Company Registration

There are five main types of business entities in the Philippines:

To register a business in the Philippines, the first step is selecting the appropriate legal structure. Sole proprietorships are registered with the Department of Trade and Industry (DTI), while partnerships and corporations must be registered with the Securities and Exchange Commission (SEC). Once the entity is registered, it must secure a Barangay Clearance and a Mayor’s Permit from the local government unit (LGU) where the business will operate. These local permits are essential before a business can proceed to national-level registrations. This process helps ensure local compliance and community integration.

After local and SEC/DTI registration, businesses must complete their tax and employment-related obligations. Registration with the BIR includes obtaining a Tax Identification Number (TIN), a Certificate of Registration, and authority to print official receipts. Businesses must also register their books of accounts, which must be stamped and approved by the BIR. If the company plans to hire employees, it is mandatory to register with three key government agencies: the Social Security System (SSS), PhilHealth, and Pag-IBIG Fund. These registrations ensure legal compliance with employee benefits and contributions. It is also advisable to open a corporate bank account for financial operations.
For more information, refer to BIR Philippines.

Foreign investors can fully own a business in the Philippines, provided the industry is not included in the Foreign Investment Negative List (FINL). This list identifies sectors that either prohibit or limit foreign equity, often for national security or cultural preservation reasons. For businesses not on the FINL, 100% foreign ownership is permitted, offering attractive opportunities for international entrepreneurs. Common sectors open to foreigners include IT, business process outsourcing (BPO), export trading, and manufacturing. However, registration with the Securities and Exchange Commission (SEC) and compliance with local regulations are required. Investors should always review the latest version of the FINL before setting up operations. Legal consultation is strongly advised to avoid restrictions and ensure proper business structuring.

A minimum paid-up capital of USD 200,000 is typically required for foreign-owned corporations operating in the Philippines. However, this requirement can be reduced to USD 100,000 if the business employs at least 50 Filipino workers or introduces advanced technology to the local market. Additionally, export enterprises—those earning at least 60% of their gross sales from foreign markets—are also eligible for a lower capital threshold. These incentives aim to attract foreign investment that contributes to employment and technological advancement. Businesses must register with the Board of Investments (BOI) or other relevant government agencies to qualify for these exemptions. For more information, refer to Philippine Board of Investments.

Registering a domestic corporation involves submitting several legal and administrative documents to the Securities and Exchange Commission (SEC). Ensuring that all requirements are properly prepared will streamline the registration process and help avoid delays. Below is a summary of the key documents and actions needed.

The duration for registering a business in the Philippines varies depending on the type of entity and how quickly the necessary documents are submitted. For sole proprietorships, the process is relatively straightforward and can be completed within one to two weeks. This includes registration with the Department of Trade and Industry (DTI), the Bureau of Internal Revenue (BIR), and obtaining permits from the local government unit (LGU). These businesses typically require fewer documents and approvals, which speeds up the timeline. However, delays may occur if there are issues with address verification or tax registration. It’s essential to prepare all documents in advance to avoid complications.

Corporations require more time, typically four to six weeks, due to additional steps such as Securities and Exchange Commission (SEC) registration and the preparation of articles of incorporation and bylaws. This process involves more rigorous document checks and may require notarization and legal assistance. For branches and representative offices of foreign companies, the timeline extends to six to eight weeks. These entities must authenticate foreign parent company documents and appoint a resident agent in the Philippines. Coordination with Philippine embassies and consulates may also be required.

In the Philippines, sole proprietorships and partnerships are not subject to an official minimum capital requirement. However, the declared capital should realistically support the business’s operational needs. Domestic corporations with majority Filipino ownership may register with a minimum paid-up capital of PHP 5,000. This flexibility makes it easier for local entrepreneurs to start small-scale ventures. Despite the low capital threshold, banks or suppliers may request proof of financial capability. Entrepreneurs should ensure that their initial capital aligns with projected expenses and growth plans. Proper documentation and compliance with the SEC and DTI are still required.

Foreign-owned corporations in the Philippines face stricter capital regulations. Generally, a fully foreign-owned company must have a paid-up capital of at least USD 200,000. This requirement may be lowered to USD 100,000 if the business involves advanced technology or employs at least 50 Filipino workers. Export-oriented companies that generate at least 60% of revenue from exports are also exempt from the minimum capital rule. Branch offices of foreign companies follow the same USD 200,000 rule, while representative offices must remit a minimum of USD 30,000 for operating expenses.

Corporations operating in the Philippines must register with the Bureau of Internal Revenue (BIR) and comply with ongoing tax requirements. The standard corporate income tax rate is 25%, but a reduced 20% rate is available for businesses with net taxable income below PHP 5 million and total assets under PHP 100 million. Registration with the BIR includes obtaining a Certificate of Registration and securing official invoices or receipts. Businesses must also display their BIR registration documents prominently at their place of business. In addition to income tax, corporations are responsible for withholding taxes on employee salaries, professional fees, and rental payments. These withheld amounts must be remitted to the BIR monthly. Failure to comply with these tax requirements may result in penalties or audits.

Companies with annual gross sales or receipts exceeding PHP 3 million are required to register as VAT taxpayers. Value-Added Tax (VAT) is charged at a rate of 12% on taxable goods and services. Businesses that fall below this threshold may instead be liable for a 3% percentage tax on gross sales. In either case, corporations must file monthly and quarterly returns using the appropriate BIR forms. Additionally, annual income tax returns and audited financial statements must be submitted to the BIR and the Securities and Exchange Commission (SEC). Accurate bookkeeping and timely filing are essential to remain in compliance with Philippine tax laws.

In Thailand, a valid local business address is essential for registering any type of business. This is required for government registration processes and to ensure that official correspondence can be sent to the business. Below are key points to understand about the requirements for a business address:

Registered businesses in the Philippines must comply with several annual filing requirements to maintain their legal standing. Corporations are required to file the General Information Sheet (GIS) and audited financial statements with the Securities and Exchange Commission (SEC) within the specified deadlines. In addition to this, businesses must submit quarterly and annual income tax returns, VAT or percentage tax returns, and withholding tax remittances to the Bureau of Internal Revenue (BIR). These filings ensure that businesses remain in compliance with tax regulations and avoid penalties. Failure to meet these obligations can result in substantial fines or legal repercussions, including the suspension of operations.

Apart from the national-level filings, companies are also required to renew their Mayor’s Permit and Barangay Clearance annually with the local government. Employers must also comply with social security requirements by filing reports and remitting contributions to the Social Security System (SSS), PhilHealth, and Pag-IBIG for their employees. These contributions ensure that employees have access to healthcare, housing benefits, and retirement savings. Non-compliance with these obligations can lead to fines, legal disputes, or even the cancellation of the company’s business registration. Adhering to these local and social security requirements is essential for smooth business operations.
For further details, refer to Philippine Securities and Exchange Commission (SEC).

In conclusion, registering and operating a business in the Philippines involves understanding a range of legal and procedural requirements. From choosing the appropriate business entity to navigating the necessary government registrations, the process is critical for ensuring legal compliance and smooth operations. Foreign investors need to be aware of ownership restrictions and minimum capital requirements, while local businesses must fulfill tax obligations and maintain proper documentation. Annual compliance is essential to avoid penalties and maintain good standing with regulatory authorities. By carefully following these steps and staying informed about changes in regulations, entrepreneurs can successfully establish and grow their businesses in the Philippines.