Setting Up a 100% Owned Business in the Philippines: Complete Guide for Foreign Investors

November 30, 2025

Foreign investors seeking to establish full control over their Philippine operations can leverage numerous sectors open to 100% owned business structures, thanks to liberalized policies and a dynamic economy. While constitutional restrictions persist in sensitive industries, the majority of commercial activities permit complete foreign ownership, provided minimum capital requirements and procedural compliance are met.

Understanding the Legal Framework for 100% Ownership

The foundation for 100% owned business setups rests on key legislation balancing investor access with national interests. Activities not restricted by the Foreign Investment Negative List (FINL) allow full foreign equity, enabling investors to retain complete decision-making authority.

The Philippine Constitution and statutes limit foreign participation in areas such as mass media (which must be 100% Filipino-owned), land ownership, and public utilities. The FINL, which is updated periodically, categorizes restrictions into two lists: List A (constitutional limits) and List B (policy-based limits, such as those related to retail trade). Sectors such as IT services, manufacturing, export-oriented production, and most professional services remain fully open.

The Foreign Investments Act (RA 7042, as amended) and Revised Corporation Code (RA 11232) further facilitate business registration, introducing One Person Corporations (OPCs) and streamlined processes for foreign-led entities.

Eligible Business Structures for Full Foreign Ownership

Foreign investors have flexible options tailored to operational needs, each with distinct advantages.

Domestic Corporation or One Person Corporation

The preferred vehicle for long-term operations, allowing 100% foreign shares in permitted sectors. OPCs suit solo investors, while regular corporations accommodate multiple shareholders (2-15 incorporators). Both provide limited liability and full commercial rights, subject to USD 200,000 minimum paid-up capital (reduced to USD 100,000 for export-oriented firms employing 50+ Filipinos or using advanced technology).

Branch Office

An unincorporated extension of the foreign parent, ideal for generating localized income without requiring separate entity status. Requires USD 200,000 assigned capital and a resident agent; parent company bears full liability. Prohibited in FINL-restricted activities.

Representative Office

Non-revenue generating liaison for market research or promotion, needing only USD 30,000 inward remittance. Simplest setup, but operationally limited.

Regional Operating Headquarters (ROHQ)

For regional back-office services to affiliates, offering tax incentives but no local income derivation.

Capital Requirements and Exemptions

Meeting paid-up capital thresholds is mandatory for credibility and SEC approval.

Standard for 100% foreign domestic corporations: USD 200,000, with 25% initially paid.
Reductions: USD 100,000 for advanced technology users or employers of 50+ direct Filipino workers; PHP 5,000 for export enterprises (70%+ output exported).
Retail trade: PHP 25 million minimum per recent amendments, with PHP 10 million per store.
No minimum: Applies to 40% or less foreign equity or fully Filipino-owned firms.

Proof via bank certificates of inward remittance is essential.

Step-by-Step Process for Domestic Corporation Setup

Establishing a 100% foreign-owned domestic corporation in the Philippines follows a clear, digitized process through the SEC’s eSPARC portal, starting with FINL verification and name reservation, progressing to document submission with proof of paid-up capital, and culminating in post-registration with BIR, LGUs, and social agencies.

Verify Eligibility and Prepare

Confirm FINL compliance and gather apostilled parent company documents (articles of incorporation, board resolutions, financial statements). Plan capital remittance.

Name Reservation

Secure a unique name through SEC’s eSPARC portal (valid 30-90 days).

Draft Incorporation Documents

Prepare Articles of Incorporation (primary purpose must align with open sectors), By-laws, Treasurer’s Affidavit, and Cover Sheet. Designate a Filipino corporate secretary and resident treasurer.

Deposit Capital and Submit to the SEC

Remit funds to a Philippine bank, obtain a certificate, and file online. Pay fees based on authorized capital (typically PHP 5,000-20,000). Approval takes 3-7 days.

Post-SEC Registrations
BIR: TIN, books of accounts, receipts authority.
LGU: Barangay clearance, Mayor’s Permit.
Social agencies: SSS, PhilHealth, and Pag-IBIG employer registration.

Open corporate bank accounts post-licensing.

Taxation and Available Incentives

100% owned business entities face standard 25% corporate income tax (20% for small firms under the CREATE law), 12% VAT, and withholding taxes. Dividends to non-residents incur 15% final tax.

Incentives via Board of Investments (BOI) or Philippine Economic Zone Authority (PEZA) include:

Income tax holidays (4-7 years).
Duty-free imports, VAT zero-rating.
Enhanced deductions for training/R&D.

Priority for export-oriented, renewable energy, IT-BPM, and infrastructure projects (70% export threshold often applies).

This structured approach ensures legal recognition, operational readiness, and compliance within 1-3 months when executed efficiently.

Land Ownership and Property Restrictions

Foreign 100% owned business corporations cannot own land, but may:

Lease for 50 years (renewable 25 years).
Own condominium units (up to 40% project total).
Use leasehold improvements or joint ventures for facilities.

Ongoing Compliance Obligations

Sustained operations demand rigorous reporting:

SEC: Annual General Information Sheet (GIS), Audited Financial Statements (AFS).
BIR: Quarterly/annual tax returns, withholding remittances.
LGU: Annual permit renewals.
Labor: Minimum wage, 13th month pay, SSS/PhilHealth/Pag-IBIG contributions; Alien Employment Permits for expatriates.

Non-compliance risks fines, license revocation, or blacklisting.

Common Challenges and Mitigation Strategies

Foreign investors establishing 100% owned businesses in the Philippines often encounter hurdles like navigating FINL restrictions, proving capital requirements, bureaucratic delays, and complex tax compliance across multiple agencies.

FINL navigation: Engage counsel for precise activity classification.
Capital proof delays: Pre-arrange remittances and bank partnerships.
Bureaucratic timelines: Use e-portals; budget 1-3 months total.
Local nuances: Varying LGU requirements demand site-specific checks.

Professional services (lawyers, accountants) accelerate setup and ensure accuracy.

Final Insights

The Philippines enables robust 100% owned business opportunities across diverse sectors, supported by modernized laws and incentives. Success hinges on FINL diligence, capital compliance, procedural adherence, and proactive governance. Foreign investors positioning for ASEAN growth find the market accessible and rewarding when approaching with an informed strategy.

Expert Assistance for Your 100% Owned Business Setup

Specialized Philippine firms, such as Triple i Consulting, offer assistance for seamless FINL checks, SEC filings, incentive applications, and compliance management. Contact our team of experts to schedule a consultation: