Expanding a business into the Philippines can be a rewarding opportunity for foreign investors. With its growing economy, young workforce, and strategic location in Southeast Asia, the Philippines attracts entrepreneurs who want to establish a long-term presence there. One of the first decisions you’ll need to make is whether to register as a domestic or foreign corporation.
Each option comes with its own requirements, benefits, and limitations. We’ll explain the differences and how to apply for each so you can make an informed decision.
What are Domestic and Foreign Corporations in the Philippines
Under the Revised Corporation Code of the Philippines, corporations are classified based on where they are incorporated:
- A domestic corporation is incorporated under Philippine law and registered with the Securities and Exchange Commission (SEC).
- A foreign corporation is incorporated under foreign law but allowed to do business in the Philippines once it secures an SEC license.
The choice depends on whether you want to create a new Philippine entity or operate as an extension of your existing foreign company.
Features of a Domestic Corporation
A domestic corporation has the following characteristics:
- Incorporated under Philippine law.
- Foreigners can wholly or partially own sectors open to foreign investment, depending on industry restrictions. Foreigners can own up to 100% of these sectors, but some industries have limits (usually 40%). Check the Foreign Investment Negative List (FINL) to see which industries are limited or restricted.
- Recognized as a Philippine entity, separate from its owners and shareholders.
- Subject to Philippine taxes and regulations.
- Requires at least two incorporators (individuals or entities).
This structure is ideal for entrepreneurs who want a fully localized business that operates independently from the foreign parent company.
Features of a Foreign Corporation
On the other hand, a foreign corporation operates as an extension of its parent company abroad. Its main features include:
- Incorporated under foreign law.
- Allowed to operate in the Philippines only after securing an SEC license to do business.
- Must establish one type of office:
- Branch Office – generates income and operates as an extension of the parent company.
- Representative Office – limited to liaison, marketing, or support functions, and cannot earn revenue locally.
- A Regional Headquarters (RHQ) is a specialized office that coordinates and manages regional operations for a foreign company’s subsidiaries. Due to its more specialized purpose, we will focus more on Representative and Branch Offices for this post. Check our other blog posts for more information on RHQs.
- Liabilities extend to the parent company abroad since it is not a separate Philippine entity.
Advantages of Setting Up a Domestic Corporation
Choosing a domestic corporation offers several benefits:
- Separate Legal Entity – The corporation is distinct from its shareholders, providing liability protection.
- Full Market Access – A domestic corporation can engage in a wide range of activities open to foreign investment.
- Investor Confidence – Local customers, partners, and banks may prefer dealing with a Philippine-registered company.
- Tax Incentives – Certain domestic corporations can qualify for incentives from the Board of Investments (BOI) or the Philippine Economic Zone Authority (PEZA).
This option suits foreign entrepreneurs who plan to build long-term operations specifically focused on the country.
Advantages of Setting Up a Foreign Corporation
Foreign corporations also provide unique advantages:
- Control and Integration – Since it operates as part of the parent company, management and decision-making remain centralized.
- Lower Setup Requirements—Setting up a representative or branch office usually requires fewer incorporators than forming a domestic corporation.
- Brand Consistency – A branch office carries the same brand and reputation as the parent company, which may already be known internationally.
- Flexibility – A representative office can test the market immediately without committing to revenue-generating operations.
This structure is often best for companies that want to maintain close ties to their foreign parent while exploring opportunities in the Philippines.
How to Register a Domestic Corporation
To register a domestic corporation, foreign entrepreneurs must:
- Reserve a business name through the SEC’s online system.
- Prepare and file the Articles of Incorporation and Bylaws.
- Provide proof of minimum paid-in capital, depending on the industry and foreign ownership level.
- Submit valid IDs, passports, or corporate documents of the incorporators.
- Obtain a Certificate of Incorporation from the SEC.
- Register with the BIR (Bureau of Internal Revenue), SSS, PhilHealth, Pag-IBIG, and government agencies specific to your industry.
- Secure local permits such as the Mayor’s Permit and Barangay Clearance.
The process typically takes a month or more. Ensure your documentary requirements are complete, accurate, and fully compliant to avoid delays.
How to Register a Foreign Corporation
Foreign corporations follow a different business registration process:
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- Choose between a Representative or a Branch Office.
- Designate a Filipino citizen or a domestic corporation as your resident agent. This agent is authorized to receive legal notices and official communications on behalf of your foreign corporation.
- Prepare required documentation, including:
- Application Form
- Name verification slip
- Authenticated copy of the parent company’s Board Resolution approving the establishment
- Articles of Incorporation or equivalent from the parent company’s home country
- Financial statements of the parent company for the latest fiscal year
- Proof of inward remittance
- Organizational chart and details of the parent company’s operations
- Registration Data Sheet
- Notarized Resident Agent Acceptance Form (if applicable)
- Affidavit executed by the Resident Agent stating that the applicant is solvent and in sound financial condition (for Representative office and non-stock corporations)
- File your application to the SEC using Form F-103 (branch office) or Form F-104 (representative office), along with all supporting documents and the required fees. Once approved, the SEC will review your application and issue the License to Do Business.
- Remit the required capital into a Philippine bank account. The minimum amount will depend on the type of office and your industry.
- Secure additional permits required to operate legally, including:
- Barangay Clearance
- Mayor’s Permit / Business Permit
- BIR Registration for tax compliance
- You may need to register with additional agencies, such as:
- BSP (Bangko Sentral ng Pilipinas)
- SSS, PhilHealth, and Pag-IBIG
- Other agencies, depending on your business type
- Set Up Operations, hire staff, and begin operations only after all SEC approvals and local permits are secured.
Final Thoughts
For foreign entrepreneurs, the decision between a domestic and a foreign corporation depends on their goals in the Philippines.
- A domestic corporation is the better option if you want a standalone Philippine entity with full market access and growth potential.
- A foreign corporation may be more practical if you prefer to operate as an extension of your existing company or simply test the market.
If you have questions or need assistance registering your corporation, schedule a consultation with us for professional guidance.
Are You Registering a Domestic or Foreign Corporation in the Philippines?
Setting up a corporation in the Philippines involves strict compliance and registration with multiple government agencies. It’s easy to make a mistake or miss a step, leading to penalties or delays in your operations.
That’s where Triple i Consulting comes in. Our team of experienced lawyers and accountants provides comprehensive support for your business, so you don’t have to stress over the paperwork.
Contact us today to schedule an initial consultation with one of our experts:
- Fill out the form below
- Call us at: +63 (02) 8540-9623
- Send an email to: info@tripleiconsulting.com
