The Philippines allows 100% foreign ownership in most industries, making it one of the more accessible markets in Southeast Asia for foreign investors. Registering a company is straightforward once you understand the capital requirements, business structures, and steps involved.
That said, registration is not the only option. If your main goal is to hire employees who will support your overseas operations rather than serve Philippine customers, an Employer of Record (EOR) may be a faster and more cost-effective route. We will cover both paths in this guide so you can decide which makes sense for your situation.
This guide walks through the company registration process, from ownership rules to incorporation steps, then helps you evaluate whether setting up an entity is the right move.
When company registration makes sense
Company registration is the standard path for foreign investors planning to build a lasting presence in the Philippines. But it comes with capital requirements, compliance obligations, and setup time. Before diving into the process, it is worth understanding when registration is necessary and when an alternative like an EOR might be more practical.
You should register a company if
- You need to generate revenue in the Philippines. If you are selling to Philippine customers, issuing local invoices, or operating a retail business, you need a registered entity.
- You want to access tax incentives. Programs like PEZA and BOI offer significant tax breaks, but they require a registered Philippine company.
- You are building long-term operations. If the Philippines is a strategic market and you plan to scale over time, owning your entity gives you more control.
- You plan to hire 30 or more employees. At this scale, the per-employee cost of an EOR adds up, and having your own entity becomes more economical.
An EOR may be a better fit if
Not every company needs its own entity. An Employer of Record allows you to hire employees legally without registering a company. This typically makes more sense if:
- You are hiring fewer than 30 employees. The fixed costs of company registration, compliance, and local accounting may not justify the headcount.
- Your team will support your overseas business, not serve Philippine customers. If you are building a remote team or back-office operation, you do not need local revenue-generating capability.
- You want to start quickly. Company registration takes 8 to 12 weeks. An EOR can have employees onboarded within days.
- You are testing the market. If you are unsure about long-term commitment, an EOR lets you hire and operate without the overhead of a permanent entity.
We cover how EOR works in more detail later in this guide. For now, let us walk through the registration process for those who need it.
What types of businesses can foreigners own?
The Philippines allows 100% foreign ownership in most industries. The exceptions are listed in the Foreign Investment Negative List (FINL), which restricts or caps foreign participation in certain sectors.
Fully open to foreign ownership
Most service and technology businesses have no restrictions:
- IT and business process outsourcing (BPO)
- E-commerce and online services
- Consulting and professional services
- Software development
- Export manufacturing (if 60% or more is exported)
- Renewable energy and technology ventures
Restricted or capped industries
Some industries have foreign ownership limits:
| Industry | Foreign Ownership Limit |
|---|---|
| Retail trade (under USD 2.5M capital) | 0% |
| Retail trade (USD 2.5M+ capital) | 100% |
| Advertising | 30% |
| Mass media | 0% |
| Land ownership | 0% (lease only) |
If your business falls into a restricted category, you will need a Filipino partner or a different structure. For most tech, services, and export-oriented businesses, 100% foreign ownership is straightforward.
Business structures for foreign owners in the Philippines
Foreign investors typically choose one of two structures: a domestic corporation or a One Person Corporation. Both offer limited liability protection, meaning your personal assets are separate from business obligations.
1. Foreign-Owned Domestic Corporation
This is the standard structure for foreign-owned companies. It requires at least two incorporators (up to 15), who can be individuals or other corporations. You will need to appoint a resident director (can be a foreigner living in the Philippines), a Filipino corporate secretary, and a resident treasurer.
This structure is suitable for companies with multiple shareholders or those planning to scale operations over time.
2. One Person Corporation (OPC)
An OPC allows a single individual to form a corporation with full limited liability protection. The sole shareholder acts as both director and president. You must also appoint a nominee and alternate nominee to assume control in case of death or incapacity.
This structure is suitable for solo entrepreneurs, consultants, or small business owners who want full ownership under a corporate framework with simpler governance requirements.
3. Branch office or representative office
If you want to operate under your parent company’s name rather than creating a new entity, you can register a branch office (which can generate revenue) or a representative office (limited to marketing, liaison, and support functions). A representative office requires USD 30,000 in capital but cannot earn local income.
Capital requirements for foreign-owned companies
The amount of capital you need to deposit depends on your ownership structure and business type you plan to setup in the Philippines. Below are the minimum capital requirements for foreign-owned companies in the Philippines:
| Situation | Minimum Capital |
|---|---|
| Standard foreign-owned domestic corporation | USD 200,000 |
| Advanced technology or 50+ Filipino employees | USD 100,000 |
| Export-oriented (60%+ revenue from exports) | No minimum |
| 40% or less foreign ownership | No minimum |
| Representative office | USD 30,000 |
The export-oriented exemption is significant: if your Philippine operation primarily serves overseas clients (as most offshore teams do), you may not need to meet the USD 200,000 threshold. This is worth discussing with your incorporation provider before you begin. To discuss your needs with our local experts, fill out the form below.
How company registration works
Registering a company in the Philippines involves several government agencies and typically takes 8 to 12 weeks from start to finish. Here is what the process looks like.
1. Reserve your company name
Submit a name reservation through the SEC’s Company Registration System. The name must be unique and not similar to existing registered companies. This step is quick, usually a few days.
