Company Incorporation in the Philippines: A Step-By-Step Guide

December 17, 2025

Company incorporation in the Philippines provides investors with a limited-liability vehicle to operate in one of Southeast Asia’s fastest-growing economies, but it also requires meeting specific requirements regarding directors, capital, and registrations with several government agencies.

Understanding how to structure a domestic corporation, how foreign equity affects capital thresholds, and how to sequence SEC, BIR, and LGU registrations is essential for a smooth company incorporation process in the Philippines.

Understanding Domestic Corporations In The Philippines

A domestic corporation in the Philippines is a locally incorporated company with its own juridical personality, similar to a limited liability company in other jurisdictions, which separates the liabilities of the entity from those of its shareholders. This separation allows investors to limit their financial risk to the amount of capital they commit, making domestic corporations a preferred vehicle for both local and foreign investors entering the Philippine market.

The law allows varying levels of foreign equity in domestic corporations, ranging from fully Filipino‑owned to more than 40% foreign participation, subject to sector‑specific restrictions under other statutes.

Executive and Board Composition Requirements

Company incorporation in the Philippines requires compliance with specific governance rules on directors and key officers, which must be considered at the planning stage. A domestic corporation generally needs between two and fifteen directors or incorporators, and the majority of these directors must be residents of the Philippines, ensuring local oversight and accountability.

At least four core officers are required: a President who acts as the company’s signatory (and does not need to be a Philippine resident), a Corporate Secretary, a Corporate Treasurer, and a Compliance Officer, each with defined roles in day‑to‑day administration and regulatory compliance.

Foreign Equity Brackets and Their Implications

Foreign equity levels directly influence capital requirements and eligibility for certain activities, making them a central part of any company incorporation strategy in the Philippines. Domestic corporations may be structured with 0% foreign equity (fully Filipino‑owned), less than 40% foreign equity, or more than 40.01% foreign equity, subject to foreign ownership limits for specific industries under other laws.

While 0% and less than 40% foreign equity corporations may adopt capital levels “sufficient to support operations,” corporations with more than 40% foreign equity generally trigger higher minimum paid‑in capital under the Foreign Investments Act.

Capital Requirements for Domestic Corporations

Capital requirements for company incorporation in the Philippines depend on the foreign ownership bracket and on whether the business falls under special rules in the Foreign Investments Act. For fully Filipino‑owned entities and those with less than 40% foreign equity, the law broadly allows any capital amount that is sufficient for the intended operations, subject to sector‑specific regulations.

When foreign equity exceeds 40%, the typical minimum paid‑in capital is the equivalent of USD 200,000, aligned with the general rule for foreign‑owned domestic enterprises. However, this amount can be reduced for certain qualifying projects.

Situations where Capital Requirements may be Reduced

The Foreign Investments Act, as amended, permits reductions from the usual USD 200,000 minimum in defined circumstances, which can significantly affect company incorporation planning for foreign‑owned corporations. If the domestic enterprise with more than 40% foreign equity either employs at least 50 direct Filipino employees or can demonstrate the use of advanced technology in its operations, the minimum capital may be lowered to USD 100,000.

Furthermore, export‑oriented enterprises that export at least 60% of their output may operate with a minimum paid‑in capital of less than USD 100,000, recognizing their contribution to foreign exchange and trade.

Overview of the Incorporation Process in the Philippines

Incorporating a domestic corporation in the Philippines involves several stages: registering with the Securities and Exchange Commission (SEC), securing local government permits, completing Bureau of Internal Revenue (BIR) registration, and registering as an employer in social welfare agencies when staff are hired. Each step has its own documentary requirements and procedural rules, and the sequence matters for avoiding duplicate work or delays.

A well‑planned company incorporation timeline knits these steps together, from drafting Articles of Incorporation to getting the final permits needed to commence operations.

SEC Registration and Use of the eSPARC System

The first core step in company incorporation is SEC registration, which creates the corporation as a legal entity under Philippine law. The SEC now uses the eSPARC online portal to handle name reservation and submission of incorporation details and documents, allowing applicants to create accounts, upload forms, and track status digitally.

Applicants submit the Articles of Incorporation and By‑laws, along with the duly accomplished F‑100 form, where applicable for corporations with foreign ownership, and once approved, the SEC issues a Certificate of Incorporation that legally recognizes the company’s existence.

Barangay Clearance and Local Community Approval

After SEC registration, the corporation must secure a Barangay Clearance from the local barangay where its office or establishment is located, as part of integrating into the local government framework. Barangays, as the smallest administrative units, verify that the business location is within their jurisdiction and is acceptable for the proposed activities.

The application typically includes the SEC Certificate of Registration, valid identification of the signatory, and proof of address, such as a land title or lease contract for the premises.

Mayor’s Permit and Business Permit from the Municipality or City

Obtaining a Mayor’s Permit (often referred to as a Business Permit) from the municipal or city hall is the next local compliance step in the company incorporation in the Philippines workflow. This process confirms that the enterprise is allowed to operate in the LGU from a zoning, health, safety, and taxation perspective.

To apply, corporations provide their SEC Certificate of Registration, Barangay Clearance, valid IDs, and proof of address for the local office; some LGUs may also require additional clearances, such as fire safety or sanitary permits, depending on the nature of the business.

BIR Registration and Taxpayer Identification Number (TIN)

BIR registration formalizes the tax status of the newly incorporated corporation and allows it to issue official receipts or invoices to customers. The corporation must visit the appropriate BIR Revenue District Office (RDO) and accomplish BIR Form 1903 (Application for Registration for Partnerships and Corporations), attaching the SEC Certificate, proof of business address, and other required documents.

The company also pays documentary stamp tax using BIR Form 2000, where applicable, registers its books of accounts, and arranges for the printing of official receipts and invoices; the process concludes with the issuance of the BIR Certificate of Registration (Form 2303).

Registering as an Employer with SSS, PhilHealth, and Pag‑IBIG

When the corporation hires employees, it must register as an employer with three major social welfare institutions: the Social Security System (SSS) for social insurance, PhilHealth for health coverage, and the Home Development Mutual Fund (HDMF or Pag‑IBIG Fund) for housing benefits. These registrations ensure that employee contributions and employer share contributions are properly recorded and remitted.

In practice, employer registration with these agencies usually occurs when the company has at least one employee, and agencies may expect evidence of actual hiring before completing employer account setups.

Post-Incorporation Compliance and Ongoing Obligations

Company incorporation in the Philippines does not end with initial registrations; corporations must maintain a range of post‑incorporation compliance measures to remain in good standing. These include keeping books of accounts updated, issuing proper receipts or invoices, and ensuring employees are compensated in line with labor regulations and enrolled in the appropriate social welfare programs.

Corporations must also comply with periodic requirements such as tax return filings, renewal of business permits, and, for SEC‑regulated entities, submission of annual financial statements and general information sheets.

Importance of Proper Documentation and Sequencing

One recurring theme in company incorporation in the Philippines is the importance of accurate documentation and the correct sequencing of steps to avoid delays or rejections. Errors in Articles of Incorporation, incomplete supporting documents, or inconsistencies in address information across SEC, LGU, and BIR filings can all slow down the process.

Adopting a checklist‑based approach and ensuring consistency across all submissions helps new corporations move from planning to operational status more efficiently and reduces the need for repeated corrections.

Frequently Asked Questions Around Incorporation

Q1: Will there be issues if a corporation is already registered with the SEC and BIR but not yet with SSS, PhilHealth, and Pag-IBIG?
In general, a corporation that has SEC and BIR registration but has no employees yet will not immediately face issues solely because SSS, PhilHealth, and Pag-IBIG employer registrations are still pending, provided it complies with its tax reporting obligations (for example, filing BIR Form 1601C with “no employees/zero transactions” where applicable).

Q2: Is it a requirement to hire at least one employee before registering with SSS, PhilHealth, and Pag-IBIG as an employer?
Yes. In practice, registration with these labor welfare agencies is tied to actual employment; employer registration normally commences on or after the hiring date of the first employee, since contributions and reporting only apply once there is at least one covered worker on the payroll.

Q3: When should employer registration ideally be completed in relation to the first hire?
Ideally, the corporation should initiate and complete employer registration with SSS, PhilHealth, and Pag-IBIG as soon as the first employee is formally hired, so that contributions can be computed and remitted from the very first payroll period and no arrears or penalties accumulate.

Q4: If a company delays employer registration but already has employees, what risks may arise?
Delays in registering as an employer while already having staff can lead to unremitted contributions, potential surcharges or penalties, and possible employee complaints, since workers are entitled to social security, health, and housing benefit coverage from the time they enter into covered employment.

Key Takeaways

The context for company incorporation in the Philippines in 2026 includes expectations of around 6.1% annual GDP growth and ongoing efforts to make the environment more attractive to investors. This growth backdrop means more opportunities but also a need to adhere closely to updated procedures and regulations, as agencies continue to refine digital systems and compliance standards.

Incorporators who understand both the letter of the requirements and the practical realities of dealing with SEC, LGUs, BIR, and social agencies are better positioned to establish compliant, resilient corporations that can take full advantage of the country’s economic momentum.

Is Assistance Available?

Yes. Get your company incorporation in the Philippines right from day one by following a transparent, compliant process for SEC registration, local permits, tax setup, and employer obligations. Begin planning your structure, capital, and timeline now so your corporation can take full advantage of the country’s growth outlook in 2025 and beyond. Contact our team of experts to schedule a consultation: