What is a Domestic Corporation in the Philippines?

A domestic corporation in the Philippines is a legal entity incorporated under Philippine law, with its office located within the country. It is one of the most popular business entities among foreigners as It is similar to an LLC and offers limited liability protection for its shareholders.

From the ownership perspective, domestic corporations can be fully owned by foreigners or have up to 40% foreign ownership, depending on the industry. When a domestic corporation in the philippines is 100% foreign owned, it is known as a foreign-owned domestic corporation.

A domestic corporation must have 2 to 15 directors or shareholders. These shareholder can be any of the following:

• Person
• Partnership
• Association
• Corporation

Foreign Owned Domestic Corporation in the Philippines

While most business lines in the Philippines allow foreign ownership, some industries have limitation in place in terms of percentage of foreign ownership per the Foreign Investment Negative List.

Industries that allow 100% foreign ownership of a domestic corporation in the Philippines include:

• Internet businesses
• Wellness centers
• Teaching in higher education or outside the formal education system
• Lending companies
• Financing companies
• Investment houses
• IT
• Service sector businesses

For industries on Foreign Investment Negative List, the allowed percentage of foreign ownership varies depending on the industry. For more details on that, you can fill out the form below and we will put you in touch with our business advisors.

Minimum Capital Requirements for a Domestic Corporation in the Philippines

The minimum capital requirement for a domestic corporation with over 40% of foreign ownership is USD 200,000.

However, this minimum capital requirement can be just USD 100,000 if your business employs at least 50 Filipino citizens or if it uses advanced technology as approved by the Department of Science and Technology.

The minimum capital requirement is only PHP 5,000 (approx. USD 100) if your business meets the following criteria:

• The percentage of local ownership is at least 60%
• Your business exports 70% of its products

Registering a Domestic Corporation in the Philippines

The registration of a domestic corporation in the Philippines involves submitting and securing documents from different government agencies.

Emerhub handles the entire process on your behalf and acquires all mandatory licenses and permit including the following:

• Certificate of Registration with the Securities and Exchange Commission
• Mayor’s permit from the relevant local government
• Certificate of Registration with the Bureau of Internal Revenue (BIR Certificate)

At the same time, we will register your employees with the Social Security System, the national health insurance system, and the Home Development Fund.

With Emerhub, the entire incorporation process for a domestic corporation in the Philippines takes around 4 to 6 weeks.

You can discuss your needs and business goals with Emerhub’s business advisors by filling out the form below.

Corporate Structure of a Domestic Corporation

All domestic corporations in the Philippines must have a president, a corporate secretary, and a treasurer as corporate officers. The appointment of the officers must happen within 15 days from incorporation.

Emerhub also assists foreign investors with appointing the corporate officers if needed and notifies the Securities and Exchange Commission (SEC) of the appointment within the mandated timeframe.

1. President

The corporation’s president acts as the signatory of the organization. The president does not have to be a resident of the Philippines. However, they must be a director and a shareholder of the corporation.

2. Corporate Secretary

The corporate secretary is in charge of administrative and informative work as well as safekeeping and preserving records, documents, and minutes of all meetings. The corporate secretary has to be a citizen of the Philippines. Out of all the required corporate officers, this is the only position that requires a Filipino citizen.

3. Treasurer

The corporation’s treasurer is in charge of the entity’s financial matters including annual statements, financial reports, funds, and other valuable effects belonging to the corporation. He or she does not have to be a Filipino citizen but must be a resident of the country.

Emerhub’s business advisors will gather all the required documents and handle the entire domestic corporation registration process on your behalf. For more information, fill out the form below or book an appointment directly with one of out experts.