01 · Can you own it
Can foreigners own this activity?
The starting point is the Foreign Investments Act: foreigners may own up to 100% of a Philippine enterprise unless the Constitution, the Foreign Investment Negative List or a specific law says otherwise. Check the activity before anything else, because it decides every question that follows.
The Negative List
The current list is the 13th, issued as Executive Order 113 in April 2026. It bars foreigners from some activities and caps their share in others at 25%, 30% or 40%. Most private consulting is not on it: the 40% consulting entry covers government procurement only. Accounting sold to Philippine clients is reserved to Filipino CPAs.
Read our guide to the Negative List.
The Constitution
Private land and public utilities are reserved to Filipinos and to companies at least 60% Filipino-owned. Since the amended Public Service Act, “public utility” covers only electricity distribution and transmission, water and wastewater pipelines, petroleum pipelines, seaports and public utility vehicles. Other public services, such as telecommunications, shipping, air and rail, can be up to 100% foreign-owned, subject to national-security safeguards.
Retail
A foreign retailer needs at least ₱25 million of paid-up capital, and ₱10 million per store if it has more than one. Below ₱25 million, foreign ownership of a retail business is capped at 40%.
The Anti-Dummy Law
Where an activity is capped, the cap is real. Nominee or dummy shareholders used to get around it are prohibited, and foreigners’ seats on the board and in management are limited to their share of the equity.
02 · Sell here or export
Will the company sell in the Philippines, or export?
This question sets the capital. The rule turns on two things: how much of the company foreigners own, and where its revenue comes from.
Sells in the Philippines
US$200,000 paid in
A company more than 40% foreign-owned that sells to the Philippine market must have at least US$200,000 of paid-in capital. That is money actually paid in for shares, not the authorized capital written in the articles. The floor drops to US$100,000 if the company meets any one of these:
1It uses advanced technology, as determined by the Department of Science and Technology.
2It is endorsed as a startup or startup enabler under the Innovative Startup Act.
3A majority of its direct employees are Filipino, and there are at least 15 of them.
Exports at least 60%
No minimum capital
A company that exports at least 60% of its output, goods or services, can be up to 100% foreign-owned with no minimum paid-in capital, provided the activity is not on the Negative List. An outsourcing or back-office company billing clients abroad fits here if at least 60% of its output is exported.
1The export test continues: it isn’t checked once at incorporation.
2An export enterprise that is not a Philippine national registers with the Board of Investments and reports to it.
3Below 60%, the SEC can order it to cut its domestic sales to no more than 40% of its total, and failing that, cancel its registration.
At 40% foreign or less, the US$200,000 floor doesn’t apply. A company 60% owned by Filipinos has no statutory minimum capital, but the Filipino shareholding must be genuine. Read
how to set up without the US$200,000 minimum.
03 · Choose a vehicle
Which vehicle?
A foreign founder can set up a domestic corporation, owned personally or through a parent company. A foreign company can instead extend itself into the Philippines through a branch or one of three other licensed offices.
Domestic corporation (subsidiary)
Philippine incomeYes
Capital or remittanceUS$200,000 paid in, US$100,000 under conditions, none for an exporter
Licensed bySEC incorporation
Philippine incomeYes
Capital or remittanceSame thresholds as a subsidiary, plus a ₱500,000 securities deposit
Licensed bySEC license
Philippine incomeNo
Capital or remittanceUS$30,000 every year
Licensed bySEC license
Regional headquarters (RHQ)
Philippine incomeNo
Capital or remittanceUS$50,000 every year
Licensed bySEC license, on BOI endorsement
Regional operating headquarters (ROHQ)
Philippine incomeOnly from services to its own affiliates
Capital or remittanceUS$200,000, once
Licensed bySEC license, on BOI endorsement
A branch is never cheaper than a subsidiary
It carries the same capital floor, and on top of it a ₱500,000 securities deposit. Like a representative office, it needs a resident agent in the Philippines. See
domestic corporation vs branch office.
A representative office cannot sell
It deals with the parent’s clients, promotes its products and handles quality control, funded entirely by the head office. A team doing revenue-generating work belongs in a subsidiary or branch. See
representative office vs branch office.
04 · The board
Who will sit on the board?
A foreign parent company can be an incorporator, but never the only one. An ordinary corporation needs at least two incorporators, and the one-incorporator route, the One Person Corporation, is open only to an individual, a trust or an estate.
Every director must be an individual who owns at least one share, and there must be at least two. So a wholly owned subsidiary takes this shape: the parent holds all but a few shares, and two individuals each hold one nominal share as a director. Those shares are usually assigned back to the parent in writing at incorporation, so the individuals hold no economic interest. A third director keeps the board working if one director leaves.
Directors
2+ individualsEach owns at least one share.
President
A director · any nationalityThere is no citizenship or residency requirement, so the parent’s own person can take it.
Treasurer
Lives in the PhilippinesNeedn’t be a director or a shareholder.
Corporate secretary
Filipino citizen, residentOne person can hold two compatible offices, but not president and secretary, or president and treasurer, at the same time.
Beneficial owners
At incorporation, the company declares every individual holding 20% or more of its shares or voting rights, or otherwise controlling it, in the SEC’s HARBOR registry.
Working in the company
A company that employs a foreign national in the Philippines needs an employment permit from DOLE, and the employee a 9(g) work visa. See
Employer registration.
05 · Signing from abroad
Signing from abroad
You don’t need to travel to incorporate. The SEC’s filing system has every incorporator open an eSECURE account and sign through eSAP, the SEC’s own electronic authentication, from anywhere and without a notary.
What still needs paperwork is anything signed abroad on paper. The usual case is a foreign parent company’s board resolution authorizing the investment and naming who signs for it:
From an Apostille Convention country
Have it notarized locally and apostilled by that country’s competent authority. It then needs nothing from a Philippine embassy.
From Germany, or a country outside the Convention
Have it authenticated by the Philippine embassy or consulate.
Apostille turnaround is the main reason a filing with a corporate shareholder takes longer: about 4 to 6 weeks to the SEC certificate, against about 10 working days when every shareholder is an individual. The parent’s documents can be prepared from day one, in parallel.
06 · Tax and incentives
Tax and incentives
Corporate income tax
25% of net taxable income, or 20% for a domestic corporation with net taxable income of ₱5 million or less and total assets of ₱100 million or less, excluding land. A branch pays 25%, plus the 15% tax on profits it remits.
Shares
Documentary stamp tax of 0.75% of par value on the shares issued at incorporation.
Export services
A VAT-registered company’s export sales are zero-rated when paid in foreign currency and inwardly remitted under BSP rules, and invoiced as zero-rated sales. No separate BIR classification is needed. See
BIR registration.
BOI and PEZA incentives
Registered enterprises can get an income tax holiday, then a 5% special rate on gross income or a 20% corporate rate with enhanced deductions. korp.ph doesn’t usually recommend incentive registration for an export services company whose costs are mostly salaries, because its export sales are already zero-rated for VAT.
Foreigners cannot own land in the Philippines, and neither can a company more than 40% foreign-owned.
07 · The six stages
What changes at each stage
The registration steps that follow are the same for every company. Here is what is different for a foreign founder.
01
Registered address
Principal officeThe same for every founder.
02
SEC incorporation
SECCheck the activity against the Negative List first, remit the paid-in capital from abroad and name two individual directors. Documents signed abroad need an apostille or embassy authentication, and a company as shareholder takes this stage to 4 to 6 weeks.
03
BIR registration
BIRAn exporter registers for VAT to zero-rate its export sales, with no separate classification. A branch’s profits sent to its head office carry a further 15%.
04
Business permit
City hallThe same for every founder.
05
Bank account
Your bankAbove 40% foreign ownership, the paid-in capital still goes through a treasurer-in-trust account, converted once the SEC registers the company.
06
Employer registration
SSS · PhilHealth · Pag-IBIGA foreign employee needs a DOLE employment permit, which the 9(g) work visa relies on.
08 · Common mistakes
Where foreign setups go wrong
✕Assuming a 60/40 rule applies to every business. Outside the Negative List, it doesn’t.
✕Using a nominee or side agreement to get around a cap, which is illegal under the Anti-Dummy Law.
✕Confusing authorized capital with paid-in capital, or treating the 60% export ratio as a one-time test.
✕Choosing a representative office to save capital, then invoicing local customers through it.
✕Finding out late that there is no resident treasurer or eligible corporate secretary.
✕Running the business on a visitor visa, or working from an outdated Negative List.
09 · FAQ
Frequently asked questions
Can a foreigner own 100% of a company in the Philippines?
Yes, unless the activity is on the Foreign Investment Negative List or reserved by the Constitution. Above 40% foreign ownership, a company selling in the Philippines needs at least US$200,000 of paid-in capital; an exporter needs none.
What is the minimum capital for a foreign-owned company?
US$200,000 of paid-in capital for a company more than 40% foreign-owned that sells in the Philippines, or US$100,000 with advanced technology, a startup endorsement, or at least 15 direct employees who are mostly Filipino. A company exporting 60% or more of its output has no minimum.
Do I need to travel to the Philippines to incorporate?
No. Incorporators sign through the SEC’s online system. Only documents signed abroad on paper, such as a parent company’s board resolution, need an apostille or embassy authentication.
Should I set up a branch or a subsidiary?
A branch has the same capital floor as a subsidiary, plus a ₱500,000 securities deposit. A subsidiary is a Philippine corporation in its own right.
