Setting Up a Company in the Philippines as a Foreign Founder

As of October 2026

Not legal advice. This guide is general information drawn from published government sources. Philippine rules change often. Confirm your plans with qualified Philippine counsel before you act.

Most Philippine businesses can be fully foreign-owned, and the law limits how long agencies may take on routine filings. The tricky parts are picking the right vehicle, meeting the capital floor for foreign-owned companies, and getting the registration order right. Each figure links to the official source it comes from. Where published rules don't give a clear answer, we flag it with "confirm with counsel."

Can a foreigner own 100% of a Philippine company?

Usually, yes. Under the Foreign Investments Act, foreign investors may own up to 100% of a Philippine business unless the Constitution, a specific law, or the Foreign Investment Negative List limits it (FIA Implementing Rules; Board of Investments FAQ).

The Negative List is the document to check first. The current version is the 13th Regular Foreign Investment Negative List, issued by Executive Order No. 113, s. 2026, signed April 13, 2026. It is effective early May 2026 per published reports — confirm with counsel. Examples: mass media, 0% foreign equity; advertising, up to 30%; retail trade with paid-up capital under ₱25 million, up to 40%; land ownership, up to 40%. If your business touches any listed area, read the list closely.

One limit catches many small founders. Small domestic-market companies are reserved for Filipinos. If your company does not export at least 60% of its output and is more than 40% foreign-owned, it generally needs at least US$200,000 in paid-in equity capital. That drops to US$100,000 if the company:

• involves advanced technology, as certified by the Department of Science and Technology (DOST),
• is a startup or startup enabler endorsed by DTI, DICT, or DOST under the Innovative Startup Act, or
• undertakes that a majority of its direct employees are Filipino, and no fewer than 15. This is a notarized undertaking certified by the regional labor office (DOLE), which checks compliance within 6 months of starting commercial operations; if it isn't met, the company can be required to put in the higher capital.

Source: FIA Implementing Rules, Rule XII §39(c) and §19(c); Republic Act No. 11647, §8; 13th Negative List, List B items 6–7.

Export companies are treated differently. Under the same rules, an export enterprise is one that exports 60% or more of its output, and foreign ownership of up to 100% is allowed if its products and services aren't on the Negative List; the US$200,000 domestic-market floor is written for domestic-market enterprises. Foreign-owned export enterprises register with the Board of Investments and file annual reports, and can be ordered to cut domestic sales to 40% if they miss the export requirement (FIA Implementing Rules, Rule I §1(k),(n); Rule VIII §§25–28). Whether your revenue model counts as exporting (for example, services delivered to overseas clients): confirm with counsel.

Choosing your legal vehicle

Your choice depends on whether you'll earn local income and how much capital you can commit.

Two things to watch:

• Branch capital reduction. The Board of Investments page still describes the US$100,000 reduction using an advanced-technology or "50 direct employees" test. The amended Foreign Investments Act uses a majority-Filipino, no-fewer-than-15 direct-employee test for domestic-market enterprises. Which test applies to branches: confirm with counsel.
• One Person Corporations. They suit an individual founder, but the Revised Corporation Code bars some businesses from using them, including banks and quasi-banks, pre-need, trust and insurance companies, and public or listed companies, and a licensed professional can't use one to practice that profession (§116). For other regulated activities, such as lending or financing, whether a One Person Corporation can hold the license isn't stated in published rules: confirm with counsel.

For most founders who plan to earn revenue locally, a domestic corporation is the default choice.

Registration steps, in order

No agency publishes a complete end-to-end timeline, so confirm with counsel for your own case. The published rules do set out the sequence and some legal processing limits.

1. Incorporate with the SEC

The Securities and Exchange Commission (SEC) registers corporations and licenses foreign corporations to do business. Once the SEC officially accepts a complete application, it must act within 7 working days for a domestic corporation, or 20 working days for a foreign corporation's license (FIA Implementing Rules, §19(d)). The clock starts only once your filing is complete. If the SEC doesn't act within that period for reasons not caused by the applicant, the application is deemed approved.

2. Get a sector license, if your business is regulated

Many service and software businesses have no separate sector license path identified in published sources — confirm with counsel for your activity. Retail trade has its own foreign-equity and capital rules, and regulated financial activities need a license (see "A note on regulated activities" below).

3. Register your foreign investment with the central bank (optional)

Registering your investment with the Bangko Sentral ng Pilipinas (BSP) is optional. However, you need it to buy foreign exchange from Philippine banks when you send dividends or repatriate capital (FIA Implementing Rules, §24).

4. Get a barangay clearance and a local business permit

Your city or municipality issues these. Fees and steps vary by locality: confirm with counsel. Under the Ease of Doing Business Act, government processing may not exceed 3 working days for simple transactions, 7 for complex ones, or 20 for highly technical ones, and each limit can be extended once (RA 11032, §9).

5. Register with the tax bureau

The Bureau of Internal Revenue (BIR) handles tax registration. One cost has gone away: the ₱500 annual registration fee is no longer collected, effective January 22, 2024 (BIR RMC 14-2024; BIR NewBizReg).

6. Register with the privacy regulator, if required

The National Privacy Commission (NPC) requires registration from controllers or processors that:

• employ 250 or more people,
• process sensitive personal information of 1,000 or more individuals,
• carry out processing likely to pose a risk to the people whose data is involved, or
• use automated decision-making or profiling, such as credit scoring. This applies whatever your size (NPC Circular 2022-04, §5(A)).

Registration is due within 20 days of the system going live or appointing your first data protection officer (NPC Circular 2022-04, §7). Registration fees aren't stated in the circular: confirm with counsel. The Data Privacy Act can also reach processing done outside the country when it involves data about Philippine citizens or residents and the business has a Philippine link.

7. Register for anti-money-laundering compliance, if you're a covered person

Anti-money-laundering rules apply to "covered persons," which include banks and other businesses supervised by the BSP, SEC, or Insurance Commission, and certain non-financial businesses; the 2021 amendments added real estate developers and brokers (RA 11521, §2). Registration steps for new covered persons: confirm with counsel (AMLC).

Hiring: employer of record or your own payroll

You have two basic routes for building a team in the Philippines.

Employer of record (EOR). A third-party provider with a Philippine entity becomes the legal employer of your staff and runs payroll and employer compliance for a fee. It can let you hire before you incorporate and exit more easily. Two cautions. First, Philippine rules prohibit "labor-only contracting": if the provider doesn't have substantial capital and its workers do your core business, or if the provider doesn't actually control how the work is done, the client can be treated as the direct employer and share liability for unpaid wages and benefits (Labor Code Arts. 106–109; DOLE Department Order 174-17; DOLE study on DO 174-17). Second, hiring and directing a team in the Philippines without an entity may raise "doing business" questions (FIA Implementing Rules, Rule I §1(j)). How an EOR arrangement fits these rules for a foreign company with no local entity: confirm with counsel.

Your own entity and payroll. Once you incorporate, your company is the employer and handles payroll, withholding, and employer registrations directly. This usually costs less per head at scale and fits long-term plans. It also ties into the capital rules above: for domestic-market companies, undertaking that a majority of your direct employees are Filipino, and no fewer than 15, is one way to qualify for the lower US$100,000 floor. The rules define direct employees as personnel hired and engaged under the control and supervision of the investor or employer (FIA Implementing Rules, Rule I §1(h); Rule XII §39(c)), so staff employed through an EOR may not count. Confirm with counsel.

Employer contributions (as of October 2026). Each month, employers register and pay into three schemes:

• Social Security System (SSS): 15% of the employee's monthly salary credit (₱5,000 to ₱35,000): 10% employer, 5% employee, plus a small employer-only employees' compensation amount (SSS contribution table; SSS Circular 2024-006).
• PhilHealth: 5% of monthly basic salary, with a ₱10,000 floor and ₱100,000 ceiling, split equally between employer and employee (PhilHealth Advisory 2025-0002; PhilHealth Circular 2020-0005, §IV.B.1).
• Pag-IBIG Fund: 2% employer and 2% employee on monthly fund salary up to ₱10,000 (HDMF Circular No. 460).

Contracting rules. A provider acting as a contractor under the DOLE rules must register with the DOLE regional office and have 'substantial capital' of at least ₱5 million paid-up. Registration alone doesn't prove an arrangement is legitimate, and the principal and contractor share liability for workers' wages and benefits (DOLE Department Order 174-17; DOLE study on DO 174-17; Supreme Court). Whether a particular EOR arrangement is treated as contracting: confirm with counsel.

Withholding tax, 13th-month pay, minimum wages, and leave rules also apply. Get local payroll or legal advice before your first hire. Confirm with counsel.

Typical costs and timelines

These are the published figures. Professional fees, rent, and local permit costs come on top and vary widely.

• Capital floor (foreign-owned, domestic-market): US$200,000, or US$100,000 if you qualify (see above).
• Other vehicles: see the table above.
• SEC decision: 7 working days (domestic corporation) or 20 working days (foreign corporation license), counted from acceptance of a complete application.
• Local permits: legal processing limits of 3, 7, or 20 working days, depending on complexity.
• BIR annual registration fee: no longer collected since January 22, 2024.
• Employer contributions: SSS, PhilHealth, and Pag-IBIG each month (see Hiring).
• Total time to launch: not published. Confirm with counsel.

A note on regulated activities

If you plan to offer lending, financing, buy-now-pay-later, payments, e-money/e-wallets, remittances, or credit cards, expect a separate license and much higher capital requirements. Lending and financing companies are licensed by the SEC. E-money, remittance, payment operators, and card issuers fall under the BSP. Requirements turn on the details of your model, so confirm with counsel before you incorporate.

Earned wage access has no specific Philippine rule; a provider that advances its own money may be treated as a lender, while an employer paying its own wages early through a software vendor has no license path identified in published sources — confirm with counsel.

FAQ

Do I need a local partner? Not for most businesses. Foreign investors may own up to 100% unless the Negative List or a specific law says otherwise (BOI FAQ).

Can my overseas company set up a One Person Corporation? No. Only an individual, a trust, or an estate can form one, and some businesses, such as banks, insurers, and public companies, can't use one at all (Revised Corporation Code).

What's the cheapest way to establish a presence? A representative office has the lowest published remittance at US$30,000, but it can't earn local income (BOI: Enterprise Types). Hiring through an EOR can delay setting up an entity, but see the cautions under Hiring: confirm with counsel before relying on it.

Do I have to register my investment with the BSP? It's optional, but you'll need it to buy foreign exchange from banks to repatriate profits or capital (FIA Implementing Rules, §24).

How long does the whole process take? No official end-to-end timeline exists. The SEC and local governments have legal processing limits, but your total time depends on document preparation, your locality, and whether you need a sector license. Confirm with counsel.

Not legal advice. This guide is general information drawn from published government sources, as of October 2026. Philippine rules change often. Confirm your plans with qualified Philippine counsel before you act.