SEC Foundation Registration Requirements in the Philippines
(A comprehensive legal guide as of 19 June 2025)
1. What Is a “Foundation” under Philippine Law?
A foundation is a special form of non-stock, non-profit corporation organized under the Revised Corporation Code (RCC, R.A. 11232) exclusively for charitable, religious, educational, cultural, civic, or similar purposes, and endowed with a dedicated patrimony of at least ₱1 million to be set aside in perpetuity for those purposes.
- Foundations are governed primarily by the RCC and SEC Memorandum Circular (MC) 8-2006 (as amended by MC 15-2019 and MC 8-2022).
- They also fall under the purview of special laws such as the National Internal Revenue Code (tax exemption), Anti-Money Laundering Act (AMLA) and its 2021 Implementing Rules for non-profit organisations, the Data Privacy Act, and the Anti-Terrorism Act (whenever international donations are involved).
2. Pre-Formation Considerations
| Item | Key Rule | Practical Tip |
|---|---|---|
| Corporate Name | Must include the word “Foundation” and pass SEC’s online Name Verification. | Reserve the name for 30 days (extendable to 90) before drafting documents. |
| Incorporators / Trustees | Minimum 5 (individuals or juridical persons); majority must be Filipino citizens and all must be residents of the Philippines. | Foreign incorporators must apostille/consularise proof of identity and authority. |
| Initial Endowment | ₱1,000,000 minimum; at least 50 % in cash deposited in the proposed foundation’s bank account. | Secure a Bank Certificate showing the amount and that the account is in the name of the intended foundation “in organization.” |
| Secondary Licences | Some foundations (e.g., micro-finance, scholarships, children’s homes) require additional permits from DSWD, DepEd/CHED/DOH, BSP, etc. | Check sector-specific regulators early to avoid delays. |
3. Core Documentary Requirements
Cover Sheet (SEC Form)
Articles of Incorporation (AOI) Must follow RCC §13 and MC 8-2006; include:
- Exact name;
- Specific charitable purposes;
- Principal office (city/municipality within the Philippines);
- List of incorporators with citizenship and residential addresses;
- Manner of asset distribution on dissolution (assets must go to another SEC-accredited foundation or the State, never to private individuals);
- Amount, form, and schedule of initial endowment;
- Term (foundations are usually “perpetual,” but may state a definite term).
By-Laws (filed within 30 days from issuance of Certificate of Incorporation if not filed simultaneously).
- Board composition (5–15 trustees), term limits (not >5 years per term), meeting quorum, officers, conflict-of-interest policy, fiscal controls, and dissolution-asset rules.
Notarised Treasurer-In-Trustee Affidavit confirming receipt of the initial endowment.
Bank Certificate of Deposit (≥₱1 million).
List of Contributors/Donors and their signed pledges, if the initial fund came from several persons.
Sworn Statement of Willingness to Allow SEC On-Site Examination (SEC MC 15-2019).
Undertaking to Change Corporate Name if a third party later obtains a confusingly similar mark.
For any Foreign Contributor, Incorporator, or Trustee
- Apostilled copies of passport/board resolution;
- “ Certificate of Good Standing/Existence ” issued by the foreign registrar, apostilled;
- Resident Agent Appointment and accompanying consent.
4. Filing Fees (2025 Schedule)
| Fee Type | Calculation | Minimum |
|---|---|---|
| Basic Filing Fee | 1/5 of 1 % of the initial endowment | ₱2,000 |
| Legal Research Fee | 1 % of the Basic Filing Fee | — |
| Name Reservation | ₱100 per 30-day block | — |
| By-Laws Filing (if separate) | ₱1,010 | — |
| Documentary Stamp Tax (DST) | ₱30 on each original AOI & By-Laws | — |
Fees are paid at SEC cashier or through SEC’s Electronic Filing and Submission System (eFAST).
5. SEC Processing Timeline
- Online submission via eFAST with scanned, signed PDFs.
- Payment posting (1–2 business days).
- Substantive Review by SEC Corporate and Partnership Registration Division (5–15 working days).
- Release of Certificate of Incorporation and separate “Certificate of Registration as a Foundation”.
6. Post-Incorporation Obligations
| Compliance | Deadline / Frequency | Notes |
|---|---|---|
| General Information Sheet (GIS) | Within 30 days after the annual members’ meeting (which must be held on the date fixed in the by-laws). | Must list trustees, officers, and “related party transactions.” |
| Audited Financial Statements (AFS) | 120 days from fiscal year-end. | Audit by an independent CPA accredited with the Board of Accountancy and SEC. |
| Foundation-Specific Annual Report | Same deadline as AFS. | Utilisation of funds, list of projects/beneficiaries, breakdown of administrative vs. program expenses (admin cap is generally 30 %). |
| Monthly Updates to Books of Accounts | Ongoing | Must show each donation received and project disbursement. |
| Registration with BIR | Within 30 days from SEC registration | Secure TIN, register books, and apply for tax-exempt status under NIRC §30(E), (G). |
| PCNC Accreditation (voluntary but strategic) | Valid for 1–3 years | Gives “qualified donee institution” status—donations become tax-deductible to donors. |
| AMLA Registration (Anti-Terrorism Council) | Within 30 days of start of operations if annual receipts or assets ≥ ₱500 million, or if foreign funding ≥ ₱50 million. | Includes submission of a Risk Assessment and AML/CFT Manual. |
7. Governance & Control Requirements
Board Independence & Rotation
- At least 20 % of trustees must be independent (not related within 4th civil degree to other trustees/founder).
- No trustee may receive compensation, only reasonable per diems.
Conflict-of-Interest Policy
- Mandatory written policy; conflicted trustee abstains from voting.
Financial Buffer Rule
- Foundations must keep at least 20 % of unrestricted funds invested in low-risk, liquid instruments (e.g., time deposits, government bonds).
Whistle-Blower & Anti-Fraud Procedures
- Required under SEC MC 15-2019 for foundations with annual gross receipts ≥₱50 million.
Data Privacy Compliance
- Register Data Protection Officer with the National Privacy Commission; adopt Privacy Manual.
8. Amendments, Merger, Dissolution
| Action | Key Steps | Regulatory Touch-points |
|---|---|---|
| Amend AOI / By-Laws | 2/3 vote of members; file Amended AOI or By-Laws with SEC within 60 days | Notice to donors; updated bank certificate if change affects patrimony |
| Merger with Another Foundation | Plan of Merger; SEC and possibly DSWD/CHED approval | Transfer of assets subject to BIR Clearance |
| Voluntary Dissolution | Members’ or board vote, publication of notice, clearance from BIR and other agencies, SEC approval | ALL remaining assets must be donated to another SEC-accredited foundation or escheat to the State |
9. Grounds for Revocation or Suspension by SEC
- Misapplication or non-use of assets for stated purposes;
- Failure to file AFS or GIS for 5 consecutive years;
- Obtaining incorporation through fraud or misrepresentation;
- Operating as a for-profit enterprise;
- Financing terrorism or serious AMLA violations.
Due process: SEC issues a Show-Cause Order, followed by investigation, and may appoint a management committee or directly dissolve the entity.
10. Tax Treatment & Incentives
| Tax Type | Normal Rule | Foundation Advantage |
|---|---|---|
| Income Tax | 25 % corporate rate | Exempt under NIRC §30(E)/(G) if income is actually, directly, and exclusively used for the exempt purpose. |
| Donor’s Tax / Estate Tax | 6 % | Donations/legacies to PCNC-accredited foundations are 100 % exempt. |
| VAT | 12 % | Exempt on purchases funded by grants/donations; may need VAT rulings for large imports. |
| Local Taxes | LGUs may levy business tax | Exempt under Local Government Code §133(o) for non-profit, non-stock orgs. |
11. Best-Practice Tips for 2025 Onwards
- Digital Filing: Use SEC eFAST exclusively; paper submissions are accepted only by exception.
- ESG Reporting: Large foundations voluntarily publish sustainability/impact reports aligned with UN SDGs—helps in grant applications.
- Cyber-Security: Foundations handling foreign online donations should adopt NIST Cyber-security Framework Tier 2 at minimum (SEC Advisory, May 2024).
- Board Diversity: SEC encourages at least 30 % female trustees; not yet mandatory but regarded as good governance.
- Succession Planning: Foundations are perpetual; create a Board-approved plan naming successor trustees and procedures for replenishing the patrimony.
Conclusion
Forming a Philippine foundation is more rigorous than organising an ordinary non-stock corporation due to heightened public-interest oversight. The incorporators must secure a substantial initial endowment, craft purpose-specific governance documents, and commit to transparent reporting and internal controls. Once registered, the foundation enjoys significant tax and reputational advantages, provided it strictly adheres to its charitable mandate and the SEC’s evolving compliance framework. Careful planning, early coordination with banks, auditors, and (where relevant) sectoral regulators, and continuous governance education for trustees will ensure both regulatory peace of mind and mission effectiveness well beyond 2025.