Business Registration Options for Foreign Nationals in the Philippines (SEC/DTI Guide)

Philippine legal context, updated through June 2024. This is general information, not legal advice.

Snapshot: how registration works in the Philippines

DTI (Department of Trade & Industry) registers sole proprietorships via the Business Name Registration System (BNRS).
SEC (Securities & Exchange Commission) registers partnerships, corporations (including One Person Corporations), and foreign company offices (branch/representative; RHQ/ROHQ).
BIR (Bureau of Internal Revenue) issues tax registration (TIN, Certificate of Registration) and authorizes invoices/receipts.
LGUs (Local Government Units) issue Mayor’s/Business Permits, barangay clearances, sanitary/fire permits, etc.
Other regulators (BOI/PEZA/IPA, DTI–Fair Trade, NPC, DOLE, BI, BSP, sectoral agencies) may be involved depending on industry, incentives, data/privacy, labor, immigration, or finance.

Before choosing a vehicle, foreign nationals must check: (1) foreign ownership limits, (2) minimum capital rules, and (3) visa/work authorization.

1) What foreign investors can own: the high-level rules

Philippine Constitution & special laws reserve certain activities to Filipino citizens or impose equity caps (e.g., exploitation of natural resources, ownership of land, mass media, some education, cooperatives, private security, and others).
The Foreign Investments Act (FIA) and the current Foreign Investment Negative List (FINL) enumerate activities with 0% foreign ownership, ≤40% foreign ownership, or other limits/caveats.
Key liberalizations:
- Public Service Act (as amended): most “public services” (e.g., telecommunications) are no longer “public utilities”, so the constitutional 40% cap doesn’t apply to them; however, a narrow set of “public utilities” remains capped.
- Retail Trade Liberalization (amended): substantially lower capitalization thresholds for foreign retailers.
Anti-Dummy Law: it is illegal to use “dummies” or side arrangements to evade nationality caps. Authorities may apply the “grandfather rule” to look through corporate layers to verify true Filipino/foreign ownership and control.

Practical rule of thumb

If your activity is freely open, you may go 100% foreign-owned.

If your activity is partially nationalized (e.g., 40% foreign cap), you must structure with a 60% Filipino / 40% foreign equity split and comply with control restrictions.

If your activity is fully nationalized, foreign equity is not allowed (or only allowed in tightly defined exceptions).

Always check the latest FINL/sectoral rules for your exact activity.

2) Your menu of business vehicles (who registers with whom)

Vehicle	Who can own	Typical use cases	Registered with
Sole Proprietorship	A single natural person (can be a foreign national with valid immigration status)	Freelancers/consultants, tiny retail/services	DTI (Business Name)
General/Limited Partnership	2+ partners; foreigners allowed subject to caps	Joint ventures without a corporation, investment funds	SEC
Stock Corporation	2–15 incorporators (can be entities); foreigners may own up to 100% if allowed	Most SMEs to large companies	SEC
One Person Corporation (OPC)	Single stockholder (natural person, trust, or estate); foreigners allowed if sector permits	Solo owners wanting limited liability	SEC
Branch Office of a Foreign Corporation	100% foreign (extension of parent)	Operating in open sectors; no local shareholders	SEC
Representative Office	100% foreign; no income in PH	Marketing liaison, quality control, parent support only	SEC
Regional/Area Headquarters (RHQ) & Regional Operating Headquarters (ROHQ)	100% foreign; group-level hubs	Coordination centers (RHQ), limited income-generating ops (ROHQ)	SEC

Corporation vs Branch

Corporation is a Philippine resident company (separate legal entity); eligible for incentives; easier for regulated sectors with equity caps.

Branch is not a separate entity; it’s the foreign corporation itself doing business in PH. It cannot operate in sectors requiring Filipino ownership.

3) Minimum capital: what foreigners need to budget

A. FIA domestic-market rule (applies when selling mainly to the Philippine market)

If >40% foreign-owned and domestic-market enterprise: USD 200,000 paid-in capital required.
This may drop to USD 100,000 if the enterprise either (i) employs at least 15 Filipino employees or (ii) uses advanced technology as recognized by Philippine authorities.
Certain startups/startup enablers may also qualify for USD 100,000 minimum under specific guidelines.

B. Export enterprises (≥60% revenue from exports/outside PH)

Generally no FIA minimum; standard corporate law no longer imposes a blanket minimum paid-in capital. Some SEC practice and incentive regimes (PEZA/BOI) impose project-specific capital.

C. Foreign retailers (Retail Trade Liberalization, as amended)

Minimum paid-in capital (across the enterprise): PHP 25 million.
Per-store investment: PHP 10 million (includes inventory/fixtures/leasehold improvements; detailed rules apply).
Additional operational and compliance conditions apply.

D. Foreign company offices (SEC practice)

Branch Office (domestic-market): USD 200,000 initial inward remittance (possible reduction to USD 100,000 with advanced tech or ≥15 Filipino employees).
Export-oriented Branch (≥60% exports): USD 5,000 initial remittance.
Representative Office: USD 30,000 annual operating fund remittance (no income in PH).
RHQ: historically USD 50,000 annual fund; ROHQ: USD 200,000 capitalization (note: incentive/tax regimes for RHQ/ROHQ have evolved—confirm current treatment if considering these models).

4) Choosing the right vehicle: a quick decision guide

I want to sell locally (e.g., café, gym, clinic) and go 100% foreign → likely need USD 200k paid-in (or USD 100k if advanced tech or ≥15 Filipino employees). Otherwise, consider a 60/40 joint venture in a sector with a foreign cap.
I export services/products (BPO, software dev for offshore clients) → 100% foreign-owned corporation or branch often possible with no FIA minimum; incentives may be available.
I only need a local presence for marketing/liaison → Representative Office (no PH revenue).
I’m a solo owner in an open sector → OPC is a clean, limited-liability option (mind the nationality/capital rules that still apply).
My sector has a 40% cap → Use a corporation with 60% Filipino equity, comply with Anti-Dummy restrictions, and be prepared for grandfathering review.

5) DTI route: Sole proprietorship (for individuals)

What it is A business owned by a single person. Liability is personal/unlimited. Registration with DTI gives a Business Name (BN)—it is not a license to operate.

Foreign national considerations

Must have a valid immigration status (e.g., appropriate visa/ACR I-Card) and a local address.
Some activities are off-limits or capped via FINL/special laws.
If the activity is a domestic-market enterprise and >40% foreign-owned (which, as a sole proprietorship, it is), the USD 200,000 (or reduced) FIA threshold conceptually applies; in practice, most foreign proprietors choose a corporation instead for limited liability and capital compliance.

Process (high level)

Check BN availability & territorial scope (barangay/city/region/national).
File via BNRS; pay fees; BN valid for 5 years.
Secure Barangay Clearance & Mayor’s/Business Permit.
Register with BIR (get TIN/Certificate of Registration, register books/receipts).
Register as employer with SSS/PhilHealth/Pag-IBIG if you will hire.

6) SEC routes: Corporations, partnerships, and foreign offices

A) Stock Corporation (including OPC)

Ownership: up to 100% foreign if sector is open; observe caps otherwise.
Board/Officers (RCC rules):
- Standard corp: 2–15 directors; directors must hold at least one share.
- OPC: single stockholder (the “sole director”).
- Corporate Secretary must be a Filipino citizen and resident.
- Treasurer must be a resident (the OPC sole stockholder may act as treasurer subject to a bond).
- President may be of any nationality unless a special law says otherwise.
Capital: no general minimum under the Revised Corporation Code (RCC), but FIA/sector-specific minimums still apply.
Documents: name reservation, Articles of Incorporation (and By-laws for standard corps), treasurer’s affidavit/undertakings, proof of inward remittance for foreign capital, IDs/consents, apostilled/consularized foreign documents.
Post-SEC: BIR, LGU permits, SSS/PhilHealth/Pag-IBIG, and any sectoral licenses.

B) Partnerships

General or Limited partnerships.
Tax: Most partnerships (other than General Professional Partnerships) are taxed like corporations.
Profession-based partnerships can be nationality-restricted; foreign professionals generally need reciprocity and PRC permits.

C) Branch Office of a Foreign Corporation

Not a separate legal entity; parent remains liable.
Capital: see Section 3(D).
Limits: cannot engage in nationalized/partially nationalized activities where the structure itself (100% foreign) would breach caps.
Requirements: parent’s Board resolution to establish branch, appointment & acceptance of Resident Agent, authenticated parent AFS and constitution, proof of inward remittance.

D) Representative Office

No revenue in PH; expenses fully funded by parent via inward remittances.
Capital/funding: typically USD 30,000 per year.
Uses: market research, liaison, quality control, promotion for the parent.

E) RHQ/ROHQ

Group-level hubs. The specific tax/incentive frameworks have changed over time (TRAIN/CREATE). If considering this, obtain current tax guidance.

7) Step-by-step registration (SEC route)

Name check/reservation on SEC’s online system.
Draft Articles (plus By-laws for standard corps). For OPC, designate nominee/alternate nominee.
Identify officers (Corp Sec, Treasurer, President) and directors (or sole director for OPC); ensure residency/citizenship rules.
Open bank for Treasurer-in-Trust deposit (if applicable) and prepare proof of foreign remittance.
Authenticate foreign documents (Apostille/consularization).
File online, pay fees, receive SEC Certificate of Incorporation (or License for branch/rep).
Register with BIR: TIN, Certificate of Registration, books, invoices/receipts, official receipts/sales invoices or POS/CAS permit, choose VAT/Non-VAT.
LGU permits: Barangay, Mayor’s/Business Permit, fire and sanitary permits.
Employer registrations: SSS, PhilHealth, Pag-IBIG.
Labor/immigration: DOLE AEP (Alien Employment Permit) for foreign employees; BI visas (e.g., 9(g) employment visa, or other special visas).

8) Taxes—what to expect (headline items)

Corporate Income Tax (CREATE):
- 25% on net taxable income for domestic corporations and resident foreign corporations (e.g., branches).
- 20% for qualified small corporations (assets/income thresholds apply).
Branch Profits Remittance Tax: 15% on profits remitted by a branch to its head office (treaty relief possible).
VAT: 12% standard; VAT-exempt threshold at PHP 3,000,000 annual gross sales/receipts. Zero-rating rules apply to exports and certain incentive-registered purchases.
Withholding taxes on cross-border payments (dividends, interest, royalties, services) may be reduced by tax treaties—treaty relief procedures apply.
Local Business Taxes and Real Property Taxes (on improvements/leasehold) from LGUs.

Tax rules are technical and change over time—obtain current, deal-specific tax advice.

9) Incentives & special locations

CREATE Act shifted incentives to Registered Business Enterprises (RBEs) with the BOI or Investment Promotion Agencies (e.g., PEZA, freeport zones).
Possible incentives: Income Tax Holiday, Special Corporate Income Tax (in lieu of most national and local taxes) or enhanced deductions, VAT zero-rating on local purchases, and duty exemptions on capital equipment—subject to activity/footprint and time limits.
Export enterprises, domestic market enterprises in priority sectors, and advanced manufacturing/tech often qualify.

10) Land, office space, and condominiums

Land ownership is generally not allowed for foreigners (or foreign-owned corporations).
Long-term land lease is allowed (typically up to 50 years, renewable for 25).
Foreigners may own condominium units if foreign ownership in the condo corporation does not exceed 40%.
Office registration requires a Philippine principal office address (virtual offices are often not acceptable for permits/banking).

11) Labor & immigration essentials

Employment of foreigners: needs a DOLE Alien Employment Permit (AEP) unless exempted.
Work visas: most common is 9(g) (pre-arranged employment). Some investors/managers may use special visas, e.g., SIRV (Special Investor’s Resident Visa), SVEG (Special Visa for Employment Generation), or SRRV (retirees).
Mandatory benefits: SSS, PhilHealth, Pag-IBIG; 13th-month pay; minimum wage (regional boards); leave benefits and occupational safety rules.
DOLE reporting: submit the Rule 1020 report for establishments.

12) Compliance calendar (high level)

SEC:
- General Information Sheet (GIS) annually (within 30 days from annual meeting; for OPC, within 30 days from anniversary).
- Audited Financial Statements (AFS): filing deadlines set annually (commonly around 120 days from fiscal year-end, subject to SEC announcements).
BIR:
- Monthly/quarterly VAT or percentage taxes; quarterly income tax; Annual ITR (calendar-year corporates file around April 15); withholding tax returns; books/invoice compliance.
LGU:
- Business permit renewal each January, with related clearances.
SSS/PhilHealth/Pag-IBIG: monthly contributions and reports.
NPC (data privacy): register if required, file breach notifications when applicable.

13) Real-world scenarios (illustrative)

Offshore software/BPO serving foreign clients
- 100% foreign-owned corporation (or branch) is common.
- No FIA minimum capital; consider PEZA or other IPA incentives; VAT zero-rating may be available for qualified transactions.
Foreign-owned neighborhood café (domestic-market)
- If 100% foreign: expect USD 200,000 paid-in (possible USD 100,000 if ≥15 Filipino employees or advanced tech).
- Alternative: 60/40 JV corporation (Filipino-majority) if you can cede actual control consistent with Anti-Dummy rules.
Retail chain
- Comply with PHP 25M overall paid-in capital and PHP 10M per store investment; structure as a corporation; expect additional consumer/trade compliance.
Hardware distributor in a sector with a 40% cap
- Use a corporation with 60% Filipino equity; ensure board/control rules and beneficial ownership comply; be ready for grandfathering review.

14) Common pitfalls (and how to avoid them)

Ignoring nationality caps → Validate your exact activity against FINL and sectoral laws before you incorporate.
Assuming nominees are fine → Anti-Dummy Law penalties are severe; use real Filipino ownership/control where required.
Under-capitalizing → FIA and SEC practice on paid-in/inward remittance are enforced during registration and banking/KYC.
Using the wrong vehicle → Representative Offices cannot earn income; Branches can’t operate in capped sectors; Sole proprietorships expose you to unlimited liability.
Post-registration gaps → Skipping BIR/LGU/SSS-PhilHealth-Pag-IBIG registrations or late filings cause penalties and bank account issues.
Visa/work permit timing → Align AEP and 9(g) processing with your hiring and opening plans.
Data/privacy & consumer rules → Many service businesses (e.g., BPO, e-commerce) must comply with NPC and DTI consumer standards.
Leases & addresses → Some RDOs/LGUs won’t process without a compliant physical address and occupancy permits.

15) Minimal checklists

Corporation / OPC (SEC)

✅ Name reservation
✅ Articles (By-laws for standard corps)
✅ Directors/officers; Corp Sec (Filipino/resident); Treasurer (resident)
✅ Proof of inward remittance / bank certificate (as applicable)
✅ Apostilled foreign docs
✅ SEC Certificate → then BIR, LGU, SSS/PhilHealth/Pag-IBIG, DOLE, BI

Branch / Representative Office (SEC)

✅ Parent Board resolution & constitutive docs (apostilled)
✅ Resident Agent appointment & acceptance
✅ Inward remittance (USD thresholds)
✅ SEC License → then BIR, LGU, etc.

Sole Proprietorship (DTI)

✅ BN application (with valid visa/ACR & local address)
✅ Barangay & Mayor’s permits
✅ BIR registration; official receipts
✅ SSS/PhilHealth/Pag-IBIG if employing staff

16) Quick FAQs

Can a foreigner own 100% of a Philippine company? Yes—if the activity is open (no foreign cap) and you satisfy capital rules (e.g., FIA for domestic market enterprises).
Do I need a Filipino partner? Only if your sector is partially or fully nationalized (e.g., capped at 40% foreign).
Is USD 200,000 always required? No. It’s the FIA minimum for domestic-market enterprises with >40% foreign ownership. Export enterprises typically are not subject to it; startups/advanced tech/≥15 Filipino employees may qualify for USD 100,000.
What if I only do marketing and support? A Representative Office may fit—but it cannot earn Philippine income.
Can my branch operate retail or land-owning activities? Not if those activities are capped or reserved to Filipinos; a branch is 100% foreign by nature.

17) Final notes & next steps

Map your exact activity against FINL and special laws.
Choose a vehicle (SEC or DTI) that fits ownership, liability, and tax goals.
Budget for capital (FIA/retail/branch/rep), permits, and immigration.
If seeking incentives, engage with BOI/PEZA early and align your export ratio, location, and headcount with the program.

If you want, tell me your intended business activity, target market (domestic vs. export), headcount plans, and preferred location—I can draft a tailored structure, capital plan, and step-by-step registration timeline.