Starting a foundation in the Philippines involves more than registering a charitable name. A Philippine foundation is normally organized as a non-stock, non-profit corporation with the Securities and Exchange Commission (SEC), funded with at least ₱1 million, and operated exclusively for legitimate charitable, educational, religious, cultural, scientific, social-welfare, or similar purposes. After incorporation, it must still complete tax registration, obtain any necessary fundraising or sector-specific permits, and comply with annual SEC and Bureau of Internal Revenue (BIR) requirements.

What Is a Foundation Under Philippine Law?

A foundation is a non-stock, non-profit corporation created primarily to:

Give grants, scholarships, endowments, or financial assistance;
Raise and manage funds for charitable programs;
Operate educational, cultural, scientific, religious, athletic, or social-welfare projects; or
Support other organizations or communities pursuing similar public-benefit purposes.

Unlike a stock corporation, a foundation has no shareholders and no shares of stock. Its income and assets cannot be distributed as dividends to founders, members, trustees, or officers.

A foundation may pay reasonable salaries for genuine work, reimburse legitimate expenses, and purchase necessary goods and services. However, its funds must not be used to enrich insiders or cover the personal expenses of founders and trustees.

The primary legal framework includes:

The Revised Corporation Code of the Philippines, Republic Act No. 11232;
SEC Memorandum Circular No. 8, Series of 2006, or the Revised Guidelines on Foundations;
SEC Memorandum Circular No. 25, Series of 2019, covering non-profit organization governance and disclosure;
Section 30 of the National Internal Revenue Code, as amended; and
Presidential Decree No. 1564 and DSWD regulations governing public solicitation.

Under the Revised Corporation Code, non-stock corporations may be formed for charitable, religious, educational, professional, cultural, scientific, social, civic, and similar purposes. Their property and affairs are managed by a board of trustees rather than a board of directors.

Foundation Versus an Ordinary Non-Profit Corporation

Not every non-profit organization needs to be registered as a foundation.

Structure	Main characteristics	Best suited for
Foundation	Must use “Foundation” in its name, maintain an initial fund of at least ₱1 million, accept SEC audit access, and make foundation-specific annual disclosures	Grant-making organizations, scholarship funds, institutional charities, and organizations managing a permanent or substantial charitable fund
Ordinary non-stock, non-profit corporation	No shares or dividends; generally no special ₱1-million foundation requirement	Associations, advocacy groups, clubs, professional organizations, community organizations, and member-based NGOs
Stock corporation or social enterprise	May have shareholders and distribute profits, subject to its governing documents	Businesses that pursue a social purpose while earning profits for owners
Foreign non-stock branch	Philippine extension of an existing foreign organization	Foreign organizations that need a Philippine presence but do not necessarily require local Section 30 tax-exempt status

The ₱1-million requirement is not an SEC filing fee. It is the foundation’s initial contribution or endowment. Once contributed, the money belongs to the foundation and must be used for its lawful purposes. It is not “show money” that founders may withdraw after registration.

SEC rules require a foundation to submit a notarized bank certification showing a deposit of at least ₱1 million, include “Foundation” in its corporate name, consent to SEC examination of its records, and provide additional program and fund-use information with its annual financial statements.

What to Decide Before Registering the Foundation

Before preparing SEC documents, the founders should agree on several basic matters.

The foundation’s exact purpose

Avoid a purpose clause that simply says the foundation will “help the poor” or “undertake charitable activities.” The articles of incorporation should identify:

The intended beneficiaries;
The types of programs to be conducted;
Whether the organization will make grants or directly operate projects;
The geographic area of operation;
How funds will be raised and used; and
Whether regulated activities, such as running a school or residential care facility, are contemplated.

For example, a scholarship foundation may state that it will provide tuition, books, allowances, mentoring, and educational support to financially disadvantaged students in selected Philippine communities.

A clear purpose clause makes SEC review easier and is also important when the foundation later applies for tax exemption.

The operating model

A foundation can operate in different ways:

Grant-making foundation: Gives grants to qualified schools, NGOs, communities, or individuals.
Operating foundation: Directly runs feeding, education, health, livelihood, or relief programs.
Corporate foundation: Receives support from a business group but remains a legally separate non-stock corporation.
Family foundation: Established using family wealth for long-term philanthropic work.
Fundraising foundation: Regularly solicits donations from the public to support particular causes.

The operating model affects the foundation’s staffing, accounting system, solicitation permits, tax treatment, and regulatory exposure.

The founders, members, and trustees

These roles are related but not identical:

Incorporators sign the articles of incorporation and organize the corporation.
Members have the rights given to them by the articles and bylaws, including voting rights where applicable.
Trustees govern the foundation and control its property.
Officers handle designated management functions, such as president, treasurer, and corporate secretary.

The SEC’s current regular domestic registration workflow generally accommodates two to 15 incorporators. The One Person Corporation form is intended for stock corporations and should not be treated as a one-person foundation route.

For sound governance, many foundations use a board of five to seven trustees even when a different number may legally be adopted. An odd number reduces the risk of tied votes, while a sufficiently diverse board improves financial oversight and continuity.

The officers

Under the Revised Corporation Code:

The president must be a trustee;
The treasurer must be a Philippine resident; and
The corporate secretary must be both a Filipino citizen and a Philippine resident.

One person generally should not simultaneously serve as president and secretary or as president and treasurer. The articles or bylaws may impose additional qualifications.

How to Start a Foundation in the Philippines

1. Choose and verify the corporate name

Prepare several possible names. The name must:

Contain the word “Foundation”;
Be distinguishable from existing SEC-registered names;
Avoid misleading words;
Avoid implying government affiliation without authority; and
Avoid restricted professional, banking, insurance, educational, or religious terms unless supported by the required endorsement.

Name verification is performed through the SEC Electronic Simplified Processing of Application for Registration of Company, or eSPARC.

A name reservation does not grant ownership of a trademark. If the foundation will use a distinctive logo or brand, separate trademark registration with the Intellectual Property Office of the Philippines may be appropriate.

2. Draft the articles of incorporation

The articles of incorporation ordinarily identify:

The foundation’s corporate name;
Its primary and secondary purposes;
Its principal office in the Philippines;
Its corporate term;
The names, nationalities, and addresses of the incorporators;
The number and names of the initial trustees;
Its members, where required by the SEC form;
The amount and sources of its initial contributions; and
The name of the treasurer-in-trust.

The purpose clause should be consistent with a non-stock, non-profit organization. It should not authorize the distribution of profits or assets to members.

The articles should also contain an appropriate dissolution clause. After paying lawful debts and honoring restrictions attached to donated property, the remaining assets should go to another qualified non-profit organization or to the Philippine government for a public purpose—not to the founders or their families.

3. Prepare the bylaws

The bylaws are the foundation’s internal operating rules. They should address:

Qualifications, admission, suspension, and termination of members;
Member meetings and voting rights;
Trustee qualifications, terms, elections, vacancies, and removal;
Regular and special board meetings;
Quorum and voting rules;
Officer duties and terms;
Financial controls and authorized signatories;
Conflict-of-interest procedures;
Recordkeeping and access to corporate records;
Committees;
Amendments; and
Dissolution procedures.

Practical bylaws should anticipate real problems. For example, they should explain what happens when a trustee repeatedly misses meetings, has a financial interest in a supplier, leaves the Philippines permanently, or becomes unable to serve.

4. Deposit at least ₱1 million

The founders must arrange the initial contribution and obtain a notarized bank certification showing a deposit of at least ₱1 million.

Bank procedures differ. Some banks will open an account in the name of the proposed foundation, while others may use a temporary treasurer-in-trust arrangement until the SEC certificate is issued. The bank may request:

Draft articles of incorporation;
Name reservation;
Identification documents;
Tax identification numbers, if available;
A board or incorporator resolution;
Proof of the source of funds; and
Information about the foundation’s expected donors and activities.

The founders should confirm the bank’s documentation and account-naming requirements before transferring funds.

The money should remain traceable. Large cash deposits, unexplained transfers, or funds routed through personal accounts may trigger bank compliance questions and create future accounting problems.

5. Prepare the foundation-specific SEC requirements

In addition to the standard incorporation documents, prepare:

A notarized bank certification showing the required deposit;
A written undertaking allowing the SEC to examine or audit the foundation’s books and records;
The contribution schedule identifying contributors and amounts;
Valid identification documents of the incorporators and officers;
Proof of the principal office address, when requested;
Acceptance or consent documents required by the SEC-generated forms; and
Apostilled or authenticated foreign documents, when applicable.

It is also practical to prepare a one- to three-year program and financial plan. Even when it is not listed as a standard attachment at the initial portal stage, substantially similar information may later be requested by the SEC, BIR, DSWD, banks, donors, or accreditation bodies.

6. File through SEC eSPARC regular processing

A foundation should generally use the regular processing or SEC ZERO route, not OneSEC, because OneSEC is designed for qualifying domestic stock corporations.

The usual online process is:

Create and verify the required SEC user accounts.
Select domestic non-stock corporation registration.
Enter the proposed corporate name and purposes.
Encode incorporator, trustee, officer, and contribution details.
Upload the required supporting documents.
Review the system-generated articles, bylaws, and forms.
Complete the required electronic signing or notarization process.
Pay the SEC-assessed registration, legal research, and related fees.
Respond promptly to any examiner comments.
Download or receive the certificate of incorporation and approved documents.

SEC ZERO allows qualifying applications to be processed electronically, including document signing and submission. The portal’s current prompts and documentary checklist should always control because technical procedures and forms may change.

7. Hold the organizational meeting

After incorporation, the initial trustees should hold an organizational meeting to:

Elect the officers;
Accept the initial contributions;
Confirm the foundation’s bank arrangements;
Approve bank signatories;
Adopt the initial budget;
Set the fiscal year;
Approve initial programs;
Appoint an external accountant or auditor;
Establish reimbursement and procurement rules;
Adopt a conflict-of-interest policy;
Approve the registration of books and tax records; and
Authorize applications with the BIR, local government, DSWD, and other agencies.

Minutes and board resolutions should be properly prepared and kept in the foundation’s corporate records.

8. Complete BIR registration

SEC incorporation creates the legal entity, but it does not complete the foundation’s tax registration.

The foundation should secure or complete:

Its tax identification number;
BIR Certificate of Registration;
Registered books of accounts;
Authority or registration for invoices and other required accounting documents;
Applicable withholding-tax registrations; and
Employee-related tax registrations, if it will hire personnel.

Registration may be integrated partly through the Philippine Business Hub, but the foundation should confirm that its BIR records, tax types, books, and invoicing arrangements are complete before commencing regular operations.

A non-profit foundation may still be required to:

Withhold tax from employee compensation;
Withhold tax from certain payments to professionals, landlords, and suppliers;
Pay taxes on taxable business or property income;
File required information returns; and
Comply with VAT or percentage-tax rules when it conducts taxable transactions.

9. Apply for a BIR Certificate of Tax Exemption

SEC registration does not automatically make a foundation tax-exempt.

A foundation seeking exemption under Section 30 of the National Internal Revenue Code must separately apply with the BIR and satisfy two tests:

Organizational test: Its articles and bylaws must limit it to qualifying non-profit purposes and prohibit private distribution of income or assets.
Operational test: Its actual activities, spending, compensation, and transactions must genuinely advance those purposes.

The BIR application commonly includes:

A formal application letter identifying the applicable Section 30 provision;
Certified SEC certificate, articles, and bylaws;
A sworn description of actual or planned activities;
Information on sources and uses of funds;
Details of officers, trustees, and compensation;
Financial statements and tax returns, if already operating;
Program documents; and
Other records requested during evaluation.

The BIR’s guidelines under Revenue Memorandum Order No. 38-2019 provide the principal framework for evaluating Section 30 applications.

A Certificate of Tax Exemption for an ordinary Section 30 organization is generally valid for three years unless earlier revoked or cancelled. Renewal or revalidation should be addressed before expiration.

10. Consider donee-institution accreditation

Income-tax exemption and donee-institution status are separate matters.

A tax-exempt foundation is not automatically qualified to issue donation certificates that give every donor a full tax deduction or donor’s-tax exemption. Donors may require the foundation to obtain accreditation through the Philippine Council for NGO Certification and the BIR.

The accreditation framework is recognized under Executive Order No. 720.

This distinction is important for corporate donors. Before promising that a donation is “fully tax-deductible,” the foundation should verify:

Its current BIR status;
Whether it has the necessary donee-institution accreditation;
The type and amount of the donation;
The donor’s documentation; and
Any statutory limits or conditions.

11. Obtain a DSWD solicitation permit before public fundraising

A foundation that asks the general public for money or property for charitable or public-welfare purposes will generally need a solicitation permit under Presidential Decree No. 1564 and DSWD regulations.

This may cover fundraising through:

Facebook, Instagram, TikTok, or other social media;
GCash, Maya, bank-transfer, or QR-code campaigns;
Donation boxes;
Concerts, fun runs, raffles, or benefit events;
House-to-house or street solicitation;
Online crowdfunding platforms;
Public appeals for disaster victims; and
Corporate or community donation drives open to the public.

Applications are now handled through the DSWD Harmonized Electronic License and Permit System. Requirements may include the SEC certificate, articles and bylaws, General Information Sheet, project proposal, board resolution, fundraising mechanics, target amount, beneficiary information, and proof that the organization has no derogatory SEC record.

A regular permit may be valid for up to one year, while a temporary permit may cover a shorter campaign. DSWD’s published processing target for a complete application under its electronic system is generally seven working days for a regular permit and three working days for a temporary permit, although deficiencies or verification issues may extend processing. See the DSWD Public Solicitation FAQ.

12. Secure sector-specific licenses

Separate approval may be necessary when the foundation will operate a regulated program.

Examples include:

Planned activity	Possible regulator
School, learning center, or scholarship program connected with formal education	DepEd, CHED, or TESDA
Residential child-care, adoption, rehabilitation, or social-welfare facility	DSWD or the National Authority for Child Care
Hospital, clinic, laboratory, or health facility	Department of Health
Housing or community development project	DHSUD or the relevant local government
Environmental or protected-area activity	DENR
Microfinance, lending, insurance, or investment activity	SEC, Bangko Sentral ng Pilipinas, Insurance Commission, or other financial regulator
Local office, employees, events, or physical operations	Barangay and city or municipal government

SEC incorporation does not replace the license required to operate a regulated facility.

Documents Commonly Needed

Document	Why it is needed
Proposed corporate names	SEC name verification
Articles of incorporation	Establishes the foundation’s legal identity, purposes, office, governance, and contributions
Bylaws	Sets internal membership, trustee, officer, meeting, and financial rules
Incorporators’ and officers’ IDs	Identity and compliance verification
Tax identification details	SEC, BIR, and banking requirements
Notarized bank certification for at least ₱1 million	Foundation-specific SEC requirement
Contribution schedule	Shows who provided the initial fund and how much
Undertaking allowing SEC audit	Foundation-specific compliance requirement
Proof of principal office	Confirms the Philippine business address
Apostilled or authenticated foreign documents	Required when corporate or individual documents are executed abroad
Program and financial plan	Supports SEC, BIR, bank, DSWD, and donor review
Board resolutions	Authorizes officers, bank accounts, registrations, contracts, and programs
Accounting policies and books	Supports financial reporting, audits, and tax compliance

The SEC may request additional documents depending on the foundation’s name, purpose, incorporators, foreign participation, regulated activities, or source of funds.

How Long Does It Take?

A clean, uncomplicated application may follow this practical timetable:

Stage	Common working estimate
Planning, name selection, document drafting, and bank arrangements	1–3 weeks
SEC review and incorporation	Around 1–3 weeks after a complete filing
Organizational meeting, bank activation, and initial registrations	1–3 weeks
BIR registration and accounting setup	Around 2–6 weeks, depending on the RDO and document readiness
BIR tax-exemption application	Often several months
PCNC or donee accreditation	Several months, depending on readiness and review cycle
DSWD public solicitation permit	Published target of 3 or 7 working days for a complete application, depending on permit type

Applications take longer when:

The name resembles an existing corporation;
The purpose clause is too broad or unclear;
Trustees or incorporators have inconsistent information;
Foreign documents are not properly apostilled;
The bank certification does not match the SEC documents;
The organization proposes a regulated activity;
The SEC issues compliance comments; or
The foundation cannot explain its source of funds or operating plan.

SEC filing charges are usually modest compared with the required ₱1-million fund. The founders should also budget for notarization, apostilles, certified copies, accounting systems, audit fees, local permits, and professional assistance.

Special Rules for Foreign Founders and Foreign Foundations

Foreigners may participate in a Philippine foundation when the proposed purpose is not subject to a nationality restriction. However, several practical rules must be considered.

Local officer requirements still apply

A foreign founder cannot eliminate the statutory requirements that:

The corporate secretary must be a Filipino citizen and Philippine resident; and
The treasurer must be a Philippine resident.

The foundation must also maintain a principal office in the Philippines.

Documents signed abroad may need an apostille

Documents executed in a country that is a party to the Apostille Convention will generally require an apostille from that country’s competent authority. Documents from a non-member country may require authentication through the appropriate Philippine diplomatic or consular post.

Documents not written in English should be accompanied by a proper English translation.

A foreign branch may not receive the same tax treatment

An existing foreign charity may register a foreign non-stock branch in the Philippines. However, BIR Revenue Memorandum Order No. 20-2013 states that a Philippine branch of a foreign non-stock, non-profit corporation does not qualify for exemption under Section 30 in the same way as a domestic organization.

For foreign charities seeking Philippine Section 30 status, forming a separate domestic non-stock corporation may therefore be more suitable than relying only on a branch office.

Foreign-controlled foundations should be cautious about buying land

Under the 1987 Philippine Constitution, private land may generally be transferred only to Philippine citizens or corporations or associations whose capital is at least 60% Filipino-owned.

Applying nationality rules to a non-stock corporation can involve membership, voting, control, and beneficial-interest issues. A foreign-controlled foundation should not assume that SEC incorporation allows it to purchase Philippine land. Leasing is often the safer arrangement unless the foundation’s nationality has been properly reviewed.

Annual and Continuing Compliance Requirements

Registration is only the beginning. A foundation must maintain regular corporate, financial, tax, and program records.

Compliance item	Usual requirement
General Information Sheet	File through SEC eFAST within 30 calendar days after the actual annual members’ meeting
Audited financial statements	File annually according to the SEC’s current filing calendar
Foundation sworn statement	Attach information on sources and amounts of funds, programs, responsible project officers, and use of funds
Program existence certification	Obtain the appropriate certification from the mayor, barangay, DSWD, DOH, or other authorized office, using the current SEC requirement
Mandatory Disclosure Form information	New non-stock corporations should comply within the period required by SEC MC No. 25, Series of 2019, and provide updates when required
BIR returns and withholding reports	File according to the foundation’s registered tax types
Certificate of Tax Exemption	Monitor validity and apply for renewal or revalidation as necessary
DSWD solicitation reports	Report collections, expenses, donors, beneficiaries, and fund use as required by the permit
Corporate and financial records	Preserve complete records, generally for at least five years or longer when another law requires
Sector-specific licenses	Renew permits for schools, welfare facilities, clinics, and other regulated operations

The General Information Sheet is ordinarily due within 30 calendar days after the actual annual meeting. SEC filings are made through the Electronic Filing and Submission Tool, or eFAST.

SEC non-profit organization guidelines also expect boards to supervise finances, investigate donors and partners when appropriate, monitor programs, maintain reliable records, and prevent the misuse of the organization for unlawful purposes.

Common Mistakes When Forming a Foundation

Treating the ₱1 million as temporary show money

The initial contribution is foundation property. Returning it to the founders without a legitimate foundation purpose can create corporate, tax, audit, and possible criminal issues.

Assuming that “non-profit” means no taxes

A foundation may be exempt on income directly connected with its qualifying purposes but taxable on other income.

For example, rental income, investment income, commercial sales, or unrelated business activities may be taxable even when the resulting money is later spent on charity. Interest income may also remain subject to final withholding tax.

The Supreme Court has repeatedly emphasized that a non-stock, non-profit label alone does not create blanket tax immunity. Actual organization and operations control the tax result.

Starting public fundraising without a permit

Posting a GCash number and asking the public for donations can be a regulated solicitation activity. Registration with the SEC or BIR does not replace a DSWD solicitation permit.

Mixing personal and foundation funds

All contributions should be deposited in a foundation-controlled bank account and recorded in official books. Trustees and officers should not use personal e-wallets or bank accounts for continuing foundation collections unless a properly documented temporary arrangement is unavoidable and legally permitted.

Paying excessive compensation to insiders

A founder may work for the foundation and receive reasonable compensation for real services. The risk arises when compensation is excessive, unsupported, unrelated to actual work, or designed to transfer charitable funds to insiders.

The board should document:

The position and duties;
The basis for compensation;
Comparable market rates;
The approval process;
Conflict-of-interest abstentions; and
Actual work performed.

Using related suppliers without controls

Transactions with a trustee, founder, officer, relative, or related company should be disclosed, independently reviewed, reasonably priced, and approved without the interested person participating in the decision.

Ignoring donor restrictions

A donation given specifically for scholarships, disaster relief, or medical assistance cannot simply be redirected to office renovation or another program. Restricted funds should be separately tracked.

Promising tax deductions without proper accreditation

A donor may ask for a tax-exemption certificate, donee-institution accreditation, official invoice, donation agreement, or certificate of donation. The foundation should not promise tax benefits that it is not yet qualified to provide.

Frequently Asked Questions

How much money is required to start a foundation in the Philippines?

A foundation must generally have an initial fund of at least ₱1 million, supported by a notarized bank certification. This is the foundation’s money, not an SEC fee.

Can one person start a foundation?

A founder should not rely on the One Person Corporation structure because that form is for stock corporations. The current regular eSPARC route for a domestic non-stock corporation generally calls for at least two incorporators, with a maximum of 15.

A single principal donor may provide most or all of the initial fund, but the organization should still have a functioning membership and governance structure consistent with SEC requirements.

Can foreigners establish a Philippine foundation?

Yes, in many cases. Foreign participation is generally possible when the foundation’s activity is not subject to a nationality restriction. The foundation must still comply with Philippine officer, residence, documentation, and land-ownership rules.

Can a foundation earn money?

Yes. A foundation may receive donations, grants, program fees, investment returns, rental income, or other revenue permitted by its articles.

However:

It cannot distribute profits to members or founders;
Revenue must support lawful foundation purposes;
Commercial or property income may be taxable;
Fundraising may require a DSWD permit; and
Regulated business activities may require additional licenses.

Is a foundation automatically tax-exempt after SEC registration?

No. It must separately apply to the BIR for a Certificate of Tax Exemption and prove that both its governing documents and actual operations satisfy Section 30 of the Tax Code.

Can the founder receive a salary?

A founder may receive reasonable compensation for genuine services as an employee or officer. The payment should be properly authorized, documented, subject to withholding tax, and proportionate to the work performed.

Serving as a trustee does not by itself justify a salary. Payments to trustees and related persons receive heightened scrutiny because of the prohibition against private inurement.

Do we need a DSWD permit for Facebook or GCash fundraising?

Generally, yes, when the organization solicits donations from the public for charitable or public-welfare purposes. Online fundraising is not exempt merely because it takes place through social media, bank transfer, or an e-wallet.

Can the foundation buy land?

It may buy private land only if it satisfies the constitutional nationality requirements. A foundation with substantial foreign membership or control should obtain a careful nationality review before purchasing property. Leasing is usually safer while its eligibility remains uncertain.

What happens to foundation assets if it closes?

The assets do not return to the founders. Debts must first be paid, donor restrictions must be honored, and remaining assets should be transferred to another qualified non-profit organization or to the government for a public purpose, according to the articles, bylaws, and Revised Corporation Code.

How long does it take to establish a foundation?

Basic SEC incorporation and post-registration setup commonly take around one to three months when the documents are complete. A BIR tax-exemption ruling, donee accreditation, foreign-document review, or sector-specific licensing can extend the overall process by several months.

Key Takeaways

A Philippine foundation is normally a non-stock, non-profit corporation registered with the SEC.
Its corporate name must contain “Foundation.”
It must have an initial fund of at least ₱1 million, supported by a notarized bank certification.
The ₱1 million belongs to the foundation and cannot be treated as temporary show money.
SEC registration does not automatically provide tax exemption or donee-institution status.
Public fundraising, including social-media and e-wallet campaigns, may require a DSWD solicitation permit.
Foreign founders must consider local officer requirements, apostilles, branch tax treatment, and constitutional restrictions on land ownership.
Foundations must file annual SEC reports, audited financial statements, tax returns, program disclosures, and other required records.
Strong bylaws, independent board oversight, clear financial controls, and proper documentation are essential to protecting both the foundation and its beneficiaries.