How to Start a Business in the Philippines as a Foreigner

October 22, 2025

Foreigners looking to pursue new opportunities in Southeast Asia are turning more and more to the Philippine business landscape. With its growing economy, strategic ASEAN location, and a large, English-speaking talent pool, the country offers a promising environment for investment and entrepreneurship. However, foreign nationals who wish to form business in the Philippines need to understand the regulatory landscape, restrictions, and procedural requirements that can be more complex than in other markets.

The Basics: Can a Foreigner Own a Business in the Philippines?

Yes, but with conditions. Philippine law welcomes foreign direct investment in many sectors, yet maintains restrictions on ownership and activities through the Foreign Investments Act (FIA), the Philippine Constitution, and sector-specific laws.

Fully foreign-owned companies are permitted in sectors not included in the Foreign Investment Negative List (FINL). However, there are equity caps and certain minimum capital requirements, especially when the company will serve the local market.

Common options for foreigners include:

Domestic corporations with up to 100% foreign equity (allowed for most export-oriented businesses and sectors not in the FINL)
Branch or representative offices of foreign companies
Regional Headquarters (RHQ) or Regional Operating Headquarters (ROHQ)
Joint ventures or minority participation in companies that require a Filipino majority (common in mass media, retail, land ownership, and others)

How to Form a Business in the Philippines as a Foreigner

To form a business in the Philippines as a foreigner, here are the steps that you need to follow:

Step 1: Understand Ownership Restrictions and the FINL

The Foreign Investment Negative List (FINL) identifies which sectors are either fully reserved for Filipinos or allow only limited foreign ownership (usually capped at 40%). Typically, these sectors include:

Mass media and broadcasting
Small-scale mining, fisheries/marine resources, and certain natural resource exploitation
Ownership of private lands
Retail trade for investments below USD 500,000
Certain professions (unless reciprocity clauses apply)

Industries outside the FINL, particularly those that are export-oriented or engage in business process outsourcing, can often be 100% foreign-owned if the minimum capital requirements are met.

Step 2: Choose Your Business Structure

Foreigners in the Philippines can typically choose from the following business structures:

Domestic Corporation

From 0% to 100%, foreign equity is allowed, depending on the industry’s limitations. The main requirements include:

Minimum of 2 and up to 15 incorporators (can be all foreigners, if permitted)
Board of Directors: at least a majority must be residents in the Philippines
Minimum paid-up capital: USD 200,000 (about PHP 10 million) for most foreign-owned corporations catering to the local market; USD 100,000 if advanced technology or with significant local hires
Only PHP 5,000 is needed if at least 60% of shares are Filipino-owned

Branch Office

A branch office is an extension of a foreign company and may conduct business and generate income. Requirements:

Minimum inward remittance of USD 200,000
Parent company remains liable for the branch’s obligations
Limited to activities allowed under the parent’s charter and not prohibited by local regulations

Representative Office

Cannot earn income in the Philippines and is limited to information dissemination, quality control, or acting as a liaison. Requires an inward remittance of USD 30,000 annually.

Regional HQ (RHQ) and Regional Operating HQ (ROHQ)

Designed for multinational companies looking to coordinate or support affiliates in Asia-Pacific, with varying activity and income restrictions.

Step 3: Prepare and Organize the Required Documents

Domestic Corporations:

Articles of Incorporation and By-laws
Treasurer’s Affidavit (with deposit slip evidencing capital)
Passport and identification for all foreign incorporators
Board resolution authorizing formation (if entities are incorporators)
Proof of inward remittance for capital
Name verification/clearance from the SEC

Branch/Rep Offices:

Certified copy of the parent company’s articles/incorporation documents, by-laws, and board resolution
Audited financial statements of the parent company
Application form for a license to do business (SEC Form F-104)
Notarized appointment of a resident agent
Proof of inward remittance

Documents issued abroad usually require authentication (apostille or consularization).

Step 4: Register with Philippine Authorities

Securities and Exchange Commission (SEC)
Domestic corporations, branches, representatives, RHQ, and ROHQ must register with the SEC. This entails verifying the business name, submitting all application documents, and paying registration fees.
Department of Trade and Industry (DTI)
For sole proprietorships (which can only be owned by Filipinos).
Local Government Unit (LGU)
Secure Barangay Clearance, Mayor’s Permit, and other local business licenses after receiving your SEC Certificate of Incorporation or License to Do Business.
Bureau of Internal Revenue (BIR)
Register for a Tax Identification Number (TIN), books of accounts, and official receipt authority.
Social Agencies
Register with SSS, PhilHealth, and Pag-IBIG Fund for employees.
Special Economic Zones (PEZA)
For export-focused or IT/BPO businesses registering in designated ecozones, additional registration is needed to obtain tax incentives.

Step 5: Bank Account and Capitalization

Open the company’s bank account and remit the required minimum capital. For foreign-owned companies, documentary proof of this inward remittance is a cornerstone of regulatory compliance.

Step 6: Obtain Other Sector-Specific Licenses

Depending on the nature of your business, you may also need:

FDA registration (for food, drugs, cosmetics)
BSP authority (for financial institutions)
Philippine Contractors Accreditation Board (PCAB) license (for construction)
Environmental clearances (DENR, LGU)
Additional agency approvals for certain strategic or regulated industries

Important Tips for Foreign Entrepreneurs

Visa and Work Permits: Foreign directors, officers, or employees must have appropriate working visas, such as the 9(g) or Special Investor’s Resident Visa (SIRV), and Alien Employment Permits (AEP).
Intellectual Property: Consider registering trademarks, copyrights, or patents with the Intellectual Property Office of the Philippines (IPOPHL).
Tax Incentives: Explore PEZA, BOI, or other government incentive programs.
Annual Reporting: Corporations are obliged to submit General Information Sheets (GIS), Audited Financial Statements (AFS), and renew business permits annually.
Legal Representation: Appoint a resident agent or engage legal consultants for ongoing compliance.

Common Mistakes to Avoid

Unverified Ownership Restrictions: Attempting to register in a restricted sector without proper Filipino equity can lead to denial or cancellation.
Incomplete Documentation: Missing apostille, consularization, or signatures can delay registration.
Failure to Renew Permits/Reports: Lapsed permits trigger penalties or suspension of operations.
Underestimating Capital Needs: Some businesses may need additional capital for market entry or expansion beyond legal minimums.
Neglecting Post-Setup Compliance: Annual filings, taxes, and local renewal requirements can be complex; ongoing oversight is important.

Final Insights

To successfully form a business in the Philippines as a foreigner, preparation, attention to detail, and reliable guidance are essential. By understanding regulatory frameworks, choosing suitable structures, and leveraging professional support, foreign entrepreneurs build a strong foundation for growth in one of Southeast Asia’s most dynamic markets.

Is Assistance Available?

Yes. Setting up a business as a foreigner in the Philippines remains more bureaucratic and challenging than in many jurisdictions. Experienced advisors like Triple i Consulting streamline the process, ensuring: