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Forming a Corporation in the Philippines

A corporation’s structure allows for the protection of the owners’ individual assets from that of the company, as it is an entity separate and distinct from that of the shareholders, whose liability in a corporation is limited to the amount of their share capital.

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In the Philippines, where there is no Limited Liability Corporation (LLC), the closest entity would be a corporation – a set of separate juridical persons established under the Philippine Corporation Code and regulated by the Securities and Exchange Commission (SEC) of the Philippines. A corporation’s structure allows for the protection of the owner’s individual assets from that of the company, as it is an entity separate and distinct from that of the shareholders, whose liability in a corporation is limited to the amount of their share capital.

Starting a corporation or business in the Philippines is a process filled with tasks you’ll need to fulfill, meetings you need to schedule, and documents you need to submit. Below is a brief guide on registering a business corporation in the Philippines. 

TYPES OF BUSINESSES IN THE PHILIPPINES

Domestic Corporation

  • A domestic corporation is the closest counterpart of a Limited Liability Company (LLC) or a Private Limited Company (PLC) in the Philippines.
  • Just like an LLC, a domestic corporation is legally bound to pay for its obligations.
  • Based on the amount of their share capital, the stakeholders may also take responsibility for this. 

Sole Proprietorship

  • A sole proprietorship is a type of business structure owned by one person who usually has complete power over the business.
  • Income taxes paid depend on the profits that the company gains.
  • The sole proprietor or the business owner is responsible for all the debts that the business may experience. 

Philippine Branch Office

  • The Philippine branch office is an extension of a corporation owned by a foreign company that executes the business operations of its head office from its country of origin to the Philippines.
  • It may source its revenue from its operations in the Philippines and do business in the same way as it does in its head office, provided it abides by the laws of the country where its company was established. 

Philippine Representative Office (PRO)

  • The Philippine Representative Office is the local office for a foreign-owned corporation that strives to create a corporate existence in the Philippines.
  • According to Philippine law, a representative office is not allowed to generate revenue in the country and charges all operating expenses and liabilities to its main office overseas.
  • Its main functions include the promotion of products, information dissemination, quality control of the products for export, and handling communications.

Learn more about Philippines Business Structures here.

Incorporation Requirements:

TYPE OF BUSINESS ORGANIZATIONAL REQUIREMENTS MINIMUM CAPITAL REQUIREMENTS DOCUMENT REQUIREMENTS
Domestic Corporation 
  • 2 to 15 incorporators who should have a minimum of one share each of the corporation’s capital stock and who should be mentioned in the Articles of Incorporation as original constituents of the corporation. 
  • USD 200,000: for domestic market enterprise applicable to Foreign-Owned Domestic corporations with more than 40 percent Foreign Equity or the prerequisite for majority-foreign-owned businesses
  • USD 100,000: applicable to corporations that are considered pioneers in the Philippines, use advanced technology, or have at least 50 employees. 
  • Two valid IDs for each incorporator
  • If there is a foreign incorporator, a copy of the passport 
  • Tax Identification Number of the local incorporator
  • Articles of Incorporation
  • By-laws of the corporation
  • Proof of Address
Sole Proprietorship
  • Can be managed by just one person and does not require the hiring of employees or working for anyone.
  • USD 200,000: applicable to Foreign-Owned Sole Proprietorships with more than 40 percent Foreign Equity
  • Two valid IDs
  • Proof of Address 
Philippine Branch Office
  • Needs a resident agent that should be a resident of the Philippines. It may be an individual or a corporation. 
  • USD 200,000: for domestic market enterprise for more than 40 percent to 100 percent foreign-owned business catering to the Philippines domestic market.
  • USD 100,000: applicable to businesses that are pioneers in the Philippines; use advanced technology, or have at least 50 employees.
  • Certified copy of the Board of Resolution of the main company authorizing the construction of the Philippine Branch Office and assigning a Resident Agent to accept the summons and legal proceedings. 
  • Acceptance of appointment from the Resident Agent.
  • Certified and Audited Financial Statements of the foreign parent company.
  • Affidavit of Solvency signed by the President or Resident Agent testifying sound financial condition of the company.
  • Certified copies of the Articles of Incorporation of the parent company.
  • Certificate of Inward Remittance of the initial capital of US $200,000 or US $100,000, as the case may be. 
Philippine Representative Office 
  • The foreign parent company is required to appoint a Resident Agent who shall receive a summons and other legal proceedings served to or against the Representative Office in the Philippines. The resident agent can be an individual residing in the Philippines or a domestic corporation lawfully doing business in the country.
  • USD 30,000 is the initial foreign inward remittance minimum requirement that should come from its foreign parent company, and another minimum amount of USD 30,000 yearly remittances to cover the operating costs. 
  • Certified copy of the Board resolution of the foreign parent company authorizing the construction of the Philippine Representative Office and assigning a Resident Agent to accept the summons and legal proceedings. 
  • Certified and Audited Financial Statements of the main company
  • Acceptance of appointment from the Resident Agent.
  • Certified copies of the Articles of Incorporation of the head company.
  • Affidavit of Solvency signed by the President or Resident Agent testifying sound financial condition of the company.

Incorporation Procedure:

Domestic Corporation

  1.  Register your business name and have it approved by the Securities and Exchange Commission (SEC). After approval from SEC, a Certificate of Registration will be issued.
  2. Register your company with Local Government Units (LGUs) and obtain:
    • Barangay Clearance from the Barangay Hall
    • Business Permit from the Business Permit and Licensing Office(BPLO) of your local City Hall
    • Mayor’s Permit from the Office of the Mayor
  1. Get a Taxpayer Identification Number (TIN) for your business and get tax registration from the Bureau of Internal Revenue (BIR).
  2. For those hiring employees, you may provide government benefits for your employees through registration to the following:
    • Philippine Health Insurance Corporation (PhilHealth) to provide health insurance benefits
    • Home Development Mutual Fund (HDMF or Pag-Ibig Fund) to provide housing benefits
    • Social Security System (SSS) to provide social security

Sole Proprietorship

  1.  Secure your business name with the Department of Trade and Industry (DTI).
  2.  Submit accomplished forms for assessment and processing.
  3.  Show local bank confirmation of the payment of the minimum required capital.
  4.  Submit requirements. 
  5. Pay necessary fees.
  6.  Obtain registration from DTI. 
  7.  Acquire barangay clearance.
  8. Acquire Mayor’s Permit and Business Permit. 
  9. Register with government agencies BIR, PhilHealth, and SSS. 

Philippine Branch Office

  1. Reserve and register your business name at the Securities and Exchange Commission (SEC).
  2. Get ready to submit corporate documents for verification.
  3. Open a “Non-Resident” account with a local bank.
  4. Accomplish and submit application forms. 
  5. Apply for Corporate Taxation Registration from the Bureau of Internal Revenue (BIR). 
  6. Pay processing fees. 
  7. Obtain Certificate of Registration from SEC. 
  8. Secure Mayor’s Permit and Business Permit. 
  9. Register with government agencies if hiring employees.

Philippine Representative Office 

  1. Reserve your company name at the SEC. 
  2. Submit accomplished documents to SEC for evaluation. 
  3. Show local bank confirmation of the payment of minimum required capital.
  4. Pay necessary fees. 
  5. File BIR registration. 
  6. Get a Certificate of Registration from the SEC. 
  7. Register with Local Government Units (LGUs) and secure: 
    • Barangay Clearance from the Barangay Hall
    • Business Permit from the Business Permit and Licensing Office(BPLO) of your local City Hall
    • Mayor’s Permit from the Office of the Mayor
  1. For those hiring employees, you may provide government benefits for your employees through registration to the following:
    • Philippine Health Insurance Corporation (PhilHealth) to provide health insurance benefits
    • Home Development Mutual Fund (HDMF or Pag-Ibig Fund) to provide housing benefits
    • Social Security System (SSS) to provide social security

Triple i Consulting’s Services Include:

Incorporation is good for almost any business, with its complex structure protecting its members and shareholders. Triple i’s team of consultants and lawyers can guide your company through the complete business incorporation process here in the Philippines.

Alternatively, instead of doing these tedious tasks yourself, you can Contact Us Here, fill out the form below, call us at +63 (02) 8540-9623, or email us at info@tripleiconsulting.com to book an initial consultation with one of our company incorporation experts.

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