Key Takeaways:

  • Company registration in the Philippines, along with the registration for a branch with BIR, needs to be fulfilled within 30 days to avoid penalties.  
  • Limited liability is provided in OPC and Corporation companies, which are highly favored for business growth. Foreign companies may operate with a branch or a representative office; however, the capital and remittance rules are more stringent.  
  • Along with the payment of DTI and SEC, the local business permit, which is renewed every year, is the Mayor’s permit, the clearance from the barangay, and the registrations for SSS, PhilHealth, and Pag-IBIG.  
  • For the compliance requirement, which is periodic, the local accountants and other firm partners, along with the notary and bank services, will streamline the process.

Company Registration in Philippines

Business registration in the Philippines is the process of converting your business idea into a legal entity. After registration, your business can enter into contracts, hire employees, open a bank account, and pay taxes. As an entrepreneur, whether local or foreign, the quickest route from business idea to business operation is knowing which entity to register with (DTI, SEC, or CDA), how to secure a tax ID (BIR), and the local permits required. This guide includes an in-depth, step-by-step roadmap, practical checklists, timelines, and costs you can expect, as well as suggestions to prevent common setbacks when registering a business in the Philippines.

Why register a business in the Philippines?

When you register a business in the Philippines, you get legal recognition, limited liability protection (if you select a corporate form), easier access to banks and loans, and the ability to sign commercial contracts for government work. Tax-compliant businesses gain credibility with clients and investors. Credible clients and businesses value compliance with social security and labor obligations. There are government investor incentives and a growing consumer market, which attracts both foreign and domestic investors.  

Types of business entities (company formation in Philippines)

The legal form you choose is the first and most important step in determining how to incorporate a company in Philippines. Here are the most popular options:  

Sole proprietorship (DTI registration) – Best for a one-person business. You can register quickly, which is particularly beneficial for micro/small traders, freelancers, and home-based sellers. Note: the owner has unlimited liability.  

Partnership– Two or more persons forming a business with a profit/loss share. Partners bear joint liability unless this is limited under a special partnership form.

Domestic Corporation (SEC) — a distinct legal entity with separate liabilities afforded to shareholders. These kinds of businesses include the regular Domestic Corporation (2-15 shareholders for typical forms) and the One Person Corporation (OPC) that lets a single natural person form a corporation. A corporation is a suitable means for businesses to expand, receive investments, and employ formal contracts with staff.

Branch Office / Representative Office (foreign) — foreign businesses can open a branch (permitted to conduct commercial activities) or a representative office (limited to liaison, market research, and activities that do not generate income) in the Philippines. Branches are considered extensions of the parent company and are registered with the Securities and Exchange Commission (SEC). Representative offices need SEC licenses and are subject to capital and remittance rules.

Cooperatives (CDA) — registered through the Cooperative Development Authority for member-owned enterprises.

The choice of structure will depend on the amount of ownership, appetite for risk, capital levels, liability, and whether the company will obtain outside financing.

Company registration requirements in Philippines

Meet the company registration requirements before filing in the Philippines:

  • Identify the appropriate registering agency:
    • DTI for sole proprietorships. 
    • SEC for partnerships and corporations (including OPCs, branches, and representative offices).
    • CDA for cooperatives. 
  • Minimum shareholders/directors: For corporations, there must be at least 2 incorporators, unless it’s a One Person Corporation (OPC), where 1 is allowed. Directors and officers of a corporation must meet residency requirements and eligibility (for OPC and foreign ownership rules, it depends on the industry and the foreign ownership restrictions based on the Philippine Constitution and the statutory list).

  • Registered office/business address: For trade registration and business permits, you will need a physical address in the Philippines.

  • Capital requirements: These differ according to the business entity and industry. Certain foreign branches, as well as representative office registrations, do have minimum remittance and capitalization requirements (for instance, a representative office to fund operating expenses is permitted to have reserved remittance requirements). Regulated industries have sector-specific rules you must follow.

  • Statutory documents: These must include Articles of Incorporation, By-laws (for corporations), Partnership Agreement (if applicable), or DTI registration form for sole proprietorships.

  • Tax registration: It is required to have your BIR registration (Certificate of Registration / BIR Form 2303) and get your TIN, registered books of accounts,  and official receipts within 30 days of your SEC/DTI registration to avoid penalties. You will also be informed of your documentary stamp tax and withholding tax obligations. This registration must be done within 30 days of your SEC/DTI registration.

  • Local permits: The Mayor’s Business Permit, Barangay Clearance, and other municipal requirements include locational clearances and are typically obtained after your SEC/DTI and BIR registrations.

  • Social Security & Payroll: If you are going to hire employees, you need to register with the SSS (Social Security System), PhilHealth, and Pag-IBIG.

Before registering your company, you might need to notarize, apostille/legalize, and possibly translate certain foreign documents. Ask the SEC or your local legal counsel for the precise list.

How to register a company in Philippines

This section covers the typical steps to register a company in Philippines, from the business idea to the first sale.

1. Decide Business Structure & Name  

Choose the type of business entity you want to register (sole proprietorship, partnership, corporation, OPC, branch, or cooperative). After that, reserve and register your company name. The DTI registers business names for sole proprietors, while corporate names for partnerships and corporations are approved by the SEC. Name reservation is a straightforward online process, but remember to check for existing trademarks to avoid conflicts.  

2. Prepare Incorporation Documents  

For corporations, you need to draft the Articles of Incorporation and the By-laws. An OPC requires a simpler and single incorporator set of documents. For partnerships, a partnership agreement is needed. Make sure to include the company’s purpose, the capital structure, details of the incorporators, and the names of the initial directors/officers.

3. If needed, open a bank account and make a capital deposit

In the case of corporations and branches, you might need a bank account certificate of deposit to show proof of paid capital. The specifics of bank and capital formalities will depend on whether the corporation is foreign-owned and on the type of entity. For representative offices, there are minimum remittance requirements to fund the remittance operations.  

4. Register the business name with the SEC.  

For corporations and partnerships, file name reservation and incorporation papers, which include the articles, by-laws, treasurer’s affidavit, proof of inward remittance of foreign equity bank certificate, and other required forms. After processing, the SEC will send you a Certificate of Incorporation.  

In the case of sole proprietorships, you file a business name registration with the DTI, which is generally done online, for the owner’s name and the trade name.

5. Register with the BIR (within 30 days)

Once you have your SEC/DTI registration, you need to register with the BIR to receive your BIR Form 2303 and have the documents necessary to register your books of accounts and get the authority to print official receipts/invoices. Registering with the BIR has to be done within 30 days of getting your SEC/DTI registration to avoid paying fines. 

6. Apply for Local Permits (Mayor’s Permit / Barangay Clearance)

Approach your local government and apply for the Mayor’s Business Permit along with the Barangay Clearance. Local government units will need these for the local licenses you are requesting. 

7. Register Employees with SSS, PhilHealth, and Pag-IBIG

If you hire people, you have to register with SSS, PhilHealth, and Pag-IBIG, and set them up to have the necessary withholdings. Each of these has mandatory contributions and benefits. Make sure your payroll system is set up to withhold and pay the respective contributions and taxes on time and accurately.

8. Sectoral Permits & Regulatory Licenses

Certain activities, such as providing food, transportation, banking, healthcare, and education, or practicing in the mining and telecom industries, will need extra permits or approval from specific regulators. Make sure to include these in your plan for the time and cost involved.

Costs and timeline for business incorporation in Philippines

Costs depend on the type of entity being registered, the need for professional services, and the possible foreign document input and document legalization or apostille. Common incorporation expenses include: 

  • Registration Fees: DTI name registration for sole proprietorships is a small fixed fee. SEC incorporation fees depend on capital and share value. 
  • Notary fees, legal drafting, and incorporation service provision.
  • You will incur bank expenses for capital deposit and certificates. 
  • BIR registration fees and fee printing official receipts also incur expenses.
  • Local business permits and barangay clearances fees also depend on the LGU.
  • Document translation and foreign document apostille and consular fees will also apply.

Indicative Timeline (No sectoral approvals and paperwork are ready)

  • DTI name registration: same day or within 1-2 days
  • SEC name reservation: a few days – 2-3 weeks, depending on whether the requirements are complete and on their queue 
  • BIR registration: typically within days and up to a few weeks, must be done within 30 days of SEC/DTI registration, and is the last step in the process.
  • Mayor’s permit & barangay clearance: a few days to a couple of weeks, depending on LGU processes.

Applications for foreign branches and registrations in highly regulated sectors take longer because they may require additional approvals. 

Documents checklist: what you’ll need

  • For a standard domestic corporation (example checklist):
  • Name reservation confirmation (SEC or DTI).
  • Articles of Incorporation and By-laws (notarized).
  • Treasurer’s Affidavit (and bank certificate of deposit or proof of inward remittance if foreign equity is involved).
  • Consent of incorporators and directors; identification documents (IDs, passports).
  • Taxpayer Identification Numbers (for incorporators if available) and BIR forms.
  • Proof of registered office (lease contract or property title).
  • For foreign incorporators: authenticated corporate documents from home jurisdiction (apostilled/notarized) and translations where necessary.

For sole proprietorship (DTI): DTI online application information, owner’s ID, and proof of business address.

For branch/representative office: Board resolution from parent company, certified copies of parent company’s charter, financial statements, appointment of resident agent (if required), and proof of remittance for representative offices.

Opening a Business Bank Account in the Philippines

Once incorporated, a corporate account should be opened in order to capture capital contributions and to conduct operational activities. To comply with the bank’s Know Your Customer (KYC) documentation, the following are required: 

  • Certificate of Incorporation (SEC/DTI)
  • Articles of Incorporation/By-Laws 
  • BIR Certificate of Registration (Form 2303) or proof of application 
  • IDs and proof of address for signatories and beneficial owners 
  • Board resolution designating authorized signatories (for corporations) 

The bank of a foreign entity may require apostilled corporate documents and proof of beneficial ownership. Some banks require in-person appearances, while others will allow notarized or apostilled documents.

Post-Incorporation Compliance and Ongoing Obligations

After registration is complete, record and maintain these documents for recurring filings and responsibilities: 

  • Tax filings: monthly or quarterly VAT or percentage tax, monthly withholding tax, quarterly income tax installments, and final corporate income tax return. Maintain books of accounts and official receipts as required by the BIR.
  • Local renewals: Mayor’s permit and barangay clearance 
  • Annual SEC filings: Corporations must file annual financial statements and General Information Sheets with the SEC. In some cases, OPCs and small entities have specific simplified reporting. 

Challenges for foreign entrepreneurs registering a company in Philippines

As a foreign entrepreneur, you can definitely register a company in the Philippines, but know the following challenges you might face.  

  • In relation to foreign ownership restrictions, there are some limited activities that are under the Constitution and special laws, and this includes ownership of land and entrance to nationalized industries. You can check the Foreign Investment Negative List and the Foreign Investments Act for more information about this. When this happens, you are expected to have a majority local ownership or a special license.  
  • Regarding documentation, Corporate documents from other countries will certainly incur additional time and expense for apostille or consular legalization and certified translation.  
  • For some banks, there will be face-to-face verification on the part of the non-resident director, or additional due diligence will be provided.  
  • When it comes to sectoral permits in a controlled industry, there are extra approvals that will delay the start of business operations.  
  • Regarding payroll in the Philippines, it is reasonable to expect the labor laws, and more specifically, the mandatory benefits of SSS, PhilHealth, and Pag-IBIG, to be complex, as they involve penalties for mistakes.

Engage closely with local legal counsel, accountants, and formation agents who specialize in foreign incorporations to resolve all issues during the formation of the entity.

Conclusion

Starting a business in the Philippines involves a simple series of steps. First, you need to choose your business’s legal structure. Next, you’ll register a business name and prepare the required documents. After that, you’ll register with the appropriate agency – the DTI for sole proprietorships, the SEC for corporations and partnerships, and cooperatives with the CDA. 

You’ll also need to register with the BIR within 30 days, obtain local permits, and complete the payroll and social security registrations. For most SMEs, the documents are complete the whole process should only take a few weeks, while foreign branches and businesses in regulated sectors take longer. It is recommended that you work with reliable local consultants and that you outsource your accounting and payroll to keep your business compliant while you focus on growth.

How Commenda Helps with Company Registration in Philippines 

Commenda provides comprehensive company registration services in the country, encompassing entity selection, document drafting, SEC/DTI filing, BIR registration, local permits, bank account registration, and more. The company also provides the preparation and submission of articles of incorporation, incorporates the opening and maintenance of foreign company accounts through deposits and wire remittances, and assists in the municipal and barangay permit and clearance acquisition. The company also works with an established network of notaries, accountants, and payroll professionals, which enables it to quickly register the business in the country as SSS/PhilHealth/Pag-IBIG, tax, and sectoral registration, as well as a simplified VAT payer in the country. The clear packages, precise timelines, and the single point of contact help to reduce rework and the time to market with the company. 

Do you want to register a business in the Philippines with the reduction of time and effort? Schedule a Consultation today to receive a personalized incorporation strategy with your company’s cost estimate and incorporation of all services required for continuous support.

Frequently Asked Questions 

What are the steps to register a company in Philippines?

Decide on the business structure, reserve a business name with DTI or SEC, prepare and file incorporation paperwork, obtain BIR registration and tax within the first month, secure a Barangay permit from the Mayor, register employees with SSS/PhilHealth/Pag-IBIG, and obtain any other applicable licenses. 

What is the cost of company incorporation in the Philippines?

Costs range from DTI, which is low, to SEC incorporation, which depends on the authorized capital. Then add on notary, bank, BIR, and LGU permit fees, along with professional service fees. You should have a budget of hundreds to thousands of USD/EUR based on the number of services you select.

Can Commenda assist with the business registration and compliance in the Philippines?

In this case, a partner for a local incorporation business will be able to set aside name reservations, documents for drafts, and SEC DTI BIR filings, and set up the bank for the firm, along with maintaining payroll, to let the firm concentrate on business operations.