Company registration Philippines

Set up a foreign owned company in the Philippines

Control up to 100% of the shares.

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What are my options for setting up a foreign owned company in the Philippines?

Philippine laws allow foreigners to hold shares or control in the following legal entities:

  • Branch
  • Representative office
  • Domestic corporation

Most popular option by far among the foreign investors is to set up a domestic corporation. This is mainly for the following reasons:

  • Liability is limited to the equity of the company
  • Setup time is much faster and easier compared to branch
  • Unlike representative offices, domestic corporations can earn revenue in the Philippines

Requirements for the domestic corporation in the Philippines

Domestic corporations with foreign ownership will have to comply with the following requirements:

  • Minimum 5 natural shareholders/incorporators (legal persons are not allowed) that each owe at least one share in the company.
  • Majority of the incorporators (but not shares) have to be residents of the Philippines. Residents don’t have to be citizens.
  • 5-15 directors/trustees that all have to own at least one share. Majority of them have to be residents of the Philippines.
  • Minimum paid up capital of $US200,000 unless the company qualifies for the reduced capital requirements.

Note that some industries are in the Negative Investment List which reduces the maximum foreign ownership for certain business classifications. Consult our consultants to understand exactly the restrictions for your industry.

Complying with the local resident requirement

Local laws require majority of the incorporators and directors to be residents of the Philippines. This is a problem for most foreign companies, especially when entering the country. Which is why Emerhub provides a nominee incorporator and director service that allows company registration in the Philippines with:

  • 2 foreign incorporators only. Resident incorporators will be provided by Emerhub and their shares will be pledged to you.
  • 2 foreign directors only. Resident directors are provided through the same set of agreements.

Note that this service is fundamentally different from engaging friends, family and co-workers as nominees. You will be provided local residents as a professional service and both sides rights are protected through a set of legal agreements. Also, you are able to change the shareholders and directors at any time.

Reducing minimum capital in the Philippines

There are three main ways to reduce the required minimum paid up capital of $US200,000:

  • At least 60% of the products/services are exported
  • At least 60% of the shares are owned by local citizens
  • Company uses advanced technology and hires at least 50 employees.

The first two options reduce the required minimum capital to essentially nothing and are commonly used to register a company in the Philippines.

In case you don’t meet any of the requirements stated above but still want to reduce the paid-up capital the easiest way is to use shareholding service provided by Emerhub (see above) that formally reduces foreign shares to 40% while giving you full control over the company.

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