stores in the philippines? if yes, can i own 100% of this business?

When and what kind of business can a non-filipino citizen owned a corporation 100%?

Hope to hear from you the soonest. thanks

Leah, you may own 100% of a distribution company as long as the paid-in capital is USD 200,000.00.
You can see the lists of restriction of foreign ownership: Negative List A List B

Hi,thanks for the quick response. in the Negative List A, it says retail trade, is this the same as wholesale (which is related to my question above?

Let me rephrase my question, can i own 100% as a wholeseller?
thanks.

I invested into a Thai Massage business with an agreement on contract that I receive 60% of the profits. Technically do I own 60% of the business?

JR, you would own 60% of the business if you bought 60% of the business. If the agreement shows that you loaned money, you are not technically an owner of the business.

By Bob McNevin on November 6th, 2009 at 3:14 pm

I am canadian looking On the island of Boi?? I think that is how it is spelt. I am intersted in a tourist restaurant and bar facility. I have heard that the government is relaxing some of thier standards to bring tourism to the island. Would this fall under the category of 100% ownership?

Bob, small retail business such as restaurants are not allowed to be owned by foreigners.

Goog day
I am in Australia and Australian citizen.
I want to start a Junk shop in Phillipines to collect scrap metal and export 100% overseas.
Do I require usd 200,000 paid up capital, since more than 60% is exported?

With best regards
Rob

Rob, the SEC would probably accept.

Gentlemen,

We would like to put up a 100% foreign-owned corporation in your country. The nature of our business operation involves manufacture and distribution (in wholesale terms) of steel components of residential, commercial or industial building construction. I guess that does not fall either in Negative List A or B of the Foreign Investment Act of your country.

My question revolves around corporate registration with your SEC. How can we prove to the Philippine government that we inwardly remitted through the Philippine banking system our foreign investment of USD 200,000.00 when pending approval of application for registration,the certificate of bank deposit is in the name of the corporate treasurer? Would Philippine government acknowledge our inward remittance that is not in the name of the corporation that we are going to put up?

Rate, on the bank certificate which is given to the SEC is written treasurer in trust (name) for (company x). So no problem.

By Ron Veruski on November 13th, 2009 at 6:20 am

Good day! I am an American citizen looking forward to acquiring an IT software division of a company in the Philippines. 100% of the output will be used by my company here in the United States. Is my company subject to any taxes in the Philippines? What is the best way for my company (which will be 100% foreign owned) to register as a corporation in the Philippines? thank you and looking forward to your response.

Ron, yes your company Philippine company/branch will liable for income tax on any income sources in the Philippines. There are tax exemptions for companies who export 100% of their production/service.

My wife is a Pilipino/US citizen and I am a US citizen. We are moving to the Philippines next year. Can a non-Pilipino citizen (me) own and/or run a beach resort or a pension house business in the Philippines if we lease the land long term? I am concerned that if something were to happiness to my wife and the business was all in her name

Glen, you can work in he business but you can not own it (small retail businesses can not be foreign owned). You can own the building. If something would happen to your wife you would have to sell the business to a Filipino.

Similarly to previou s post, I am a Filipino with dual citizenship. We are planning to put up a corporation (myself included in the corporation as stock holder) to run a tourist resort.
I will buy the lot under my name and lease it long-term to the corp. Do you see any problem with this setup? Thanks in advance and bravo for yout very clear and informative website.

Jojo, Yes, you may own the land and lease it to the corporation running the resort. I am presuming you will have foreign partners in the corporation running the resort. If more than 40% of the shares will be foreign owned the minimum paid-in capital will be US$ 200,00.00.

Thank you for your prompt reply, yes my partners are foreigners. Do you have other info or article regarding your comment:

“If more than 40% of the shares will be foreign owned the minimum paid-in capital will be US$ 200,00.00.”

Is this the paid-in capital for a hotel/guesthouse business?

What if their share remains at 40%. Does it affects the paid-in capital?

Is it possible to setup a holding company with 30% foreign stockholders, 60% domestic and 10% preffered shares owned by a foreigner.
The preffered shares will be 30 times the value of the other shares.

Would it be possible to form other domestic companies from this companany that have less restrictions?

Rune, it will depend on the kind businesses the holding company will invest in and the voting rights of the preferred shares. You need to consult a lawyer and give full details of the business to see all the possibilities.

hi there,
we are korean company we would like to establish a 100% foreign owned company in the philippines..our company is engaged in new and renewable energy development..is is possible to own 100% foreign?and how much is the minimum paid up capital? thank you

Jenith, yes 100% foreign ownership is possible, minimum paid-up capital is US$ 200,000.00. but there are exemptions which can allow a paid -up capital of US$ 100,000.00.

hi,
what will be the condition of using my name by a foreign investor for him to operate a retail store. do i have some advantage if agree? what will be its implication to me?
thank you

Leo, it is illegal for you to lend your name to a foreigner to own a retial store. You would be violating the anti-dummy law.

Hello. I am an American citizen and am interested in starting a telecommunications company in the Philippines (office phone systems). Is it possible for me to have the company based in the US and offer services in the Philippines? How does the government feel about advertising products to Philippine citizens via the internet from overseas? Would that be regulated?ou

Joe, you can market through the internet to the Philippines. Your clients will have to pay customs and value added tax on products which you will ship to the Philippines.

