The most common types of business entities in the Philippines among both local and foreign business owners are:

1. One person corporation (OPC)
2. Corporation (Can be Foreign Owned or Domestic Corporation)
3. Branch Office
4. Representative Office

In many sectors, 100% foreign ownership is now allowed in the Philippines. However, some industries still have foreign ownership restrictions. Our experts can advise on the best structure for your specific business.

Common required documents include:

• Articles of Incorporation
• By-laws
• Board resolutions
• Passport copies of shareholders/directors
• Proof of capital deposit

The minimum capital requirements in the Philippines vary based on the ownership structure and industry. For instance, If you are establishing a local owned domestic corporation, the minimum capital requirement is PHP 5000 (about USD 100). However, for a foreign-owned domestic corporation, the minimum capital requirement starts from USD 200,000.

This can be lower based on your planned business activities. You can consult our experts to get

Steps to establish a business in the Philippines include:

1. Reserving a business name
2. Registering with the Securities and Exchange Commission (SEC)
3. Obtaining local permits (Barangay Clearance, Mayor’s permit)
4. Registering with the Bureau of Internal Revenue (BIR)
5. Registering as an employer with SSS, PhilHealth, etc.

While most industries in the Philippines allow foreign ownership, here are some key industries that are restricted for foreigners in the Philippines as per the Foreign Investment Negative List (FINL):

1. Mass media (except recording and internet business)
2. Practice of professions, with some exceptions
3. Retail trade enterprises with paid-up capital less than ₱25 million
4. Cooperatives
5. Organization and operation of private detectives, watchmen, or security guard agencies
6. Small-scale mining
7. Utilization of marine resources in archipelagic waters, territorial sea, and exclusive economic zone
8. Ownership, operation, and management of cockpits
9. Manufacture, repair, stockpiling, and/or distribution of nuclear weapons, biological/chemical/radiological weapons, and anti-personnel mines
10. Manufacture of firecrackers and other pyrotechnic devices
11. Private recruitment (limited to 25% foreign equity)
12. Contracts for construction of defense-related structures (limited to 25% foreign equity)
13. Advertising (limited to 30% foreign equity)
14. Exploration, development, and utilization of natural resources (limited to 40% foreign equity)
15. Ownership of private lands (limited to 40% foreign equity)
16. Public utilities like electricity distribution/transmission, water pipeline distribution, sewerage, and seaports (limited to 40% foreign equity)

Key taxes for business in the Philippines include:

• Corporate Income Tax: 25% for most businesses
• Value Added Tax (VAT): 12%
• Withholding Tax
• Import Duty (if applicable)

The main permits and licenses required to operate a business in the Philippines include a Mayor’s Permit (also called a Business Permit), Barangay Clearance, and BIR registration. Moreover, depending on the industry and activities, you might need additional permits such as environmental and sanitary permits, fire safety inspection certificates, FDA registration, import license, etc.

Other than business registration, Emerhub offers a full range of services, from obtaining licenses and permits to monthly and annual tax compliance, so you can focus on running your business. For importers, manufacturers, or those interested in setting up an E-commerce business in the Philippines, Emerhub also acts as the Product Holder / License holder and handles the legalities on their behalf.