Philippine Business Requirements: Complete Guide for Starting Your Company

December 10, 2025

Corporate Secretary Services Philippines

Navigating Philippine business requirements demands precision for entrepreneurs entering Southeast Asia’s dynamic growth market. From entity selection and capital thresholds to multi-agency registrations and officer appointments, compliance ensures legal protection, banking access, and operational legitimacy.

Popular Business Structures and Their Requirements

Philippine business requirements vary significantly by entity, affecting liability, scalability, and foreign ownership limits.

Domestic Corporations (the most common type) create separate legal personalities with 2-15 incorporators/shareholders (who are natural persons, trusts, estates, or other corporations). Limited liability protects personal assets. One Person Corporations (OPCs) mirror this but with single ownership, which is ideal for solo foreign investors. Sole Proprietorships offer simplicity (DTI registration only) but unlimited owner liability, suitable for micro/home-based ventures.

The Foreign Investment Negative List (FINL) governs ownership, allowing 100% foreign ownership in export manufacturing, IT-BPM, and e-commerce, but restricting it in mass media (100% Filipino ownership), utilities (40% maximum), and land ownership (prohibited).

Detailed Shareholder and Capital Requirements

Core Philippine business requirements hinge on ownership structure and economic contribution.

Domestic Corporations require 2-15 shareholders with ≥60% Filipino-owned needing only PHP 5,000 minimum paid-up capital. In contrast, foreign-owned entities (>40% equity targeting domestic markets) face USD 200,000 standard thresholds, reducible to USD 100,000 for advanced technology users or employers of 50+ Filipinos, and no minimum for 70%+ export-oriented activities.

One Person Corporations mirror these rules but are limited to single ownership (by a natural person, trust, or estate), maintaining identical capital flexibility.

Sole Proprietorships impose no minimum for Filipino owners but demand USD 200,000 for permitted foreign activities under FINL restrictions.

Retail liberalization adds PHP 25M entity-wide requirements for 100% foreign retail operations.

Bank Inward Remittance Certificates provide mandatory SEC proof, while the Anti-Dummy Law criminalizes nominee schemes, imposing fines of up to PHP 200,000 and imprisonment.

Capital Reduction Examples:

Tech startup employing 50+ developers: USD 100,000.
80% export manufacturer: PHP 5,000.
Domestic e-commerce (60% Filipino): PHP 5,000.

Director, Officer, and Governance Requirements

The Revised Corporation Code mandates strict qualifications, central to Philippine business requirements.

Directors (max 15): Natural persons, legal age, ≥1 share ownership, no Corporation Code violations (past 5 years) or crimes >6 years imprisonment. The majority must reside in the Philippines; foreigners need visas (9G/47A2). For OPCs, the sole director is the shareholder.

Mandatory Officers:

President: Shareholder-director; signs contracts.
Treasurer: Philippine resident; manages finances (OPC dual-role needs surety bond = authorized capital).
Corporate Secretary: Filipino citizen/resident; handles compliance, GIS filings.

Foreign-majority firms maintain proportional Filipino representation. Annual board meetings are subject to quorum rules.

Example Structure (Foreign 100% Corp):

President: Foreign CEO (9G visa).
Treasurer: Foreign CFO (resident).
Secretary: Filipino lawyer.

Complete SEC Registration Process (SEC ZERO/eSPARC)

Digital platforms fulfill primary Philippine business requirements for juridical entities.

Phase 1: Name Reservation (1-3 days)

eSPARC verification; avoid “Corp/Inc/OPC/Co” without registration (RCC Sec 18 violation: PHP 10K-200K fine). Valid 30-90 days.

Phase 2: Document Preparation (1-2 weeks)

SEC Cover Sheet.
Articles of Incorporation (FINL-compliant primary purpose).
Bylaws (quorum, meetings, amendments).
Treasurer’s Affidavit (capital proof).
SEC F-100/F-105 (foreign equity).
Apostilled parent docs + translations.

SEC ZERO eliminates notarization via eSAP.

Phase 3: Submission & Approval (2-4 weeks)

Upload eSPARC: fees = 1/5 of 1% authorized capital (min PHP 2,000) + 1% legal research. Digital Certificate issued.
DTI BNRS (Sole Props): 1-day processing, 5-year validity.

Total Timeline: 3-6 weeks.

Local Government Unit (LGU) Authorization Process

LGU compliance represents critical Philippine business requirements post-SEC.

Barangay Clearance (1-3 days): Community endorsement.
Mayor’s/Business Permit (1-3 weeks): Requires SEC/DTI certs, lease/title, Fire Safety Inspection Certificate (FSIC), Sanitary Permit, Zoning/Locational Clearance, and BIR 2303.

Annual renewal; fees based on gross receipts (Class A highest). Virtual offices are acceptable if compliant.

Metro Manila vs. Provincial: Manila/Quezon City offers e-permits; provinces still process manually.

BIR Tax Registration: Detailed Requirements

BIR operationalizes Philippine business requirements for revenue compliance.

At Revenue District Office/NewBizReg:

BIR Form 1903 (corps)/1901 (sole proprietorship)
SEC/DTI/Mayor’s Permit
Lease contract
Authorization letter

Yields: TIN, books registration, official receipts authority, Form 2303. VAT threshold: PHP 3M annual sales. Processing: 1-2 weeks.

eFPS/eBIRForms: Electronic filing mandatory for larger firms.

Mandatory Employer Registrations

Staffing triggers Philippine business requirements for social security.

SSS: R-1 (employer), R-1A (employees); monthly remittances.
PhilHealth: ER1/ER2; 4.5-5% premium share.
Pag-IBIG: Employer setup; 2% contribution.

2-day processing; violations = PHP 5K-20K fines/month.

Sector-Specific and Foreign Investor Requirements

Foreign-Focused Philippine business requirements:

FINL clearance (100% OK: exports, BPO; restricted: media/utilities).
USD 200K capital (exceptions: jobs/tech/exports).
Branches/Rep Offices: SEC License + resident agent.
Proportionate Filipino officers/directors.

Incentivized Sectors (BOI/PEZA): Tax holidays, duty-free imports (70% export rule).

Ongoing Annual Compliance Obligations

Staying compliant with ongoing regulatory duties is a core part of Philippine business requirements and helps keep your company in good standing. These obligations recur annually or periodically and involve several key government agencies.

Securities and Exchange Commission (SEC): Corporations and OPCs must file an updated General Information Sheet and audited financial statements every year, within prescribed deadlines counted from the annual stockholders’ or members’ meeting. These filings keep the SEC informed about current directors, officers, ownership, and financial condition; failure to submit them can lead to fines or, in serious cases, suspension or revocation of registration.
Bureau of Internal Revenue (BIR): Businesses need to file regular tax returns, including monthly or quarterly VAT/percentage tax and withholding tax declarations, along with quarterly and annual income tax returns. Keeping books of accounts updated and issuing properly registered official receipts and invoices are essential components of tax compliance, as lapses can result in surcharges, interest, and increased audit exposure.
Local Government Unit (LGU): The Mayor’s or Business Permit must be renewed annually with the city or municipality where the business is located, usually at the start of the year. Renewal involves declaring gross sales or receipts, paying local business taxes and regulatory fees, and updating any required clearances, such as fire safety or sanitary permits.
Social Security Agencies (SSS, PhilHealth, Pag-IBIG): Employers are required to remit contributions for their employees to the Social Security System, PhilHealth, and Pag-IBIG on a monthly or scheduled basis. These contributions fund retirement, sickness, disability, health insurance, and housing benefits. Non-payment can lead to penalties, collection actions, and potential personal liability for responsible officers.

Practical Timelines, Costs, and Tips

Full Setup Timeline: 6-12 weeks (SEC 3-6w, LGU/BIR 2-4w, social 2d, bank 2-4w).
Cost Breakdown: PHP 20K-50K (local), USD 3K-5K (foreign).
Pro Tips: Use virtual offices (Makati CBD), SEC-accredited secretaries, and professionals for FINL/foreign setups.

Final Thoughts

Comprehensive Philippine business registration requirements, from SEC ZERO digitization to nuanced capital rules, enable structured market entry. Local entrepreneurs enjoy minimums of PHP 5,000; foreigners navigate thresholds of USD 200,000 strategically. Expert guidance accelerates compliance across 7+ agencies for sustainable operations.