2. Prepare and file incorporation documents
You will need to prepare Articles of Incorporation and By-laws, a Treasurer’s Affidavit, and proof of paid-up capital. If you are setting up a branch office, your parent company documents must be authenticated by the Philippine consulate.
The SEC reviews these documents and, if everything is in order, issues your Certificate of Incorporation.
3. Secure local permits
Once incorporated, you need two local permits to operate:
- Barangay Clearance: Issued by the local barangay (village) where your office is located.
- Mayor’s Permit: Issued by the city or municipality. Requires fire inspection, office layout plans, and your SEC certificate.
These permits are where delays often happen. Processing times vary by location, and requirements can differ between cities.
4. Register with the BIR
The Bureau of Internal Revenue (BIR) issues your Tax Identification Number (TIN), registers your books of accounts, and authorizes you to print official receipts and invoices. This step is mandatory before you can issue invoices or hire employees.
5. Open a corporate bank account
You will need a corporate bank account to deposit your paid-up capital. Banks typically require your SEC certificate, Articles of Incorporation, IDs of authorized signatories, and proof of inward remittance for the capital.
6. Register with labor agencies
Before hiring employees, register with SSS (Social Security System), PhilHealth, and Pag-IBIG Fund. These are mandatory contributions that form part of your payroll obligations.
Tax incentives in the Philippines for foreign investors
The Philippines offers tax incentives through Investment Promotion Agencies (IPAs) to encourage investment in priority sectors. These programs are worth considering if you are making a significant investment, but they come with compliance requirements.
A. PEZA (Philippine Economic Zone Authority)
PEZA offers incentives for companies operating in designated economic zones, particularly IT parks and export processing zones. Benefits include 4 to 7 years of income tax holiday, followed by a flat 5% tax on gross income in lieu of all other taxes. You also get duty-free importation of equipment and VAT zero-rating on local purchases.
PEZA is popular with BPO and IT companies. The trade-off is that you must locate in a PEZA-accredited zone and meet export or IT service requirements.
B. BOI (Board of Investments)
BOI incentives apply to companies in sectors listed under the Strategic Investment Priority Plan, such as renewable energy, manufacturing, and infrastructure. Benefits include income tax holidays and duty-free importation.
To qualify as a foreign-owned company, you typically need to export at least 70% of your output.
Both programs require registration, regular reporting, and compliance with performance commitments. They are not automatic, so factor in the administrative overhead when deciding whether to pursue them.
Hiring without a local entity: How an EOR works
If registering a company does not make sense for your situation, an Employer of Record (EOR) offers a faster and lower-risk alternative.
An EOR is a local company such as Recruitgo, that legally employs workers on your behalf. We handle payroll, taxes, government contributions, and employment contracts in your stead and charge a nominal EOR service fee for that.
You retain full control over your employees’ day-to-day work and performance, while Recruitgo as your EOR manages the administrative and compliance burden.
What an EOR handles
- Employment contracts compliant with Philippine labor law
- Monthly payroll processing
- Withholding and remitting income tax
- SSS, PhilHealth, and Pag-IBIG contributions
- 13th month pay and other statutory benefits
- Termination and offboarding in compliance with local law
When to use an EOR vs. registering a company
Here is a simple way to think about it:
| Use an EOR if… | Register a company if… |
|---|---|
| Hiring fewer than 30 employees | Hiring 30+ employees |
| Team serves your overseas business | Need to invoice Philippine customers |
| Want to start within days | Can wait 8-12 weeks |
| Testing the market | Building long-term operations |
| Want to avoid capital outlay | Qualify for tax incentives (PEZA/BOI) |
Many companies start with an EOR while they evaluate the market, then transition to their own entity once headcount grows or they decide to pursue local revenue.
Getting started in the Philippines
The path you choose depends on what you are trying to accomplish. If you need to generate local revenue, access tax incentives, or are scaling beyond 30 employees, registering a company gives you the most flexibility. If you are building a remote team or back-office operation and want to move quickly without the overhead of a local entity, an EOR is the more practical route.
We help foreign companies with both options. Whether you need to incorporate a Philippine entity or want to start hiring through an EOR, our team can guide you through the process and handle the compliance so you can focus on your operations.
Reach out to discuss which approach makes sense for your situation.
Company incorporation in the Philippines typically takes 8 to 12 weeks from start to finish. The SEC registration itself can be completed in 1 to 2 weeks, but securing local permits (Barangay Clearance and Mayor’s Permit) often takes longer. Delays are common if documents are incomplete or if you are registering during peak periods.
Virtual offices are permitted for certain service-oriented or holding companies, but not for all business types. You will need a physical address that is properly zoned for business use. The address appears on your registration documents and is used for government correspondence and inspections.
No. Foreigners cannot own land directly. You can lease land for up to 75 years (50 + 25 year renewal) or own up to 40% of a condominium project.
Some investors use a corporation with majority Filipino ownership to hold land, though this has legal complexities.
No, but it helps. Most of the process can be done remotely with an incorporation service provider. However, opening a corporate bank account may require at least one signatory to appear in person, depending on the bank.
Annual requirements include SEC Annual Reports, BIR quarterly and annual tax filings, and business permit renewals with the local government. You will also need to maintain proper books of accounts and file audited financial statements if your company meets certain revenue thresholds.
The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, passed in 2021, reduced the corporate income tax rate from 30% to 25% (or 20% for small businesses). It also streamlined tax incentives under a unified framework. This applies to all registered companies in the Philippines.
