« | BC Philippine Lawyer | »

Philippines Business Registration

Posted by admin on Tuesday, February 3rd, 2009

Businesses may be registered in the Philippines as:

Foreign Branch Office, Foreign Representative Office, Partnerships and Domestic Corporations need to be registered with the Securities and Exchange Commission (SEC).

Sole Proprietorships are registered with the Department of Trade and Industry (DTI).

Philippines Incorporation

To incorporate or form a corporation in the Philippines it is a requirement to have a minimum of 5 incorporators (a corporation may not be an incorporator of another corporation). Each incorporator must hold at least one share in the corporation. Corporations must have a minimum of 5 directors and can have a maximum of 15. The majority of the Directors must be residents of the Philippines.

The Incorporation Procedure

  • Reservation of Company Name
  • Submission of Articles of Incorporation and Bylaws
  • Bank Certificate of Paid in Capital

The Foreign Investment Act as well as the Foreign Investment Negative List A and List B contain the restrictions on foreign ownership of corporations in the Philippines.

Minimum paid-up capital requirements vary according to the kind business the company engages in. For a Domestic Market Enterprise (DME) to be 100% foreign owned the minimum paid-up capital requirement is USD 200,000.00. DMEs which use advanced technology or employ at least 50 direct employees may be allowed a reduced paid-in capital of USD 100,000.00. Companies which export more than 60% of their products or services may apply for an exemption.

Corporations who qualify may avail of tax incentives by registering with the BOI or PEZA.

Branch Office Registration

Comments

By jhude on April 7th, 2009 at 6:25 am

Is it possible to start business as single proprietorship first then convert to a partnership after a period of say, 2-3 years?

Jhude, yes you may.

By Antonette on July 19th, 2009 at 10:16 pm

Good Day! can you help on how to convert the business from single proprietorship to corporation? What are the requirements I’m going to prepare? And how can i handle the business as corporation?

Looking forward to learn from you.
Thank You

Antonette, you will assign the assets from the single proprietorship to the corporation as capital.
Please read Doing Business in the Philippines. A corporation is run just like a sole-proprietorship except that you will have to make yearly reports to the SEC.

By shirley on August 14th, 2009 at 1:38 am

how can i get a DTI Registration Number for a corporation? Please help me…

Shirley, go to the DTI office and apply for one.

By ellen on August 18th, 2009 at 9:58 am

Can a new corporation which will do trading declare only 1 million peso authorized capital?

It has 3 filipinos and 2 foreigners on a 60/40 share. Can they have equal subsribed share, subscribed amount and paid up amount regardless of nationality?

Also, can they have a bank deposit more than the required paid up capital?

Thank you.

Ellen, a trading corporation can be started with only 100,000 pesos. To start the company it is best to only deposit the paid-up capital. Afterwords the shareholders may lend money to the company. If there are 5 shareholders as you described each one may have an equal share. If you need help in setting up the corporation we can assist you just use the contact form.

By Jocelyn C. Lajara on October 9th, 2009 at 10:10 pm

What is the minimum capital investment if 99% foreign, 1% filipino ownership doing business in the philippines . the business is shipping/forwarding?

Is 99% foreign & 1% filipino ownership shipping forwarding business allowed in the philippines?

Jocelyn, a domestic shipping and forwarding business can not be foreign owned.

By Amr on October 11th, 2009 at 9:02 am

Are the laws of the Philippines familiar with offshore companies? If so, how can I incorporate such a company at the Philippines?

Amr, there no offshore companies under Philippine Law. Export and certain other kinds of companies may obtain tax incentives.

By Rea on October 29th, 2009 at 12:44 am

How can a BPO domestic corporation qualify for registration with the BOI? And what will be the requirements for BOI registration?

Rea, you will find the requirements to register and apply on this site BOI Guideslines & Procedures for Registration. The application requirements are quite tedious you might like to have a lawyer assist you.

By marylene vitug on December 17th, 2009 at 12:19 am

how much is minimum paid up capital required to set up a design and construction company in the philippines? 100% Filipino-owned.

Marylene, the minimum paid-up capital required to open a design and construction company is Php 100,000.00.

By Bench on January 14th, 2010 at 3:17 am

Hi, good day! I would like to enquire as our company is planning to have a branch in philippines, my questions are:

1. Is it possible for a foreign branch company to operate in philippines?
2. Our company is in flight crew recruitment, can we obtain a recruitment licnese?

Thank you…

Bench, it is possible for a foreign branch company to operate in the Philippines but not as a recruitment company.
A recruitment company may be only 25% foreign owned, so you will need Filipino partners.

By ernie gatus on February 10th, 2010 at 3:27 am

should a local architectural and engineering design firm be 100% filipino owned?

Ernie, the practice of the profession of engineering is stated in the Foreign Negative List A http://www.bcphilippineslawyers.com/philippines-regular-foreign-investment-negative-list-a/

Architecture is not mentioned.

By Ramon Banaglorioso on February 17th, 2010 at 4:12 pm

Hello.

1. What is the minimum paid-up capital required to open a 100% Filipino-owned BPO/IT corporation?

2. What tax incentives/shields can a domestic BPO/IT company avail of? For how long, if any?

Thank you

Ramon, the minimum subscribed paid-up capital is Php 100,000.00.

