Domestic versus Foreign Corporation: Registering in Manila’s Key Districts

January 6, 2026

Domestic versus foreign corporation status determines how a business is formed, owned, licensed, and taxed in the Philippines, especially in Manila’s key districts like Makati, Bonifacio Global City (BGC), and Ortigas. Understanding these differences is essential when selecting the right vehicle and determining the appropriate business registration path with the Securities and Exchange Commission (SEC) and local governments.

What Domestic and Foreign Corporations Mean Under Philippine Law

A clear definition of domestic versus foreign corporation is the starting point for deciding how to set up in Manila.

Under the Revised Corporation Code, a domestic corporation is one incorporated under Philippine law and registered with the SEC, while a foreign corporation is incorporated abroad but allowed to do business in the Philippines after obtaining an SEC license. A domestic corporation is a Philippine entity and can be 100% Filipino‑owned or foreign‑owned (subject to foreign ownership limits by sector), whereas a foreign corporation always remains an extension of its overseas parent.

Domestic corporations are taxed on income from sources within and, in some cases, outside the Philippines, depending on residency and activities, while resident foreign corporations (e.g., branches) are taxed only on Philippine‑sourced income.

Core Features of a Domestic Corporation

Domestic corporations are often chosen by investors seeking a fully localized Philippine entity with limited liability.

Key features include:

Incorporated under Philippine law with its own juridical personality distinct from shareholders.
Can be treated as a Philippine national or foreign‑owned Philippine corporation, depending on Filipino versus foreign equity; 100% foreign‑owned domestic corporations are allowed in sectors not listed as restricted in the Foreign Investment Negative List (FINL).
Generally requires at least two incorporators under current rules, which may be individuals or juridical entities.
Can own assets, enter into contracts, sue and be sued in its own name, with shareholder liability usually limited to their paid‑in capital.

Domestic corporations are often better for investors who want long-term market presence, local branding, and potential access to tax incentives from the BOI or PEZA, provided they meet the eligibility criteria.

Core Features of a Foreign Corporation

Foreign corporations that want to operate in Manila’s districts can either incorporate a new Philippine company or apply for an SEC license to act as a branch or other foreign corporate form.

Typical modes include:

Branch office: A resident foreign corporation that is a direct extension of the parent, performing the same activities and earning income in the Philippines, taxed on Philippine‑sourced profits.
Representative office: A cost center that does not earn income locally and is fully funded by parent remittances; used for liaison, marketing, or quality control.
Regional Headquarters (RHQ): Supervisory or coordination hub for affiliates in the region, not allowed to generate Philippine‑source income.
Regional Operating Headquarters (ROHQ): Provides qualifying services to affiliates and may earn income from those related parties under specific rules.

In all cases, the foreign corporation remains a non‑Philippine entity; its Philippine presence is an extension, not a separate company, which has implications for liability, reporting, and tax treatment.

Domestic versus Foreign Corporation: Key Regulatory Differences

The choice between domestic and foreign corporation status affects registration steps and regulatory obligations.

Domestic corporations undergo full incorporation at the SEC by submitting Articles of Incorporation, By‑Laws, a Treasurer’s Affidavit, and meeting any sectoral capital or licensing requirements, after which they register with BIR, LGUs, and social agencies. Foreign corporations skip incorporation but must file for a license using SEC Form F‑103 (for branches), apostilled or consularised parent documents, a certificate of good standing from the home jurisdiction, board resolutions authorising Philippine operations, and the latest audited financial statements.

Applications for new domestic corporations are typically processed within approximately seven days when complete, while foreign licensing can be completed in one to four weeks, depending on the completeness of the documents and the SEC’s evaluation timelines.

Tax Treatment: Domestic versus Resident Foreign Corporations

Tax policy treats domestic and resident foreign corporations differently, which is a major decision factor.

Domestic corporations are generally subject to corporate income tax on income from Philippine sources and, depending on structure, may also be liable on global income, though practical taxation focuses on Philippine‑source business activities. Resident foreign corporations, such as branches, pay income tax only on income effectively connected with their trade or business in the Philippines.

Incentives under regimes like CREATE, BOI, or PEZA can apply to both domestic and resident foreign corporations if they meet eligibility conditions, but incentive qualification often depends on where the entity is registered and whether it meets export or strategic activity thresholds.

Foreign Ownership Limits and FINL Considerations

Foreign investors deciding between domestic versus foreign corporation structures must account for the Foreign Investment Negative List and sector‑specific rules.

