Setting Up a Company in the Philippines: The Practical Path
Editor's note: This article covers a field in which the site's operating company has business interests. It is compiled from publicly available and primary sources.
Pick your vehicle first
The Philippines offers several distinct legal forms, and the choice determines your capital requirement, liability exposure, and what you're allowed to do:
| Form | Legal personality | Can earn revenue? | 100% foreign-owned? | Typical minimum capital |
|---|---|---|---|---|
| Representative Office | No — an extension of the parent | No (cannot earn Philippine-source income) | N/A | Inward remittance of US$30,000+ |
| Branch Office | No — an extension of the parent | Yes | Treated as 100% foreign if the parent is foreign | US$200,000 for domestic-market activity (or US$100,000 if an exemption applies); no minimum for export-oriented branches |
| Domestic Stock Corporation | Yes | Yes | Depends on the activity | No statutory minimum since the 2019 Revised Corporation Code — but US$200,000 applies if foreign equity exceeds 40% and the business serves the domestic market |
| One Person Corporation (OPC) | Yes | Yes | Depends on the activity (must be 100%-open sectors) | No statutory minimum |
A Representative or Branch Office is legally an extension of the parent — its Philippine liabilities can reach the parent's own assets. If liability containment matters to you, a Domestic Stock Corporation is the more common choice for that reason alone.
注 A Representative Office cannot solicit orders or sign sales contracts in the Philippines — negotiation and execution of sales must happen outside the country. It can, however, sign contracts related to running the office itself (lease, employment).
The US$200,000 rule and its exemptions
For a domestic-market enterprise with foreign equity above 40%, the default minimum paid-in capital is US$200,000. This drops to US$100,000 if any one of three conditions is met:
- The business uses advanced technology certified by the Department of Science and Technology (DOST); or
- It is certified as a startup or startup enabler under the Innovative Startup Act (RA 11337); or
- It directly employs at least 15 Filipinos, comprising a majority of its workforce.
Export-oriented enterprises are exempt from the minimum capital requirement entirely — defined as manufacturing, processing, or service (including tourism) businesses that export at least 60% of sales or output.
A persistent error worth flagging: the older threshold was 50 employees, not 15. RA 8179 (1996) originally required 50 direct employees; RA 11647 (2022) lowered this to 15 and added the startup-certification option. This 50-employee figure still circulates widely — even a JETRO document updated 1 November 2025 correctly states "15 employees (formerly 50)" in its main text but leaves the old "50 employees" language in an accompanying document checklist. Always check the current implementing rules, not older secondary summaries.
SEC registration is now largely paperless
As of 2025, company registration runs through the Securities and Exchange Commission's eSPARC and OneSEC online systems, with SEC ZERO (SEC Circular No. 3, s. 2025, effective 4 April 2025) making Articles of Incorporation and By-Laws auto-generated and mandatory for corporations using these channels — largely eliminating the need for notarization runs and in-person filing.
Rough costs: SEC registration fee is about 0.1% of authorized capital plus a 20% surcharge on that fee, plus a 1% examination fee; branch/representative office registration is 0.1% of the initial remittance or ₱1,000, whichever is greater.
Branch offices carry an extra obligation: within 60 days of SEC registration, a branch must deposit securities worth at least ₱500,000 with the SEC as a security deposit, plus 2% of any annual gross income above ₱5 million, plus an annual monitoring fee.
After SEC registration: the permit sequence
- Barangay Clearance (local barangay office)
- Mayor's/Business Permit (city/municipal hall) — renewed annually, typically involves a site inspection
- Community Tax Certificate — renewed annually
- BIR Taxpayer Identification Number (TIN) — sometimes issued concurrently with SEC registration now
- BIR Certificate of Registration (BIR Form 2303)
- BSP foreign investment registration (optional, but needed if you want to source foreign currency through authorized agent banks for dividend repatriation later)
- SSS / PhilHealth / Pag-IBIG registration once you hire employees
Primary sources: Republic Act No. 7042 (Foreign Investments Act) as amended by RA 8179 and RA 11647; Republic Act No. 11232 (Revised Corporation Code); SEC Memorandum Circular No. 3, s. 2025; SEC Memorandum Circular No. 7, s. 2019 (One Person Corporation guidelines); JETRO Manila company-formation procedure guide (updated 1 November 2025).
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