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Foreign Ownership of Corporations in the Philippines
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
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.
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.
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.
I am a Singaporean who owned a freight forwarding company. How much share (%) is required from a foreigner and how much should be owned by Filipinos?
Eugie, a freight forwarding company may 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.
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.
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.
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.
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.
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.
I’m not sure if this is the right place to ask this question. I just want to know if a foreigner can hold a position in a Corporation? I know they cant be the president but can they hold any position? Like Vice-President or treasurer?
Manny, foreigners can be president as long as they are legal residents of the Philippines. Vice-President can be a foreigner non resident.
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.
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?
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