Some sectors allow up to 100% foreign ownership via a domestic corporation or branch (e.g., many export‑oriented, IT‑BPM, and manufacturing activities), while others cap foreign equity at 40% or impose higher capital thresholds for retail or specific service activities. Activities fully reserved to Philippine nationals cannot be undertaken by foreign corporations or foreign‑owned domestic corporations, regardless of their registration mode.

Checking the latest FINL and related executive issuances is therefore a critical first step before choosing a structure or Manila location.

Registration in Manila’s Key Districts: Makati, BGC, and Ortigas

Once the domestic versus foreign corporation decision is made, registration in specific business districts follows similar national steps but with local variations.

Common phases in Makati, BGC (Taguig), and Ortigas (Pasig/Mandaluyong) include:

SEC registration or licensing: Domestic corporations file incorporation documents; foreign corporations apply for licenses via eSPARC.
BIR registration: Obtain a Certificate of Registration (Form 2303), register books, and secure authority to print receipts at the relevant Revenue District Office.
Local permits and licenses: Secure Barangay Clearance, Mayor’s/Business Permit, and zoning/locational clearances from Makati, Taguig, or Pasig/Mandaluyong LGUs, which may have BOSS (Business One‑Stop Shop) systems and specific documentation like CGL insurance in Makati.
Social agency registrations: Register as an employer with SSS, PhilHealth, and Pag‑IBIG once hiring begins.

Makati and BGC, being high‑profile financial and technology hubs, often apply closer scrutiny to virtual offices or non‑traditional setups, while Ortigas balances cost and accessibility for many service companies.

Domestic Corporation Registration Flow in Manila’s Districts

For domestic corporations, the typical flow looks like this.

Name reservation via the SEC’s online tools.
Preparation and filing of Articles of Incorporation, By‑Laws, Treasurer’s Affidavit, and proof of paid‑in capital.
SEC issuance of the Certificate of Incorporation.
BIR registration at the RDO with SEC documents, lease contracts, and payment of registration fees and documentary stamp tax.
Barangay and Mayor’s Permit application in Makati, Taguig, or Pasig, with additional fire, sanitary, and locational approvals as required.
Employer registration with SSS, PhilHealth, and Pag‑IBIG.

Experts like Triple i Consulting routinely help clients sequence these steps efficiently, especially for corporations targeting Makati CBD or BGC offices.

Foreign Corporation Licensing Flow for Branches in Manila

Resident foreign corporations, such as branches, follow a different but equally structured process.

Key stages include:

Pre‑application verification with the SEC to confirm reciprocity and FINL eligibility for the proposed activities.
Document preparation abroad, including apostilled or consularised parent Articles and By‑Laws, a recent Certificate of Good Standing, board resolutions authorising Philippine operations and appointing a resident agent, and the latest audited financial statements.
SEC Form F‑103 submission via eSPARC, payment of filing fee (around PHP 2,000), and subsequent fees equal to one‑fifth of one percent of assigned capital (minimum PHP 10,000) plus legal research charges.
License issuance as a foreign corporation authorising it to do business in the Philippines, after which BIR and LGU registrations mirror those of domestic corporations.

Branches are then set up in Makati, BGC, or Ortigas by leasing office space and completing barangay and city permitting, similar to local entities.

Comparing Domestic versus Foreign Corporations for Manila Operations

When deciding between domestic versus foreign corporation models in Manila’s key districts, investors should balance control, branding, tax, and regulatory complexity.

Domestic corporations offer a fully Philippine identity, potential customers and banking advantages, and flexibility in engaging in a broad range of activities that are open to foreign investors, often making them suitable for long‑term, market‑facing operations. Foreign corporations, especially branches, can be quicker to license in some cases and allow centralised control under the parent. Still, they are more clearly seen as extensions of the overseas company and may have narrower activity scopes or perceived distance from the local market.

Final Thoughts

In Manila’s key business districts—Makati, BGC, and Ortigas—the choice between a domestic versus a foreign corporation shapes everything from SEC filings and foreign ownership ceilings to tax exposure and how clients and regulators view your presence.

By understanding how domestic corporations function as separate Philippine entities and how foreign corporations operate through SEC‑licensed branches or representative offices, investors can align their structure with sector rules, FINL limits, and operational goals, then navigate SEC, BIR, and LGU registrations with informed expectations about timelines and obligations.

Get Expert Assistance

Ready to choose between domestic versus foreign corporations for your Manila operations in Makati, BGC, or Ortigas? Contact Triple i Consulting today for expert guidance on SEC registration or licensing, FINL compliance, BIR setup, and full LGU permitting—get your business legally operational fast with our proven one-stop service: