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How to register a foreign company in the Philippines?

April 25, 2018

With its robust economic growth and strategic position in Southeast Asia, the Philippines remains a prime destination for foreign investors seeking to establish a business presence. Registering a foreign company in the Philippines offers access to a dynamic market of over 110 million consumers, a skilled English-speaking workforce, and investor-friendly policies, including tax incentives. However, navigating the regulatory landscape requires careful planning and compliance with local laws. This guide provides a comprehensive overview of the registration process, business structures, and key considerations to ensure a smooth market entry, with expert insights from Triple i Consulting, a trusted provider of business registration services in the Philippines.

Business Structures for a Foreign Company in the Philippines

The Philippines offers several business structures for foreign investors, each tailored to specific operational and financial goals. Choosing the proper structure is critical to aligning with regulatory requirements and business objectives. Below is a detailed list of the most common options for establishing a foreign company in the Philippines.

Domestic Corporation: A foreign-owned domestic corporation allows up to 100% foreign ownership in sectors not restricted by the Foreign Investment Negative List (FINL). It requires a minimum paid-up capital of USD 200,000, reducible to USD 100,000 for businesses using advanced technology or employing at least 50 direct Filipino employees. Retail trade businesses face higher thresholds, such as USD 2,500,000 for general retail or USD 250,000 per store for high-end products. This structure suits companies aiming to operate locally and generate revenue.
Branch Office: An extension of the parent company abroad, a branch office can engage in revenue-generating activities, such as trading or manufacturing. It requires a minimum capital of USD 200,000, reducible to USD 100,000 under conditions similar to those of a domestic corporation. A Filipino resident agent is mandatory to handle legal notices. Branch offices are subject to a 25% corporate income tax under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Representative Office: Designed for non-revenue-generating activities like market research or customer support, a representative office requires a minimum capital of USD 30,000. It must appoint a Filipino resident agent and file periodic reports with the Bureau of Internal Revenue (BIR), despite being exempt from income tax. This structure is ideal for companies establishing a liaison presence.
Regional Headquarters (RHQ): An RHQ is an administrative hub overseeing regional affiliates, with no income-generating activities. It requires an annual remittance of USD 50,000 and is exempt from income tax but must comply with BIR reporting. This option suits multinationals managing regional operations.
Regional Operating Headquarters (ROHQ): An ROHQ provides services like logistics or technical support to affiliates, requiring a one-time capital of USD 200,000. It is subject to a preferential 10% tax rate on taxable income, making it attractive for service-oriented multinationals.
One Person Corporation (OPC): Introduced under the Revised Corporation Code of 2019, an OPC allows a single foreign shareholder (unless restricted by the FINL) with no minimum capital requirement, unless specified by law. It simplifies setup for solo entrepreneurs but requires compliance from a Filipino nominee director.

Step-by-Step Registration Process for a Foreign Company in the Philippines

Registering a foreign company in the Philippines involves a structured process overseen by the Securities and Exchange Commission (SEC) and other government agencies. Depending on the business structure and document preparation, the process typically spans 2–4 months. Below are the key steps to establish a foreign company in the Philippines.

Reserve a Business Name: Verify and reserve a unique company name through the SEC’s online portal or the Department of Trade and Industry (DTI) for sole proprietorships. The name must not resemble existing entities or violate trademark laws.
Prepare Required Documents: Submit authenticated documents, including the parent company’s articles of incorporation, board resolution approving the Philippine entity, financial statements, and proof of inward remittance for capital (via a Bangko Sentral ng Pilipinas-registered bank). A resident agent’s acceptance letter is also required for branch and representative offices.
Register with the SEC: Apply with the SEC, paying registration fees based on the business structure and capital. Additional registration with the Philippine Economic Zone Authority (PEZA) or Board of Investments (BOI) may be necessary for export-oriented businesses or those in special economic zones.
Secure a Taxpayer Identification Number (TIN): Register with the BIR to obtain a TIN and comply with tax obligations, including value-added tax (VAT) or percentage tax, depending on the business type. Annual financial statements and tax filings are mandatory.
Obtain Local Government Permits: Apply for a barangay clearance and mayor’s permit from the Local Government Unit (LGU) where the business is located. Fees vary by city or municipality.
Register with Employee Benefits Agencies: Enroll with the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG) if hiring employees, ensuring compliance with labor laws.
Secure Additional Licenses: Depending on the industry, obtain specific permits (e.g., FDA approval for food and drugs, BSP license for financial institutions). Retail and export businesses may require additional certifications.

Visa and Work Permits for Foreign Investors and Employees

Foreign investors and employees of a foreign company in the Philippines must secure appropriate visas and permits to operate legally. These requirements ensure compliance with immigration and labor regulations. Below are the key visa and permit options for foreign nationals.

9(g) Work Visa: A pre-arranged employment visa for foreign employees or business owners in the Philippines. It requires an employment contract, a valid passport, and an Alien Employment Permit (AEP) from the Department of Labor and Employment (DOLE). The visa is typically valid for 1–3 years and is renewable.
Special Investor’s Resident Visa (SIRV): Available to foreign investors contributing at least USD 75,000 to a qualifying business (e.g., manufacturing, tourism, or PEZA-registered enterprises). The SIRV grants indefinite stay, provided the investment is maintained, and includes dependents (spouse and children under 21).
Alien Employment Permit (AEP): This is mandatory for all foreign nationals working in the Philippines and is issued by DOLE. The AEP requires proof that a Filipino cannot fill the position and is valid for up to 5 years, aligned with the employment contract.
PEZA Visa: This visa simplifies immigration requirements for employees of PEZA-registered businesses and is tied to the company’s economic zone status. It is renewable annually and requires proof of employment. This visa is available for employees of RHQs or ROHQs. It is issued by the Bureau of Immigration (BI) and allows a stay of up to 5 years. It requires sponsorship by the registered entity.

Tax Incentives and Economic Zone Benefits

The Philippines offers attractive tax incentives to encourage foreign investment, particularly for businesses registered with PEZA, BOI, or other economic zone authorities like the Subic Bay Metropolitan Authority (SBMA). These benefits reduce operational costs and enhance profitability. Below are the key incentives available to a foreign company in the Philippines.

Income Tax Holiday (ITH): PEZA and BOI-registered businesses in priority sectors (e.g., renewable energy, agribusiness, IT) may qualify for a 4–6-year ITH, exempting them from corporate income tax during the period.
Reduced Corporate Income Tax: Under the CREATE Act, the standard corporate income tax rate is 25% as of 2025, with large corporations (assets over PHP 100 million) eligible for further reductions to 20% by 2027. ROHQs enjoy a preferential 10% rate.
Duty-Free Importation: PEZA-registered companies importing raw materials or equipment for export-oriented production are exempt from customs duties and VAT, lowering operational costs.
Local Tax Exemptions: Businesses in special economic zones are exempt from local government taxes, such as real property tax and business permit fees, reducing overhead expenses.
Enhanced Deductions: BOI-registered enterprises may, subject to approval, claim additional deductions for research and development, training, or infrastructure costs.
VAT Zero-Rating: Export-oriented businesses or those serving international clients (e.g., BPO) can apply zero-rated VAT on services, improving cash flow.

Alternative Market Entry Options for a Foreign Company in the Philippines

For businesses seeking flexibility or lower initial investment, alternative market entry strategies can bypass the complexities of establishing a legal entity. These options allow rapid market access while ensuring compliance. Below are viable alternatives for a foreign company in the Philippines.

Employer of Record (EOR) Services: An EOR is the legal employer for a company’s workforce, handling payroll and taxes and compliance with SSS, PhilHealth, and Pag-IBIG. This eliminates the need for a registered entity, enabling market entry within weeks. EORs are ideal for testing the market or managing small teams.
Joint Ventures: Partnering with a local company allows foreign investors to share capital, risks, and expertise. The FINL restricts foreign ownership in specific sectors (e.g., 40% in real estate), making joint ventures a strategic option for compliance.
Franchising: Operating a franchise of an existing brand (e.g., retail or food) requires lower capital and leverages established market presence. Franchising agreements must comply with the Intellectual Property Code and SEC regulations.
Licensing Agreements: Licensing a product or service to a local entity allows revenue generation without a physical presence. This requires a licensing contract and compliance with tax obligations through a withholding agent.
Virtual Operations: For digital businesses (e.g., e-commerce, IT services), operating remotely with a local partner or contractor minimizes setup costs. However, BIR registration is required if the business generates Philippine-sourced income.

Importance of Professional Assistance for Registering a Foreign Company in the Philippines

The registration process for a foreign company in the Philippines involves multiple government agencies, extensive documentation, and strict compliance requirements. Errors in document preparation, missteps in regulatory filings, or failure to meet capital thresholds can delay registration by months or lead to penalties. Engaging a professional service provider like Triple i Consulting is essential to streamline the process, avoid costly mistakes, and ensure compliance with local laws. Below are the key reasons to seek expert assistance.

Navigating Regulatory Complexity: Triple i Consulting’s expertise in SEC, BIR, and LGU requirements ensures accurate and timely filings, reducing the risk of rejections or delays.
Customized Business Structure Advice: With in-depth knowledge of domestic corporations, branch offices, and alternative options like EORs, Triple i Consulting tailors solutions to match a company’s goals and budget.
Document Preparation and Authentication: Triple i Consulting handles the preparation and authentication of foreign documents, ensuring compliance with SEC and BSP standards and saving time and resources.
Tax and Incentive Optimization: The firm advises on PEZA, BOI, and CREATE Act incentives, maximizing tax savings and ensuring eligibility for benefits like income tax holidays.
Post-Registration Compliance: Triple i Consulting supports annual filings, tax compliance, and employee benefits registration, ensuring long-term operational success.
Visa and Permit Support: The firm assists with securing 9(g), SIRV, or AEP permits, simplifying immigration processes for foreign investors and employees.

Given the intricacies of Philippine regulations, it is highly recommended that a foreign company in the Philippines partner with Triple i Consulting, a trusted provider of business registration services, to achieve a seamless and efficient setup.

Final Insights

Establishing a foreign company in the Philippines offers significant opportunities, driven by the country’s 5.6% GDP growth in 2023, a skilled workforce, and investor-friendly policies like the CREATE Act and PEZA incentives. However, the registration process demands careful navigation of business structures, regulatory requirements, and compliance obligations. Each step requires precision to avoid delays or penalties, from choosing between a domestic corporation, branch office, or alternative options like EORs to securing visas and tax incentives. Triple i Consulting, with its proven expertise, stands ready to guide investors through this complex process, ensuring a successful market entry. By leveraging professional support, foreign investors can confidently tap into the Philippines’ vibrant economy and strategic ASEAN position.

Is Assistance Available?

Navigating the complexities of registering a foreign company in the Philippines can be daunting, but assistance is readily available. Triple i Consulting, a trusted provider of business registration services, offers tailored solutions to streamline the process, ensuring compliance and efficiency. Contact us today to schedule an initial consultation with one of our experts: