Korp.ph | Setting Up a Philippine Subsidiary With a Foreign Parent Company

A foreign company can own up to 100% of a Philippine subsidiary and can be one of its incorporators, but it cannot form the company alone. A Philippine stock corporation needs at least two incorporators and at least two directors, and every director must be a natural person holding at least one share. So a parent-owned subsidiary is formed by the parent together with at least two individuals, each holding a single qualifying share, while the parent holds the rest. The parent's own board resolution, apostilled abroad, authorizes the investment and names who signs for it.

Key Takeaways

A foreign corporation may be an incorporator and the majority or sole economic owner of a Philippine subsidiary. It cannot be the only incorporator, and a One Person Corporation cannot be formed by a company.
The board needs at least two directors, and every director must be a natural person holding at least one share. In a wholly owned subsidiary, each director holds a single nominal share and the parent holds the rest.
The parent supplies four documents, each apostilled where it was issued or signed, or legalized at a Philippine embassy or consulate where the Apostille Convention does not apply.
Owning the shares is not "doing business" in the Philippines, so the parent needs no license of its own as long as it acts as an investor.
Through Korp, the SEC stage takes about four to six weeks with a company as shareholder, against about 10 working days when every shareholder is an individual.

Who is on the paperwork

Since the SEC's 2019 guidelines on incorporators, a Philippine corporation may be formed by any combination of individuals, SEC-registered partnerships, domestic corporations in good standing and foreign corporations, from two to fifteen in all. A single incorporator is possible only as a One Person Corporation, which only an individual, a trust or an estate may form.

The board is where a parent-owned company needs people. A Philippine corporation needs at least two directors, and every director must be a natural person, so the parent itself cannot sit on the board. Each director must also own at least one share, and a director who stops owning one ceases to be a director (Section 22 of the Revised Corporation Code). A typical filing therefore has:

The parent, subscribing to almost all the shares.
Two individuals as directors, each holding one nominal share, while the parent holds the rest. Three directors are common, because a two-member board loses its quorum if one director is absent.
The parent's authorized representative, named in its board resolution, who signs for the parent. The representative may be one of the directors.
The officers. The president must be a director. The treasurer must reside in the Philippines, and the corporate secretary must be a Filipino citizen and resident (Revised Corporation Code, Section 24). Neither needs a board seat or shares.

Every incorporator and signatory holds an eSECURE account and signs the articles and by-laws online through the SEC's eSAP portal, so none of them travels. How to incorporate a corporation online covers the filing steps, and the board of directors covers the directors' other qualifications.

The parent's documents

The parent supplies four documents:

its certificate of incorporation, or equivalent;
its articles of incorporation, or equivalent constitutional documents;
its latest general information sheet, or equivalent;
a board resolution authorizing the investment in the Philippine company and appointing its authorized representative.

Each is apostilled in the country where it was issued or signed. Where that country is outside the Apostille Convention, or is Germany, it is legalized at a Philippine embassy or consulate instead. The order is: the board passes the resolution, it is notarized, then apostilled. A resolution that names the representative, with their passport details, and limits the authority to the Philippine subsidiary avoids a round of corrections.

Scanned copies of the apostilled documents are uploaded with the application. Through Korp, the apostilled originals are sent to the Philippines, where the corporate secretary keeps them with the company's records. After the SEC confirms the application and the fees are paid, it may ask for the original documents.

A company more than 40% foreign-owned also files SEC Form F-100 with its articles.

How much the parent may own, and what it must put in

Foreigners may own up to 100% unless the activity is restricted by the Foreign Investment Negative List or the Constitution. A subsidiary more than 40% foreign-owned that sells to the domestic market needs US$200,000 of paid-in capital, or US$100,000 in three cases; an exporter of 60% or more of its output has no minimum. Minimum capital for a foreign-owned company sets out each case, and the four ways a foreign company enters the Philippines compares a subsidiary with a branch.

The people behind the parent

Since 1 January 2026, every corporation declares its beneficial owners in the SEC's HARBOR registry on incorporation: each natural person holding 20% or more of the voting rights, shares or capital, or, where no one does, each person exercising effective control at any level of the ownership chain. For a subsidiary, that means looking through the parent to the individuals who own or control it.

Owning the shares is not doing business

A parent does not need its own SEC license to own a Philippine subsidiary. The Foreign Investments Act, Section 3(d), states that "doing business" does not include "mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor", nor "having a nominee director or officer to represent its interests in such corporation".

The same section counts other acts as doing business: soliciting orders or service contracts, opening offices, whether called liaison offices or branches, appointing representatives or distributors domiciled in the Philippines or who stay 180 days or more in a calendar year, and participating in the management, supervision or control of a domestic business. A foreign corporation found doing business without a license cannot bring an action in a Philippine court or agency, though it can still be sued (Revised Corporation Code, Section 150).

In practice, the subsidiary signs its own contracts, hires its own staff and is run by its own officers. Parent staff closing Philippine customer contracts in the parent's name, or a parent office in the Philippines separate from the subsidiary, are the patterns that raise the question.

How long it takes

Through Korp, the SEC certificate takes about four to six weeks when a company is a shareholder, against about 10 working days when every shareholder is an individual. Most of the difference is the apostille on the parent's documents, which can start on day one, before anything is filed. BIR registration, the business permit, employer registration and the bank account take about four to six weeks more. These are Korp's figures from its own filings, as of October 2026, not an SEC service standard.

Setting up with Korp

Korp's full registration for a subsidiary with a company as shareholder takes it from SEC incorporation through BIR registration to the mayor's permit, with a corporate secretary and a registered address for the first quarter, so it is ready to open a bank account and trade. As of October 2026 it is from ₱267,500, VAT included; the SEC stage alone is ₱170,000. The price includes SEC and BIR fees up to ₱1,000,000 of capital and a ₱10,000 provision for the city's permit fees; fees beyond those are paid on top. Lines added when the structure needs them: non-resident TINs for foreign incorporators (₱12,000 each), a treasurer-in-trust (₱15,000) and employer registration (₱20,000). The corporate secretary then continues at ₱10,000 a month, VAT included, billed quarterly. See SEC incorporation for foreign founders.

Frequently asked questions

Can a foreign company be the only shareholder of a Philippine subsidiary?

Economically, yes, in activities open to full foreign ownership. On paper, the subsidiary still needs at least two incorporators and at least two directors, and every director must be a natural person holding at least one share. Each director holds a single nominal share and the parent holds the rest.

Does the parent need a license to do business in the Philippines?

Not to own the shares. The Foreign Investments Act excludes mere investment as a shareholder, and having a nominee director or officer, from doing business. Soliciting orders, opening an office, or participating in the management, supervision or control of a domestic business can make it doing business.

Which parent documents must be apostilled?

The parent's certificate of incorporation, its articles or equivalent, its latest general information sheet or equivalent, and a board resolution authorizing the investment and appointing its representative. A country outside the Apostille Convention, or Germany, uses legalization at a Philippine embassy or consulate instead.