I currently have a call center in the US and would like to put a call center in the Philippines. The center would service people who are in the US. Can I create a separate entity in the Philippines and have it be 100% foreign owned?

Layne, yes a call center can be 100% foreign owned.

Good day Sir
My boss wants to put up a construction service company here in the Philippines is it possible that they own the company 100% and how much must be their initial investment and how much they must pay the government for them to put up the the company and run the business here in the Philippines … thank you and More POWER =)

Maria, there are many restrictions as to what kind of business a foreigner can operate in the Philippines and the percentage of foreign ownership. I will need more details to be able to answer your question.

Greeting,

Thank you for taking the time to answer all these questions.

I own a software development company in the US and we currently use a lot of contractors in the Philippines. If I were to move to the Philippines for awhile to work on a few of our projects closer with the team, would I be violating any laws or incurring any additional taxes?

Jason. it depends what you consider awhile? You can assist for a short time but you may become liable to pay taxes in the Philippines and need a work permit.

Hi,

I have a internet service company in Germany. I want to open satellite office to Philippines where I can outsource most of the operations (website design, building etc.) and this how get economies of scale compared to my local competitors in Germany.

How should I do it? Is this foreign branch office and as well 60/40 case (foreign ownership) or can I establish office in e.g. in PEZA? Can I somehow get into these Freeport Zones?? 200 000 USD sounds very big money for service company at this point.

Oscar, you will be opening an outsourcing company, an outsourcing company (for export) may file for an exemption and the minimum required paid-in capital will be Php 100,000.00. Establishing an office in PEZA is for obtaining tax incentives and does not change the amount of the required paid-in capital.

hi i am filipino holding canadian citicen do i have i right to buy an rice land for the extended property.to support my bro. and sister…in there in the philippines?

Ed, foreign ownership of land is explained here:

http://www.bcphilippineslawyers.com/foreign-ownership-of-land-in-the-philippines/371/

Hello

I have a question. I am native born-chinese citizen (born and gorwn up here in the philippines), now maried to Pilipino wife. I like to put up a BPO-KPO export business. Can I have 100% ownership of it as a single proprietor and am I excepted to paid up capital of US $ 200,000.00? Am I treated by the government agencies equally as a foreign investor?
Or can I have my pilipina wife 100% own it? as an option? Thanks

Danny, I would not advise you to open a sole proprietorship as you would have unlimited liability if something goes wrong. Better to incorporate. As foreigner you may own 100% of BPO-KPO export business, but even though the business may not be in your wife’s name she is still co-owner as the business would be a part of your conjugal property. For an export business you may obtain an exemption for the amount of paid-in capital. You may have a paid-in capital of Php 100,000.00.

Hi

Can a 100% filipino owned BPO Company apply for BOI tax holiday same way as foreign investors has? Where to apply?

thanks

Danny, yes Filippino investors may avail of tax incentives. You can apply or directly at the BOI.

By Khalid AlShengiti on February 8th, 2010 at 2:02 am

can a foreign purchase stocks or be a partner in a shipping and local cargo transportation corporation in Philippine if so what is the max ownership of foreign and what is the min paid up capital or capital limitation

Khalid, local cargo transportation corporation can not have any foreign ownership.

Hi, I am a German and want to open a restaurant in the Philippines. I would like to invest money but only under some conditions:
1. I want to own the land that I am going to build the restaurant on it.
2. I want to be 100% the owner of the restaurant.
3. I don’t want any illegal acts and want to do everything legally.
Is this possible?
Thank you for your advice.

Torsten,
1. Foreigners can not own land in the Philippines in their name.(A corporation which owns land can have up to 40% foreign ownership)
2. Foreigners may not own any part of a small restaurant business. (small retail businesses can not have any foreign participation)

Hi,

My boss is a Filipino and living in the US. They have a corporation there who will be getting a lot of clients from different industries to open a BPO here in the Philippines. They plan to register another corporation here in the Philippines. Is that necessary? What are the tax implications of having a corporation in the US and another one here? What is the best way to go? Will the corporation here still pay taxes even if it is simply a cost center?

Emma, your boss will need to open a domestic corporation or a branch office to legally operate in the Philippines. There are taxes to pay in the Philippines but tax exemptions are available from BOI and PEZA.

By John Verdida on March 9th, 2010 at 8:53 am

Sir:

My Saudi friend would like to invest a shopping mall in Mindanao, can he own a 100% ownership provided he complied with the paid-up capital? Is this USD 2,500,000 paid capital has to be all in form of cash?

John, foreigners may not own land. I would need more details to really be able to answer your question correctly.

Mabuhay!

I would like to know whether there is any qualification requirement to become an “Authorized Agent Bank” (AAB) in the Philippines for holding the assets invested by foreign investors. Where can I find the related regulations about “Authorized Agent Bank”?

Thank you very much for your help.

Martin, you would first have to open a bank. We can do a study for you if you wish to engage our firm.

hi
i am citizen off Bahrain (Arab gulf)
i currently own a restaurant business registered as inc cooperated company
i want to buy a restaurant from jollibee franchisee in Phil .i would appreciate if u can guide me .can i own 100%share off any franchisee branch or i need Filipino partner.or is there any other way i can be owner 100 % off my investment in restaurant business

ishaq, foreigners may not own or be a partner in a small retail business (restaurants are in that category).

Hi, I was born and raise in the Philippines, but I live here in the US now, and I’m a US citizen throuhg naturalization. Can I own a business in the philippines? I’m planning a nail salon business. Thanks.

Grace, you should apply for Filipino Citizenship. Philippine law now permits dual nationality so you may reacquire your Filipino citizenship by doing so you may open any kind of business.

I have a Filipino friend who wants to put up an English language center….but he needs a foreign investors. What would be the percentage of owning a business in the Philippines? *for foreigners and for the Filipino. How much would be the starting capital in putting up a language center (school) in Metro Manila?

Jenie, foreigners may own up to 40% of an educational institution.

Hi,

What if the properties and businesses that were acquired through loans, borrowings and mortgage are all under the wife’s name (common-law wife), can a foreign common-law husband get 50% share? They are in the Philippines.

Thank you in advance.

MS_ADC, anything acquired during the marriage is conjugal property and each spouse has the right to a 50% share.

By A. Timbol on March 18th, 2010 at 5:44 am

A prospective foreign investor is interested to set a branch office in the Philippines on recruitment of labors. Can it be foreigned owned 100% and register in his name? What are the rules? What are the other possibilities?

A. Timbol, foreigners may own a maximum of 25% of a recruitment business in the Philippines.

Sorry for many quiries. last question sir if you don’t mind. If I owned the land and I let it lease to the corporation in which I’m one of the share holder but, the 70% share of corp is owned by Foreign, is it allowed?

Many Thanks

John, 40% is the maximum a foreigner can own of a corporation which owns land.

Can a foreigner with retiree visa become an owner/incorporator of a new corporation for a property management company? what would be the restrictions, if any?

Jingo, yes a foreigner with a retiree visa may own a property management corporation. The only requirement for the company to be majority foreign owned is to have a paid in capital of US$ 200,000.00.

greetings!

Can a foreigner invest by an amount of $10,000 provided that his/her employees should have sss, philhealth or simply required benefits by Phillipine Govt. How true is this? and is their other means I can invest by jush having a smaller capital like $10,000 and what are the rules or policy.

Thanks in advance, this is really enticing to invest with just low capital.

Ni, you can even start with less as long as the company exports at least 60% of its product or services.

I’m a Canadian citizen but was Born and raised in the Philippines. I’m planning to invest into Salon business in the Philippines partnering with my brother who is Filipino citizen.. I know small businesses are not allowed for foreigner.. can I be silent partner to begin with, legally?

Markus, if you are a former Filipino citizen why don’t you apply for Filipino citizenship. Dual citizenship is now allowed in the Philippines. This way you can be a partner legally.

Hi,
I am a foreigner and would like to set up a company to import agricultural products (food products fresh and frozen) into the Philippines for distribution. What ownership would I be able to have in this venture?

Matt, the best is to set up a corporation to limit your liability.

By Matt Martin on April 8th, 2010 at 4:51 pm

Hi, we are expanding BPO services by getting into new product lines, i.e. from purely inbound customer service, we shall do voice transcription and document publications. Can we apply separate ITH for these new product lines, both 100% export services

Thank you

Regards,
Matt Martin

Matt yes, you can apply separate Immediate Temporary Help to your new product lines. Just make sure you have everything covered in your employment contracts and company policy.

By Tony Shead on April 9th, 2010 at 12:44 am

Hi,
I am looking at having a office in the Philippines doing my accounts and data imput for my company in Australia. Does this full under the Export Businesses and of so what are the requirements and if not what should it be under.

Regards

Tony, back office operations are considered an export business.

RE: Markus, if you are a former Filipino citizen why don’t you apply for Filipino citizenship. Dual citizenship is now allowed in the Philippines. This way you can be a partner legally.

Since I am just opening a small business, do you think that process is worth my time? What are the pros and cons? I am not familiar with all the taxes and I was just curious as to if I should just let my brother-in-law take full ownership and I am a private investor. Is that a safe bet?

Markus, since I don’t know if the amount you will invest is important to you basically it will all depend on how much you trust your brother in law.

I’m a filipino born and former filipino citizen who acquired Australian citizenship do I have the same rights as other filipino citizen in term of openinghanks a business in the philippines?

even if I dont apply for dual citizenship?

or if not what is my rights as a formers filipino citizen?

Mark, a former Filipino citizen has the right to acquire a small amount of land, but for operating a business you are considered a foreigner.

Hi,
I am a foreign national and want to open up a retail store with a Filipino friend as partner. I want to know if its possible by any means and what are the limitations? The investment will be about USD20,000 only.

Rgds,
Banna

Banna, foreigners are not allowed to own small retail business in the Philippines.

Hi,
I want to establish a corporation in the Philippines to engage in the export of agricultural products to Korea. Can it be 100% foreign owned?
Thanks & Regards,

Bea, export companies can be 100% foreign owned.

Hi,
I am a NZ citizen and have been asked to open with a Filipino national a petrol station.
I will provide 100% of the funding and wondered if a petrol station is considered a small retail business or not.
I would expect turn over to be 400000pesos per day (approx US$10000)
I would like to know what % of shareholding would be possible as a foreigner.
Any preliminary advise greatly appreciated.

Many thanks
Regards
Stewart Fox

Stewart, it is not the amount of turnover that qualifies a retail business for foreign ownership. Normally no foreign equity is allowed in a retail business the exception being: Full foreign participation is allowed for retail trade enterprises: (a) with paid-up capital of US$2,500,000 or more provided that investments for establishing a store is not less than US$830,000; or (b) specializing in high end or luxury products, provided that the paid-up capital per store is not less than US$250,000 (Sec. 5 of R.A. 9762)

Gentlemen

We are considering an agricultural enterprise where 100% of the produce is exported.
Is 100% foreign owned permitted if not – what percentage

Dayle, you may own 100% of an export company but you may not own the actual agricultural operation.

Does it make a difference to the foreign ownership laws if the agricultural enterprise was located in a special economic zone?

Dayle, it is very difficult to answer your questions when we do not know the whole scenario. Please use the contact form on our site to give complete details of your project.

By Raffaello Marcelo on May 20th, 2010 at 8:25 am

Hi and thanks a lot for all your answers.

Just to make things clear: is software outsourcing considered an Export Enterprise? We have a foreign software company and would like to create a small company in the Philippines to help us out, with at first 2 employees, and up to 5 or 6 if it works well.

If so it means the paid-in capital will only be Php 100,000.00 and we could own 100% of it, right?

Also can I easily get a working visa if I want to work in that company in the Philippines (so that at least the 1st year I’ll be able to locally manage the team)?

Raffaello, correct software outsourcing is considered export the paid-in capital will only be Php 100,000.00 and you could own 99.% of it and yes you will be able to obtain a work visa.

Hi there,

This site is very useful..

I wonder if you could answer my question too.

Im uk citizen, staying in the Philippines now for 4 years as a tourist (not continously)

I have a filipina Fiance and we are having a baby.

So time to put a business here, it will be small, about $5000 initial investment ($2500 each) into a amusement type business, renting electric cars, and small amusement type rides in Malls.

We will be starting the business in her name, until we figure out how i can also legally be on the paperwork.

How can i legally be involved in this business?

Can we open as a partnership? allowing me to legally own 40%?

If not, what the very best i can do here?

Im planning on living here for a quite some time, and would like to be able to invest in business here, open my own business etc.

Also my dad (uk citizen) is married to a filipina (who is now a dual citizen), and they will be retiring to the Philippines soon too, to start a life and businesses here.

Thanks,

Kris, you may own up to 40% of the business in your name. You may setup a partnership for this business.

Hi, I would like ask about hotel and resort business in the philippines. I know that hotel business can be 100% foreign owned corporation. and how much will be profer paid up capital? I will plan USD 50,000 first. is it possible?

SJ, for a hotel / resort to be legally 100% foreign owned the minimum paid in capital is UDS 200,000.00.

Thanks for the reply.

But what if foreign owned 80% and Filipino owned 20%? is it same paid in capital? or possible less deposit? I heard that call center and export corp. also recommended by Philippine government. It is possible exceed 40% foreign owned corporation…

SJ, a resort is not considered an export corporation. The minimum capital for a corporation depending on the kind of business is Php 100,000.00 this would allow a maximum of 40% foreign ownership.

Hi,
My company owns a Website development firm here in the UK. We plan to set up business in the Philippines. I am confident that we can operate as a branch office in the Philippines.

However, somebody told me that it would be better for us to apply for a SVEG, where I will act as the Investor and obtain four other Philippine shareholders for the company. What do you think is better for us? To apply as a Branch Office or as a SVEG holder?

under the SVEG they say that we only have to employ ten filipinos and that is it. is this true?

Your site is very helpful!

Jorell, a SVEG is visa, it is not a business entity. To operate a business you will need to setup a domestic corporation or a branch office.

Hi! I’m a Polish citizen and I’m interested in buying a bus to use for a public transportation business in the Philippines. Am I allowed to have a public transport business? Thank you.

Damian, foreigners may not own a public transportation business in the Philippines.

Hi, thank you for spending the time to reply to all our questions..

I have a question of my own.. Can a foreign company already listed in another exchange (i.e. London or NYSE) be listed in the PSE?

Joe, yes there are companies listed overseas that are also listed in the Philippines.

Hi, my company would like to invest in agricultural farming, for both export and domestic sales.

What can be the best set-up in terms of ownership? Is majority share by the foreign company allowed?

Len, foreigners may not engage directly in farming.

Hi

I am an Irish national. I would like to open a property development company in the philippines where I could purchase land develop it , then sell. Is it possible to own 100%.

What are my options?

kind regards

Paul, a non-Filipino citizen may own a maximum of 40% of a corporation which owns land.

Good day,

I work for a IT services provider company based in Australia. My boss had married a Filipina and decided to stay here in the Philippines for good. He plans to register an outsourcing extension company with his wife as the owner but will still be under the banner of our Australian company.

We have a confusion on how to declare our revenue taxes since the profit of our services is received by the main office in Australia and the only money that is sent to us is for our salary and our office expenses and these are budgeted amounts and are not project based.

How do we apply for our Tax regulations?

Angela, your boss can just setup a branch office of his Australian company in the Philippines. Once the SEC has issued a license to operate, the branch will have to register with the BIR and obtain all the necessary business permits. I can not explain to you all the tax issues in this post as it is quite long. The branch office may register with the BOI.
Will we be able to benefit from BOI?

hi, im a u.s. citizen and i want to start a BPO business. what you can you advise to me? i want to owned 100% of the corporation. can i lease for a long term of a properties?

thanks

Richard, you may either open a domestic corporation of which you may own 99,9% or a branch office. You may legally lease a property for 25 years renewable for another 25 years.

hi i want to ask regarding to EO 758 SVEG. what kind of business i can make in this EO? thanks

Richard, it can be any business that a foreigner may legally operate under Philippine law.

So am i right in saying, if I open a cloth retail store, I can own upto 40% with small capital (very less than 200,000 USD) as it comes under Domestic Market Enterprise?

Tom, foreigners are not allowed to own or be a partner in small retail businesses in the Philippines.

Hi, good day. I am inquiring for my foreigner (Korean) friend.

They want to start/build a corporation here in the Philippines. The type of the business involved would be an amusement shop/stall with a/one 4-D RIDE (more like a virtual reality ride with 3D glasses). They will be exporting the machine from Korea, which costs approx. Php 3-4M. They will put up the business in a mall(probably SM Mall)… what kind of corporation should they build?

IS 100% foreign-ownership possible for the business/corporation? Or should they comply with the 60-40 (Filipino-Korean) ownership?

I do not quite understnd the paid-up caital… is the construction/interior dsigning of the shop/stall included in the paid up capital or only the cost of the machine to be imported from KOREA? Please, we need enlightenment regarding this matter.

Can a foreign company buy a building in the philippines and lease it?

A foreign company may only up to 40% of a condominium building. Yes, it may lease out the units it owns.

Ki Song, foreigners may not legally engage or be partners in a retail business.

I really thank you for you help so far, soon i will be in the Philippines and visiting for six month. This is my question, should i apply for a foreign resident visa, i think i meet all the requirements including a consistant monthly income, if i should apply for this then what are financial requirements,aside from this my fiance and I are talking about owning a company that would own rental properties. Would that be possible. Just to remind you that my fiance is a filipino.

Your help is so appreciated

Kennedy, once you are married you will easily get a resident visa. You will just need to show a certificate of deposit from a bank.

By Edna V. Garrovillas on October 5th, 2010 at 9:34 pm

Can a foreigner invest or own 40% of a holding company which invests in real estate properties?

Edna, yes a foreigner may own up to 40% of a holding company which invests in real estate.

I’m a Filipino Citizen and my step Dad is a Foreigner. We are planning to register an export/import business here in the Philippines. What do we need to do to make these business possible?

Regards,

Osiris, In general it is best to setup a corporation for liability protection.

hello am a dual citizen filipino canadian,am planning to go back to the philippines and probably start up a business. How much of a percentage of a business can i own?

Allen, all Filipino citizens may own any percentage of a business that they want.

Query about inward remittance for the paid up capital of export market (more than 40% foreign based equiy).

Is it required that the whole amount of capitalization of export market are from inward remittance including share of the filipino incorporators? or the share of foreigner only (inward remittance) plus philippine peso?

Your reply is highly appreciated.

Thanks and regards,

Jayar, only the foreign share of the capital must paid-in by inward remittance.

By jhael turner on October 27th, 2010 at 4:53 am

hi. I’m jhael from Indonesia. I just wanna ask you if how many shares can a foreign investor own if we want to invest in a Filipino owned chemical manufacturing company (chemicals used in manufacturing fertilizers, etc.)? or if possible, can we buy it 100%? are there any legal restrictions about it? thanks.

Jhael, Normally foreigners may own 100% of a manufacturing company. In this case there may be some restrictions depending on what chemicals are manufactured.

Hello. I appreciated all of the questions and answers here. I am a FILIPINO 100% having a foreign friend. He want to invest here in the Philippines and want me to be his partner. HE IS investing for about 1 000 000 USD. Can we engage for franchise if ever. I wanted to start franchising Jollibee for three branches. Is that possible and if ever how can we divide for the ownership , provided that I will be general partner.

thank you

Jhei, foreigners may not be a partner in small retail businesses. The minimum investment for a foreigner to be partner in retail business is $2.5 million.

I am a US citizen and my wife is filipino citizen. We reside in California. We want to create an RP corporation which will hold land. May I assume VP position and 40% ownership without having ACR or other form of registration in the RP.

Ted, you may be a director but you can not be an officer. A corporation must have a minimum of 5 directors and at least 3 of them must be residents of the Philippines.

Hello, I have some questions.

I want to open four stores of the company’s generica drugs drugstore here. The total investment amounts to 2.4 million pesos and it will create 12-16 new jobs. The special retirement investor visa in the Philippines says it is creating 10 new jobs must be given to them.

I Have a Philippine partner, who will lead the company and I myself am an investor that gives the required capital. We want a professional partnerships, registered with SEC to lead together.

Is it as Europeans in the Philippines in general allowed a franchise company to open or officially manage?

Can I hold 40% or even 60% of the company, or is this even allowed?

I know that it’s foreigners are not allowed to own or be a partner in small retail businesses in the Philippines but a franchise company is not a small retail businesses.

I thank you in advance for the answers

Steve, a franchise that is a retail operation is forbidden to be owned in any way by foreigners franchise or not.

Hi,

I have a software company in Canada and I hold both Canadian and Filipino citizenship. I want to open a company in the philippines that will deal with software consulting and development. Our software will not only be for foreign markets but for local enterprise. If that’s the case, what is our paid-up capital requirement? In the sec list by industry there is nothing there for the software/IT industry…so does that mean we only need P5000? I read above that the other person wanting to open a small software development shop purely for outsource to their US company requires P100,000.

Thanks in advance for your answer.

Marco, even though the law states that a corporation can be opened with a minimum of PHP 5,000 capital the SEC policy is not to allow corporation to be licensed to transact business with a capital below PHP 100,000.

Hi,

In the manufacturing business, can a foreigner (Philippine resident) have 40% shares in a partnership or a corporation? What is the minimum paid in capital respectively?

Can foreign resident hold positions like president, general manager or treasurer in a corporation or partnership?

Thank you.

Selena, a foreigner may own more than 40% of a manufacturing business as long as the minimum paid-in capital is USD 200k. In a 60 – 40 owned enterprise a foreigner can not be the president or GM.

By Ryan Watson on January 16th, 2011 at 4:31 am

Hi.
I am a UK citizen, I have a Filipino fiancée,
We are looking to re-locate to the Philippines in the next 6 months.
We will put up various business’. A small restaurant, a virtual Office administration service -Web based, and a Travel company.
I understand due to the size of the companies (only Small) that foreign ownership will not be possible with out huge capital – I will need a Visa to live and work in the Philippines, would my Fiancée be able to provide me this visa through our business?
The other alternative is to set the companies up as branches of a foreign company -I have an offshore company with a 50% share for each myself and my fiancée – What regulations do i have to adhere to, to ensure the full legality of these branches regarding ownership?
Many thanks

Ryan, the same capital requirements apply whether you open branch office or open a domestic corporation.
Yes, one of the companies could apply for a work permit for you. Small restaurants can not have any foreign ownership.

Hello, I am not a Philippines Citizen. I want to get involved with fish farming. I know that UtiliZation of Marine Resources appears on the Foreign Investment Negative List.
If I lease land and grow fish in ponds is this okay? If so may I own 100% of that business ?

Thankyou

Ken, you may not as foreigner own or operate legally an aquaculture business even if you lease the land.

okay thanks. What if I form a partnership with a Filipino citizen who owns 60% of the capitol and I am a silent partner?

Ken, foreigners can not own any share in an aquaculture business. Not owning means 0%.

Hello, I’m a Filipina with a business in the Philippines. We’re thinking of doing a corporation now. My question is – can my American husband who is on a 13A Visa, become the president? Or treasurer? Please advise. Thank you.

Lea, it depends on what kind of business, the paid-in capital and if the business can be 100% foreign owned or not.

Hello,
I heard a rumor that a Philippines company with 60% foreign ownership can now hold land in the Philippines; is this true or just a false rumor?
Kind regards,

Chris, it’s false rumour.

Hi, me and my Filipino colleagues are planning to put up an export company. i have a foreign fiance who will invest with a paid-in capital of USD68,000.00. can he be a part owner of the business?

Rose, yes your fiance can be a part owner of the business as long as at least 60% of products are exported.

Hi,I’m a foreigner and want to put up a small restaurant with a Filipino citizen. Can we open as partnership? Can I own less than 40% of the business in my name?
Thank you very much.

Sarrinen, foreigners may not own or be partners in a restaurant. 0 percent foreign ownership allowed.

Hi! This is a very informative thread and website! Just to clarify, if the authorized cap stock is 2.5M USD, then a foreign corp can own 100% the retail business say a restaurant brand? Are there other conditions?

Jen, you can find out more here:

REPUBLIC ACT No 8762 LIBERALIZING THE RETAIL TRADE BUSINESS

Hi,

I am a Canadian citizen, looking to start a small retail store in the clothing sector, just a small set up store, nothing too corporation size volume that will import clothes from North America.

Can I, as a Canadian citizen, register and obtain a business licence? Will I be able to also lease a building since I am a foreigner to open a shop?

Can I create a sole propriortership or must I Be filipino citizen? If so can I get into partnership with a filipino who will register our business under both our names? What is the shareholder % breakdown? How do I maintain the large share to have more liability as I do not want the other person to be liable?

Thanks

Dee, foreigners can not own any percentage of a retail business.

By Bong Magpayo on May 20th, 2011 at 2:33 am

My question sir is can a foreigner who has a special visa issued by PRA be allowed to get a franchise say for example a Potato Corner or Sweet Corner cart franchise or from any SME’s members of a legitimate franchising association, are they allowed to operated as franchisees?

Thanks

Bong, foreigners may not own or be a partner in a retail business of that kind.

Hi, Can a joint venture between a foreign owned company and a 100% owned Filipino company do retail business?

Glenn, only if the very stringent requirements of the Foreign Investment Negative are met.

Can a foreign owned corporation purchase an island and build a resort and be 100% owner of both the island and resort?

No, a corporation which owns land can have a maximum of 40% foreign ownership.

http://www.dayananconsulting.com/philippines-foreign-ownership-resorts/379/

Hi,
I’m a foreigner currently living in the Philippines. I would like to start an engineering company with my Filipino friends. This company will focus on Electrical engineering field. Can I own some share of this company?

Afshin, engineering is not allowed as a profession by foreigners nor may foreigners own shares in an engineering company.

hi if i join with five filipinos to start a realestate business as a corporation in the phillipines, can we buy land in the corps name and then after three months transfer the land into my name so i am the full owner

Rick, no, foreigners can not own land in their name.

Hello,
I’m a filipino and will be putting-up a corporation with a foreign partner here in the Philippines… this corporation will be an investment corp. 40% of the investment will belong to 1 Chinese national and 60% will belong to 4 Filipinos. How much paid-up capital would it require for the investors (chinese and filipino)to start this corporation. Also in the future if there are new foreign investors, is it possible to incorporate them with the existing corporation? Thank you in advance for your advice.

Francis, as the majority of the company will be Filipino owned you can start with PHP100,000.00 but if you have more foreign investors the minimum paid-in capital might have to be increased depending on the kinds of business the company will invest in. Take note that certain kinds of businesses may not have any foreign ownership.

i understand that a foreigner cannot own any part of a small retail business such as a food cart/stall or restaurant.
would there be any distinction for a company that sells or leases franchises for such businesses?

Matt, a franchise outlet is owned independently of the franchise company, therefore it is still a small retail business which can not foreign owned.

By Emma San Juan on August 1st, 2011 at 4:53 am

Im inquiring for a friend … can foreigners own 100% of an importation company to be based here? Can foreigners be the head of the company?

Thank you, in advance, for your response.

Emma, yes an import company can be 100% foreign owned with the requirement that it has a minimum paid-in capital of USD200,000 and engages only in wholesale distribution.

is it possible for a foreigner to start his own coffee shop business in the Philippines with local partner?

Gabs, a coffee shop is considered a small retail business. Foreigners may not own any percentage of a small retail business.

hi sir,

I’m a Filipino and planning to setup a partnership or a corporation with one or two Koreans.Once partnership or corporation has been formed, we’re planning to engage into KUMON franchise (KUMON is a learning institution that teaches MATH and ENGLISH). Estimated Capital investment is PHP 700,000.00. BTW, we will make sure that the company is FILIPINO majority owned. Now my question is, is our company allowed to engage into this type of business (given that we have foreign partner/s)? thanks a lot.

Ge, education businesses may have up to 40% foreign ownership.

Good pm Sir,

How much capital is required by the SEC for a domestic corporation that will engage in trading business if one of the incorporators is a foreigner?

Ernie, it all depends on the percentage of foreign ownership. 40% or less, there is no minimum. 41% or more the minimum paid-in capital must be USD200,000.00.

Hi,

I am a Filipina married to a Norwegian. We own some condomimium units in the Philippines which are still under mortgage and under our name. Our plan is to start a corporation that will engage mainly into buying and rental of residential and commercial properties.
Can we sell the privately owned condominium units to the corporation even they are still under mortgage? How much is the paid up and subscribe capital for this type of business? Also, can my foreign husband own more than 40% of the share of the corporation? Thank you.

Glenda, your husband could own more than 40% of the corporation if it is setup correctly. Yes, you can sell the units to the corporation while mortgaged as long as the mortgagor agrees. I would recommend a minimum paid-in capital of PHP100,000.00.

My partners and i are thinking of setting up a general trading corporation in the phils; i am a foreigner residing in hong kong (permanent resident) with APEC visa for the phils and will have 40% participation in the said filipino corporation. Thinking of acting as company president in the phils and spend more time there. am i eligible for working visa? can that be arranged in the phils or will have to be pre-arranged overseas? will the position have to be remunerated or can only be appointment?

John, a foreigner can not be president of a corporation which is majority Filipino owned.

Hello,

I’ve heard that if you employ directly 10 people, you can acquire the Filipino nationality.
Is this right and how does it work please?
Thank you very much.

Walter, hiring 10 Filipinos does not allow you to become a Philippines citizen. What it does allow you is to apply for a visa “Special Visa for Employment Generation”

Hi. Regarding import and export, is there any limitation as to what goods are allowed to be traded? Specifically can I trade in precious metals?

What is the start up capital required and under what circumstances can one apply for an exemption? If I trading in precious metals am I likely to get an exemption?

Thanks.

Aaron, the import and export of precious metals is allowed. If you don’t have capital how are you going to open a business in precious metals?

Hello,

I am a U.S. citizen interested in starting a website here in the Philippines with paid advertising from companies in the PI. I would be employing a small team of local workers for maintenance of the site, with myself as the financer and owner of the site/company. What are the business rules on this type of business, can I own 100%? Are there specific rules for web business for the Philippines? If so what are they?
Thanks in advance for yor time and helpful information.

Brian, foreign ownership of retail businesses and media are not allowed. Retail is when you sell to the end user, in this case the advertizer.

Can a foreigner hold any officership in a Condo Corp? I saw a similar question above and you mentioned that its possible as long as they are a legal resident of the Philippines. To further support this, can you give us a specific reference/document that we can use as reference?

Thank you.

Ercik, a foreigner can not be an officer in a condo corp as it is 60% Filipino owned.

Hi,
Got a question. I’m a naturalized Filipino (American citizen) and planning to be in a partnership investment (pharmaceutical). I’ll probably be investing US$116,000. Are there any specific laws or restrictions that I should be aware? Any tax ramifications? Please advise. Thanks.

Jumar, it really depends, retail is not allowed by foreign citizens, more than 40% foreign ownership requires at least US$200,000 paid-in capital.

I am interested in setting up a web development/online marketing company here in the Philippines. We would help other companies get online and direct website traffic to their own website. We will be providing website design and online marketing services for US based businesses. Do I have to have a Filipino partner or can I retain 100% ownership.

Anthony, you do not need a Filipino partner. Outsourcing business are considered export enterprises and can be 100% foreign owned.

We are planning to start a corporation in Philippines with majority shareholder being local and rest would come from foreign investors. The business would involve a restaurant and some food carts. any major legal problems that we will face in the set up process? if yes, what are the options on how to set it up?

Foreigners may not be shareholders in small retail businesses such as restaurants and foodcarts.

By Jane Bondoc on October 23rd, 2011 at 2:00 am

After a Philippine corporation has been setup, can a foreign corporation buy unsubscribe shares of the corporation. if not, how can a foreign holding company invest on Philippine corporation. If it is possible for holding corporations to buy shares of a Philippine corporation, are there any special procedure for such?

Thank you,
Jane

Jane, a foreign corporation may purchase shares in a Philippine corporation as long as it is a business that is allowed to have foreign ownership.

We are planning to start a company in Philippines. We will hire Filipino workers and we will be providing website design and online marketing services for US and Europe based businesses.

Can we have 100% foreign owned company in this case?
Do we need to have paid-in capital of PHP100,000.00 only?

Yaroslav, yes the company may be 100% foreign owned and you may have PHP100,000.00 paid-in capital.

Hi,

I’m from the UK and I’m interested in setting up an internet cafe in the Philippines. How much ownership can I obtain and how much pain-in capital will this cost?
I have my own company in the UK but I’m guessing this makes no difference.

Thanks,

Peter, foreigners can not own any percentage of a small retail business such as an internet cafe.

Hi

Thanks for taking time out to answer all these questions. I’m thinking of procuring a franchise with a local and intend to set up a partnership. Can this be done and how many percent of the business can I own (I’m guessing 40)? Also, the business we are looking at is an F&B outlet.

Ray, foreigners may not own or be partners in retail businesses such as restaurants.

By Mike McFadden on December 21st, 2011 at 1:05 am

Hello,

I am Canadian and am setting up a coffee export company here in the Philippines. Our website, (soon to be completed) is cordilleracoffeecompany.com I was wondering about foreign investment for our roasting plant. We plan to roast our own beans before export. Will this plant be considered part of the export operation?
Mike McFadden

Mike, its part of the export operation so there is no issue.

By Dr, Gilberto Dominguez on December 21st, 2011 at 7:35 am

I would be happy to hire your firm. My immediate concern and questions have to do with the following.

I plan to start a corporation in the Philippines with filipino citizens I know who are business people.

We plan to set up a lending company in the form of a corporation. I want to set my self up as the only signer on the bank account and control the money of the corporation’s activities.

Our one main question now is since our corporation with have us as foriegn investors and stock holder will our corporation be able to lend money to retail businesses in the phils?

We will not own any retail business but lend money to the retail businesses. Will this be possible and legal?

Dr, Gilberto Dominguez, yes foreigners may be shareholders in a lending investor and you may lend to retail businesses.

hello..

my wife is a filipina and we would like to invest in a franchised fast food business. is it possible to own 30%, my wife 60% and other foreign partner 10% of this business..

Dr. Amro, foreigners may not own or be a partner in a retail business such as a fast food franchise.

Dear,

I’m planning to start a small Ice-cream cafe together with my friend from the Philippines. But when I read your answers to other people I think it’s not possible as foreigners are not allowed to do that.

Right or wrong?

Anna, right foreigners may not own or be partners in small retail businesses.

Sir/Ma’am:

Is it possible to incorporate a private preschool with the SEC even if you are a US citizen? If so, how many should be US citizens and how many should be Filipino citizens. The School however will employ 100% Filipino citizens.

Thanks.

Dwayne, Educational establishments may have a maximum of 40% foreign ownership.

Hi, I just want to ask if a 60/40 Filipino/foreign owned corporation can engage in retail trade? Thank you.

Bod, can not own any percentage of a corporation engaged in small retail trade.

Dear

I am a Foreigner. I am looking to open an Arabian coffee shop. What should I do? Because really I got confuse. What are the options available.

Regards

Omar, foreigners are not allowed to own small retail businesses such as coffee shops and restaurants.

Can a foreign ownership in a corporation do a business like a restaurant?

Foreigners can not own a restaurant as it is a small retail business.

Hi,

I am a foreigner and have the opportunity to run a canteen in an International school(private establishement)in the Philippines.

The fact that it is a private establishment feeding private clients and not public makes a difference?
I can have a 100% ownership or am I allowed to only 40%?
Many thanks.

Foreigners may not own small retail businesses such as restaurants/bars or be a partner in one, unless the company has a minimum paid-in capital of USD2.5 million.

Most of the people in Philippines are not in capacity to finance small business. Foreigners can not do any small business own their own or partnership with Filipinos. Foreigners can take risk to invest money with mutual consent but their investment is not legal in Philippines law. And never know when Filipino partner change his heart and take all the money as he/ she know foreigner can not do any thing against them. Foreigner do not have any right to invest in small scale business. (It has happen to me i invested all the money business registered with SEC, I have to take Filipino incorporators 60/40,who have no contribution) they cheated me and try to grab all the money.

Many foreigner would like to invest small capital to help many people and of course for some return but there is no protection from government.

May be it is safe for foreigners who thinking to invest small amount in small business is to invest in their own countries instead thinking to invest in Philippines. Some professionals are so unfaithful to their profession when advising to foreigners. I have quotation for processing for visa…one quoted 50000 other quoted 80000 and third quoted 450000 (four hundred fifty thousands) . I have email from them. They think that foreigner are ignorant.

Can you please suggest how foreigner can safe guard their investment if they want to invest in small business even as partnership with Filipinos. Where can they seek honest advise and legal services.

Harbin, it’s very easy, only invest in a business which can be 100% foreign owned and follow the local laws.

 

Leave a Comment