You can read aout the BOI incentives here: http://www.bcphilippineslawyers.com/boi-board-of-investments-tax-incentives/522/

By Lambert on March 9th, 2010 at 5:05 am

Hi and good day!

I have a trading business(commodities) and single proprietorship and currently planning to convert to corporation.I would like to know the process and requirement in converting it to corporation. Is it simple as going to SEC and submitting the complete registration forms?

Kindly advise and thanks a lot in advance.

Lambert, it is not that simple you will have to submit extra information so that the SEC can value yor existing assets as part of the subscribed capital etc…

By Connie on March 11th, 2010 at 5:04 am

I would like to set up a food business in Manila, Philippine. Can the Company be single proprietorship with 100% foreign owned or must it be at least 10% filipino owned as partners? What is the requirement? Can I purchase vehicle in Manila for my food business? Do I need to produce minimum paid up capital ? Can foreigner (Malaysian) drive in Philippines ? Thank you.

Connie, only residents can open a sole proprietorship. Small retail businesses can only be 100% Filipino owned. Foreigners may own and drive their own vehicle.

By Robert on March 17th, 2010 at 9:44 pm

can a foreign owned business open a representitive office in Phi to hire and recuit Phi workers for the education industry aborad. If so how does it open and what is the minimium paid up capital requirement.

Robert, foreigners may legally own only up to 25% of a recruitment company.

By marco tenorio on March 23rd, 2010 at 3:56 pm

i will operate a foodcart business in the philippines and my company’s name would be tenorio foods ltd. where do i register it it’s a single proprietorship.

Marco, sole proprietorships are registered with the DTI.

By Karl on March 23rd, 2010 at 8:08 pm

Good day!

Can I employ my spouse in my sole proprietorship business?

Thanks!

Karl, yes you may employ your wife.

By Bob Windley on March 25th, 2010 at 9:44 am

I am in process setting up a corporation with Pinoy directors.
I am advised that my maximum share holding is 40% which is ok.
However, I am told that I cannot be president although the information I have found says that only the secretary must be Pinoy.

Any comment please

Regards and my compliments on a great site

Bob, the company President may be a foreigner but he must be officially resident in the Philippines.

By Karl on April 1st, 2010 at 1:54 am

Good day!

Thank you for the reply.

In connection with my previous question,how can I compensate my wife if I’ll employ her in my sole propreitorship business? Can I include her into my payroll?

Thank you for extending your kindness.

Karl, yes you may add her to your payroll.

By Eugene on April 13th, 2010 at 5:19 am

Hi!
We plan to put up a NEW corporation to run a restaurant that I previously operated as a single proprietorship and has closed shop a year and a half ago. Can I use as CAPITAL (50% of the capitalization)the business name and all the other assets of the old business i.e. kitchen equipments, furniture, sound system, dining utensils and accessories?
Thank you for the advice.

Eugene, yes the old equipment and furnishings can be a part of the capital. An inventory must be given to the SEC who will accept or not the value you assign the items.

By Diana on April 19th, 2010 at 11:11 am

Hi,

We are planning to set up a stock corporation. Do we have to hire staff and pay social security for them?
We are hoping to keep operating costs at a minimum.

Thanks for your advice

Diana, yes if you hire staff you must pay their social security (SSS) and other social charges (Philhealth, Pagibig etc…). Not paying the SSS is a criminal offense.

By anon on May 9th, 2010 at 11:14 am

Hi,

Are there any extra requirements (apart from the standard ones when registering a corp with SEC) if my company is involved in forex trading? We will be purely online. Is a brick and mortar address required? How much is the minimum paid-in capital? We will be 100% Filipino owned and operated.

Thanks for your advice. Great job on the website, very informative.

Anon, yes all business must have a brick and mortar address. You will need to get to get endorsements form the Central Bank.

By John on May 10th, 2010 at 12:46 am

I am a foreigner with a filipina partner. We are interested in setting up a business in RP. The business would be primarily retail. Can you tell me how much I can own and if it would be possible and worthwhile to set up the business as a corporation along with some members of her family? Many thanks.

John, small retail businesses can not have any foreign ownership.

By mark on May 12th, 2010 at 12:26 pm

i am planning to set up a corporation. can the paid up capital be in the form of properties? or should it be in cash? do i need to pay any taxes for such a transaction? thanks so much

Mark, the paid up capital can be properties but it will take around a month for the SEC to value the properties. Taxes will depend on what kind of business the company will operate.

By geri on May 26th, 2010 at 7:07 am

i have my own new item (its doorhangers – commodity), what do i need to do to make it a legitimate business. i submitted my samples to a company for possible selling at their stores but they said i cant since my business is not yet registered or have the proper documents. thanks!

Geri, you need to register a sole proprietorship or a partnership or a corporation and obtain all necessary business permits before you can start your business.

By kris on June 16th, 2010 at 12:23 am

good day! what is the minimum number of people to put up a corporation? thanks!

Kris, a corporation must have a minimum of 5 directors and 5 incorporators. Each director must own at least one share in the corporation.

By lady on July 8th, 2010 at 5:04 am

Hi there!

Any requirements or guidelines in order for me( Filipino) to have a foreign partner/business in manila to operate? ( ex: dormitory and lot owned and how many percent owned by filipino and foreigner as well )

thank you very much!

Lady, since the company will own land, foreign ownership is restricted to 40% of the corporation.

 

Leave a Comment