Do business
in the Philippines

It depends on the business sector and type. For export enterprises (60%+ of output exported), 100% foreign ownership is allowed. For domestic market enterprises, foreign ownership is generally limited to 40% unless the business has minimum USD 200,000 paid-up capital. Certain sectors like retail trade, telecommunications, and mass media have specific restrictions under the Foreign Investment Negative List (FINL). However, sectors like manufacturing, IT/BPO, and tourism allow full foreign ownership with proper capitalization.

The complete incorporation process in the Philippines typically takes 45 days to 3 months. SEC company registration alone takes 2-4 weeks, but additional permits from local government units (Barangay clearance, Mayor’s permit), BIR tax registration, and other agency registrations extend the timeline. Processing can be expedited with proper preparation of all required documents and working with experienced local professionals.

No, physical presence is not required for incorporation. The entire process can be handled remotely through authorized representatives or local corporate services providers. You’ll need to provide notarized and apostilled documents (Articles of Incorporation, power of attorney) and can conduct board meetings virtually. However, you must appoint Filipino officers (corporate secretary must be Filipino citizen) and maintain a registered local address.

The standard corporate income tax rate is 25% on net income. Small and medium enterprises with net taxable income below PHP 5 million and total assets under PHP 100 million qualify for a reduced rate of 20%. Additional taxes include 12% VAT (if gross receipts exceed PHP 3 million annually), minimum corporate income tax of 2% on gross income (starting 4th year), and various local business taxes depending on location.

While there’s no specific requirement for a “resident director,” the majority of directors must reside in the Philippines. More importantly, the corporate secretary must be a Filipino citizen, and the treasurer must be a Philippine resident. At least 2-15 incorporators/directors are required, with specific officer positions (President, Corporate Secretary, Treasurer, Compliance Officer) that must be filled by qualified individuals meeting residency/citizenship requirements.