Update: Many people are inquiring about how to start a foundation in the Philippines, but decide not to after discovering there is a P1,000,000 paid-up capital requirement. Instead, you may want to consider incorporating a Non-Stock Non-Profit Organization. You can read more about the differences between a foundation and a non-stock non-profit organization here. Also, you may contact us for an initial consultation to help you accomplish this.
Starting a Foundation in the Philippines is somehow similar to starting a profit-generating business. A Foundation is a type of non-profitable organization that should donate money or goods for charitable reasons.
While this corporation enjoys some tax breaks, legal procedures must be followed during the setup of this structure. Articles of Incorporation must be provided, paid-up capital must be deposited into a bank account of the company and local and national permits must be secured.
The foundation must be initially registered with the Securities & Exchange Commission (SEC), followed by the registration with the Bureau of Internal Revenue (BIR) and the Philippine Council for NGO Certification.
Furthermore, if you are looking to start a foundation or you are looking into establishing one, it is you should be aware of the SEC’s new requirements.
In accordance with the newly efficient processing regulation implemented by the Philippine government, the Securities and Exchange Commission (SEC) issued a modified Memorandum Circular of Section 4 of MC no. 8-2006.
During the period of time preceding the modified memorandum, the SEC requires all registered foundations to supplicate sworn statements (SS) of its president and treasurer of the sources, amount and application of planned program/activities funds, both ongoing and accomplished, and the certificate of existence of program/ activity (COEP), on top of its GIS and AFS.
On the other hand, MC 15-2016 states that the requirements to be submitted to the SS and COEP by the registered foundations are only to be the following:
- Those receiving funds from any Philippine government agencies and instrumentalities; or,
- Those receiving donations/ grants/ contributions amounting to at least P500,000 in one or aggregate transaction per donor/ grantor/ contributor.
Foundations that do not fall under these categories can give forth requirements provided they comply with certifications with the SS & COEP stating that:
- They have not received government funds nor received donations/ grants/ contributions within the said threshold for their operations; and,
- There is no pending action or proceeding before any Court involving an intra-corporate dispute and claims by any person against the foundation, its trustees/ and or corporate officers.
If you would like us to walk you through the legal process and register a foundation with the SEC, BIR and the Philippine Council for NGO Certification, do not hesitate to contact us for an initial consultation. With dozens of foundations registered in the Philippines, our business consultants are ready to assist you.