Tag Archives: Philippine foreign company ownership

Philippines BPO KPO Registration Incorporation

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Setting up a Call Center, BPO or KPO in the Philippines starts with registering a company. Companies engaged in outsourcing as long as the clients are overseas are considered export companies and can be one hundred percent (100%) foreign owned (Fully Foreign Owned Domestic Corporation).

Philippine tax incentives are available to all companies engaged in outsourcing. To avail of tax breaks the outsourcing corproation may register with either PEZA (Philippines Economic Zone Authority) or the BOI (Philippine Board of Investments).

The Philippines is known for the outsourcing of:

  • Medical Transcription
  • 3D Animation
  • Call Center (Inbound, Outbound, Chat)
  • Website Design and Development
  • Legal Outsourcing
  • KPO (Knowledge Process Outsourcing)
  • BPO (Business Process Outsourcing)
  • Architecture (Cad Cam)
  • Programming
  • Data Entry
  • Human Resources (HR) and Accounting

Setting up an outsourcing company in the Philippines has many advantages. Filipinos are highly skilled and almost everyone speaks English. Outsourcing in the Philippines whether as an in-house operation or for others will save and increase your company’s earnings.

BC Philippines lawyers will assist you in choosing the best corporate structure for your operations in the Philippines and registration with government authorities to avail of tax breaks. Email a Lawyer.

Philippines Incorporation

Philippine Branch Office

Email or call us Tel.: 63 2 474-2732 for a consultation

Foreign Ownership of Corporations in the Philippines

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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