Incorporation Requirements and Process in the Philippines
A comprehensive guide under the Revised Corporation Code (Republic Act No. 11232) and related issuances
1. Legal Framework
| Instrument |
Key Points |
| Revised Corporation Code (RCC) – RA 11232 (in force since 23 Feb 2019) |
Replaced the 1980 Corporation Code; introduced the One Person Corporation (OPC), perpetual corporate terms, simplified quorum and voting, and wider use of digital technology. |
| Foreign Investments Act (FIA) – RA 7042, as amended |
Governs foreign equity, negative lists, and minimum paid-in capital for >40 % foreign-owned corporations. |
| Anti-Dummy Law (CA 108) |
Criminalizes circumvention of foreign-ownership limits. |
| Securities Regulation Code (RA 8799) and SEC Memorandum Circulars |
Provide the rule-making and enforcement powers of the Securities and Exchange Commission (SEC) over corporations. |
| Special laws (e.g., PEZA, CREATE, Insurance Code, Bangko Sentral charter) |
Impose sector-specific minimum capital and licensing layers. |
2. Recognised Corporate Forms
| Form |
Minimum Incorporators / Capital |
Distinct Features |
| Stock Corporation |
2 – 15 incorporators (natural or juridical persons); no par value floor except when required by special law; at least 25 % of authorised capital subscribed and ≥25 % of that paid-in, but not < PHP 5,000. |
Ordinary for-profit vehicle; may have perpetual life unless limited. |
| One Person Corporation (OPC) |
Single natural person, trust, or estate; no minimum capital unless industry-specific; must nominate nominee and alternate nominee. |
Limited liability without partners or co-shareholders. |
| Non-Stock, Non-Profit Corporation |
5 – 15 natural persons; no capital structure but must disclose contributions; assets committed to stated purpose. |
Cannot distribute income as dividends. |
| Foreign Corporation Branch / Representative Office |
Parent company; “license to do business” instead of separate legal personality; security deposit requirement for branches. |
Branch may earn income; rep office must be cost-center only. |
Partnerships are registered with the SEC but governed by the Civil Code; General Professional Partnerships are exempt from corporate income tax but not covered here.
3. Pre-Incorporation Planning
- Name Clearance – Reserve through the Corporate Name Verification System module of eSPARC. Avoid protected terms (e.g., “bank,” “insurance”) without prior Bangko Sentral/IC endorsement.
- Foreign Ownership Check – Consult the latest Foreign Investment Negative List; apply Anti-Dummy precautions for partly nationalised activities (e.g., public utilities, mass media).
- Capitalisation – Consider:
- FIA minimum of USD 200 000 paid-in (≈ PHP 11 M) for >40 % foreign-owned domestic market enterprises, unless exempted (e.g., employment of 50 Philippine workers, use of advanced technology).
- Industry-specific floors (banks, insurance, fintech, etc.).
- Principal Office Address – Must be a Philippine address; P.O. Boxes are disallowed.
- Board Composition – Regular corporations: 2–15 directors (stock) or trustees (non-stock), at least majority residents; OPC: single director-president.
- Treasurer-in-Trust (TITF) – Named in the Articles to receive subscription payments prior to SEC approval.
4. Core Documentary Requirements
| Document |
Highlights under SEC Forms |
Notarisation / Digital Signature |
| Articles of Incorporation (AI) |
SEC provide dynamic templates in eSPARC; must state primary/secondary purpose(s), capital structure, incorporators, term, and principal office. |
AI and Treasurer’s Affidavit are now accepted with digital signatures and electronic notarisation (SEC MC 16-2023). |
| By-Laws (submit within 30 days if not simultaneous) |
Governance rules, meetings, officers, fiscal year, stock certificates, arbitration clause. |
Same signature rules as AI. |
| Treasurer’s Affidavit / Statement of Capital |
Confirms receipt of paid-in capital and compliance with 25 % / PHP 5,000 rule. |
Notarised (digital allowed). |
| Bank Certificate (if required) |
For large paid-in amounts or OPC capital; shows deposit of subscription money. |
|
| Cover Sheet & Contact Sheet |
Auto-generated by eSPARC; lists primary contact e-mail and mobile number. |
|
| Additional OPC Forms |
Nominee and Alternate Nominee consents, minutes for election of officers within 15 days from issuance of SEC Certificate. |
|
| Beneficial Ownership Declaration |
Mandatory since SEC MC 1-2024 for anti-money laundering compliance. |
|
5. Step-by-Step SEC Registration via eSPARC / CRSSIS
| Step |
Action |
Typical Time |
| 1. Account Creation & Name Reservation |
Create user profile; pay PHP 100 for 30-day name hold (extendable). |
Same day |
| 2. Fill-out AI / By-Laws online |
System auto-validates share structure, foreign equity %, and director residency. |
1–2 days |
| 3. Upload Attachments |
IDs, special licenses (if using regulated words), proof of inward remittance for foreign subscription (optional at this stage). |
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| 4. Pay Filing Fees |
Base fee: 0.2 % of authorised capital stock + PHP 2,000 legal research + PHP 1,010 filing fee (stock). Non-stock: fixed PHP 2,030. |
Instant through e-payment partners |
| 5. SEC Evaluation |
Name & document review; clarificatory e-mails through the system. |
3–7 working days (longer for regulated industries) |
| 6. Issuance of Certificate of Incorporation / License |
Downloadable PDF with SEC Registration Number and QR code. |
Within 24 h of approval |
| 7. Post-Issuance Upload |
Upload stock & transfer book details, beneficial ownership declarations. |
15–30 days |
Walk-in filings remain for special corporations, foundations, and applications with voluminous attachments.
6. Special & Ancillary Registrations
- Bureau of Internal Revenue (BIR) – Within 30 days:
- Secure Corporate TIN and Certificate of Registration (COR – BIR Form 2303).
- Register books of accounts (manual or loose-leaf) and official receipts/invoices (Ask for ATP).
- Local Government Permits – Barangay clearance, Mayor’s/Business Permit, and Fire Safety Inspection Certificate, ordinarily before commencing operations.
- Social Agencies – Enroll as employer with SSS, PhilHealth, Pag-IBIG, and (if ≥10 employees) file DOLE report.
- Incentive Bodies – Apply with PEZA, BOI, CDC, etc., if eligible.
- Other Regulators – BSP/IC/SEC Markets and Securities Division for banks, insurance companies, financing/lending, securities dealers, crypto-asset service providers, etc.
7. Ongoing Corporate Compliance
| Filing |
Statutory Deadline |
Notes |
| General Information Sheet (GIS) |
Within 30 days after annual stockholders’ meeting (or anniversary date for OPC) |
Now submitted exclusively through the SEC Online Submission Tool (OST). |
| Audited Financial Statements (AFS) |
120 days after fiscal year-end; staggered e-filing schedule by last digit of SEC number. |
Micro & small corps may file Accountant-compiled AFS; mandatory e-STAMP since 2024. |
| Beneficial Ownership Updates |
Within 30 days of any change; confirm annually via GIS. |
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| BIR Annual Returns & Renewals |
eFPS/eBIR deadlines; renewal of business permits every January. |
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| Mandatory Books |
Minutes books, stock & transfer book, share register. |
Digital stock certificates allowed under RCC §§ 62-65. |
Non-compliance can lead to administrative fines (PHP 10 000 – 1 M per violation), suspension or revocation, and personal liability of directors/trustees.
8. Foreign Corporations: Branch or Representative Office
| Item |
Branch |
Representative Office |
| Activities |
Revenue-earning, same line as parent. |
Limited to liaison, promotion, quality control, etc.; must be fully funded. |
| Capital |
SEC requires inward remittance of ≥ USD 200,000 (or higher sector-specific). |
USD 30,000 annually. |
| Security Deposit |
60 days after licence issuance: PHP-equivalent of USD 100,000 placed with an SEC-designated bank; additional deposits if gross assets grow. |
Not required. |
| Tax |
25 % income tax on PH-sourced income + 15 % branch profits remittance tax. |
Exempt (no income). |
9. Recent Reforms & Digitalisation (2021 – 2025)
- eSPARC/CRS (2021) – End-to-end online incorporation; AI and By-laws generated in real time.
- OST (2022) – Mandatory electronic filing of AFS, GIS, and other reports.
- SEC MC 16-2023 – Recognition of electronic notarisation and digital signatures.
- SEC MC 1-2024 – Enhanced Beneficial Ownership Transparency; hefty fines for late/false filing.
- CREATE Act Rules (2021-2024) – 25 % corporate income tax (regular), reduced to 20 % for domestic SMEs with net taxable income ≤ PHP 5 M & assets ≤ PHP 100 M.
- Proposed Online Dissolution & Re-Activation Rules (2025 draft) – Will allow 30-day voluntary dissolution through eSPARC provided creditors’ notice is posted for 3 weeks.
10. Practical Tips & Common Pitfalls
- Use SEC templates faithfully. Free-form AIs are the top ground for rejection.
- Tag foreign equity accurately. Even 1 % error triggers re-processing.
- Maintain a compliance calendar—sync SEC, BIR, LGU, and labor deadlines.
- Open a “Treasurer-in-Trust” account early; banks often require pre-approval letters.
- Engage a licensed Corporate Secretary or Resident Agent familiar with eSPARC and OST.
- Keep digital copies of signed AI, By-laws, and amendments; OST filings rely on re-upload.
- Update beneficial ownership promptly—the SEC now cross-matches with bank KYC and AMLC data.
Conclusion
Incorporating in the Philippines is markedly faster and more investor-friendly today, but success still hinges on strict observance of capital, ownership, and reporting rules. The Revised Corporation Code’s flexibility—especially the OPC regime—opens the door to small entrepreneurs and foreign entrants alike, yet the SEC’s expanding digital compliance net demands disciplined governance from day one. By following the steps and principles outlined above and seeking specialised advice where sector-specific laws apply, founders can secure a solid legal platform for sustainable growth in the Philippine market.