SEC Foundation Registration Requirements in the Philippines

A comprehensive legal primer (June 2025)

*Important – This article is for general information only and does not constitute legal advice. Always confirm the latest issuances of the Securities and Exchange Commission (SEC), the Bureau of Internal Revenue (BIR), and other concerned agencies, or consult Philippine counsel before acting.

1. Concept & Legal Bases

Legal Source	Key Provisions Relevant to Foundations
Revised Corporation Code (R.A. 11232, 2019)	Defines non-stock, non-profit corporations (NSNPCs) and foundations; prescribes resident-trustee requirement, dissolution rules, reportorial duties, penalties.
SEC Memorandum Circulars (MC) (notably 2-2001, 8-2006, 3-2008, 15-2019, 23-2023)	Impose the ₱1 million minimum contributed capital, corporate governance standards, stricter financial and AML/CTF reporting, on-line filing mechanics, and sanctions matrix.
Special Laws – R.A. 10963 (TRAIN), R.A. 11534 (CREATE), AMLA (R.A. 9160 as amended), Data Privacy Act (R.A. 10173), etc.	Govern tax incentives, donor deductibility, anti-money-laundering supervision, data protection, and other compliance overlays.

Foundation under Philippine corporate law is a special class of NSNPC organized exclusively for charitable, religious, educational, cultural, social-welfare, or similar purposes with a dedicated and permanent fund.

2. Who May Organize

At least five (5) incorporators, all natural persons, majority of whom must be residents of the Philippines.
Incorporators must be of legal age and not disqualified under the RCC (e.g., by final conviction for fraud).
They become the initial trustees (minimum 5, maximum 15). Corporations can later become members but cannot be incorporators.

3. Minimum Capital & Fund Commitment

Requirement	Details
Total committed contribution	₱1,000,000.00 (in cash or property of clear title and at FMV) per MC 2-2001 and reiterated in MC 3-2008 & MC 15-2019.
Initial paid-in	At least 50 % of the commitment must be actually received by the foundation upon filing, the balance within five (5) years.
Escrow/Proof	Submit bank certificate (for cash) or deeds of assignment/valuation reports (for property). The fund is irrevocably dedicated to the purposes stated.

4. Documentary Requirements (SEC)

Name Reservation Notice (valid 30 days; extension possible).
Articles of Incorporation – must include, inter alia:
- Exact name + “Foundation” suffix
- Specific primary & secondary purposes (no mixed profit motives)
- Principal office (must be in the Philippines)
- Term (may be perpetual)
- Names, citizenship, and addresses of incorporators/trustees
- Amount of contributed capital and schedule of payments
- Asset-distribution clause on dissolution
By-laws (to be filed together or within 30 days of issuance of Certificate of Incorporation) covering meetings, quorum, election of trustees/officers, fiscal year, etc.
Notarized Treasurer’s Affidavit (or CFO affidavit) attesting to receipt/payment schedule of the pledged fund.
Sworn Statement of Willingness to Allow SEC Audit of books and activities.
Five-Year Work & Financial Plan (programs, projected inflows/outflows, sustainability).
List of Possible Sources of Funds and written commitment of donors if any.
Organizational Structure & Governance Manual (per MC 8-2006) – includes code of conduct, internal controls, whistle-blower policy.
Anti-Money-Laundering Compliance Form (latest SEC template) + risk-assessment checklist.
Digital Copies (PDF) uploaded via the SEC Electronic Filing and Submission System (eFAST) plus one set of manually signed originals for post-approval submission.
Filing Fees – roughly ₱2,020 basic filing + ₱1,000 legal research + ₱910 name reservation + ₱3,030 by-laws, plus documentary-stamp tax (DST) on original issuance (₱1.00 per ₱200 of capital, capped because capital is “donation capital”).

5. Step-by-Step Registration Procedure

Reserve Name through SEC’s CRS/eFAST.
Prepare and notarize documents enumerated in §4.
Create user account & upload all PDFs via eFAST (or submit to SEC Extension Office if pilot area).
Pay filing fees (online channels or LANDBANK/UPay).
SEC Examining Lawyer review – may issue deficiencies; respond within 30 days.
Release of Certificate of Incorporation (electronic & physical).
Within 30 days of issuance:
- File By-laws (if not simultaneous).
- Apply for BIR TIN, Authority to Print receipts, and SEC/BIR Books of Account stamping.
- Secure Barangay Clearance and Mayor’s Permit (even if tax-exempt, for LGU registry).
Optional but strategic: within 6 months, secure BIR “Donee Institution” accreditation (for donor deductibility) and DSWD/NEDA/PCNC accreditation if engaged in social welfare/NGO work or seeking government funding.

6. Post-Registration & Continuing Compliance

Obligation	Frequency	Highlights
General Information Sheet (GIS)	Within 30 days of annual members’ meeting (usually every calendar year)	Must use the Foundation-specific GIS showing officers, programs, sources/uses of funds, and AML/CTF compliance box.
Audited Financial Statements (AFS)	Within 120 days of fiscal year-end	Needs CPA external audit plus Statement of Changes in Fund Balance and Schedule of Expenses (program vs. administrative cost – ≤ 30 % admin cap unless justified).
“Program Report” or M & E Report (MC 15-2019)	Annually with GIS	Narrative + quantitative outcomes vs. Five-Year Plan.
Anti-Money-Laundering Internal Controls Review	Annually or as risk dictates	Board approval of AML manual; designate Compliance Officer; file Covered/Suspicious Transaction Reports to AMLC through SEC’s new NPO portal.
Change in Trustees/Officers	Within 30 days of election/resignation	File Notice of Change + amended GIS.
Donations from Foreign Sources exceeding US$10,000	Prior Notice to SEC and AMLC	Provide donor’s identity and intended use.
eFAST Account Maintenance	Continuous	Keep e-mail/phone/authorized filers updated; SEC now serves show-cause orders electronically.

Failure to file any report for three (3) consecutive years triggers automatic delinquency and potential revocation plus administrative fines (up to ₱1 million + ₱1,000/day of delay).

7. Tax & Incentive Considerations (Overview)

Income Tax – Earnings actually, directly, and exclusively used for the foundation’s purpose are exempt (Sec. 30(E), NIRC).
Donor’s Tax & Estate Tax – Gifts/bequests to accredited foundations are 100 % deductible (corporate donors) and exempt (donors).
VAT, DST, Local Taxes – Exempt only on specific qualifying receipts; still liable for VAT as withholding agent if hiring suppliers.
PCNC Accreditation – Optional but highly recommended for full 100 % donor deductibility and streamlined BIR monitoring.

8. Corporate Governance Highlights (SEC MC 8-2006, MC 23-2023)

Independent Trustees – At least one-third or two, whichever is higher, must be independent (no compensation other than per diems, no relatives up to 4th civil degree of other trustees/officers, no substantial donors).
Conflict-of-Interest Policy – Written, board-approved, disclosed in GIS and on website.
Audit Committee chaired by an independent trustee; must review internal control system and recommend external auditor.
Related-Party Transaction (RPT) Policy – Foundations must board-approve all RPTs and disclose in AFS notes.
Whistle-Blowing & Anti-Fraud Policy – Mechanism for anonymous complaints; summary of cases filed to SEC annually.

9. Interaction with Other Regulators

Regulator	When Relevant	Basic Touch-Points
BIR	Tax exemption, donor-deductibility, withholding taxes	Secure Certificate of Tax Exemption (CTE); submit annual ITR Form 1702-EX even if no tax due.
DSWD	Foundations engaged in social welfare or receiving foreign grants	Registration & NGO Compliance Service; performance standards accreditation.
NEDA – NGO-PB	Foundations bidding for ODA-funded projects	Accreditation for participation in government-funded projects.
AML Council	All NPOs	CTR/STR filings; risk-based approach.
Local Government	Mayor’s, barangay permits	LGU can inspect premises for compliance with local ordinances.

10. Foreign Foundations & Representative Offices

A foreign foundation cannot operate in PH without SEC license to establish a branch office or representative office.
Must prove legal existence in home jurisdiction, financial soundness, and ₱1 million inward remittance for liaison office (branch requires more).
Subject to same AML/CTF and reporting rules + specific tax treaty relief procedures.

11. Dissolution & Liquidation

Voluntary dissolution requires board majority and members’ two-thirds (⅔) vote, SEC approval, and publication once a week for three consecutive weeks.
All remaining assets must be distributed in accordance with the Articles to another SEC-registered foundation, NGO, or government-owned institution dedicated to similar purposes – never to private individuals.
Trustees become liquidators by default unless members appoint others; they remain liable until SEC issues Certificate of Dissolution.

12. Penalties & Revocation Grounds

Violation	Possible Sanctions
Late/no GIS or AFS	₱10,000 first offense + ₱1,000/day; suspension at 3 years; revocation at 5 years.
Misrepresentation/falsified docs	Revocation; ₱1 million fine; criminal referral (Art. 319, RCC).
Use of funds for non-authorized purposes	Trustee civil & criminal liability; restitution plus fines.
AML/CTF non-compliance	₱100k-600k per offense; possible registration delisting as non-profit.

13. Practical Tips for a Smooth Registration

Over-document your seed fund – board resolutions, donor pledges, bank certifications.
Craft a specific yet flexible purpose clause (e.g., “to advance community-based STEM education for under-served Filipino youth”) to future-proof activities and BIR rulings.
Align your Five-Year Plan with measurable outputs; SEC reviewers favor clarity on sustainability.
Adopt Philippine Financial Reporting Standards for Small Entities (PFRS-SE) if qualified; it lowers audit cost.
Digitize governance – maintain a secure online members’ portal; eFAST filings trace your IP address.
Set up a robust AML framework early – risk assessment, KYC for donors over ₱100k, cash-threshold controls.

14. Conclusion

Registering a foundation in the Philippines is not a perfunctory exercise in filing forms; it is a regulatory commitment to transparency, accountability, and public benefit that starts with ₱1 million in irrevocable capital and continues through stringent governance and financial-reporting rules. Proper planning, diligent compliance, and a culture of ethical stewardship are indispensable to sustaining legal good standing and, more importantly, public trust in your philanthropic mission.