How to Open a Resort or Guesthouse in the Philippines

For foreign investors planning to start a resort or guest house business in the Philippines, the country’s growing tourism sector presents significant opportunities.

In 2023, the travel and tourism industry in the Philippines grew by 83.6%, contributing over 78 billion USD (₱4.34 trillion) to the country’s economy.

While that accounted for 17.9% of its total economic output, the momentum is set to continue. For 2024, the tourism sector is projected to contribute an impressive $97 Billion (₱5.4 trillion) to the national economy in 2024.

In this article, we will explore the essentials of opening a guest house, resort, or hotel business in the Philippines.

Can Foreigners Own a Resort or Guest House in the Philippines?

Foreigners can own and operate resorts or guest houses in the Philippines. However, they cannot own the land on which these establishments are built due to constitutional restrictions.

Considering that, foreign investors can set up a 100% foreign owned corporation in the Philippines and lease the land for 50 years (extendable by 25 years). Or they can register a corporation with 60% Filipino ownership and own land.

You can book a free consultation with our local experts to discuss your needs and options.

For more details on foreign land ownership, read Buying property in the Philippines as a foreigner.

Requirements for Starting a Resort, Guest House or Hotel Business in the Philippines

Minimum Capital Requirement

The minimum capital requirements in the Philippines vary depending on whether you are setting up a foreign-owned domestic corporation (with 100% foreign ownership) or a domestic corporation (with 60% Filipino ownership).

The general minimum capital requirement for establishing a foreign company in the Philippines is US$200,000. However, depending on your business activities and the percentage of foreign equity, this requirement can also be higher or lower.

As an alternative, you can also set up a domestic corporation which has significantly lower capital requirement. In the Philippines, a company is considered locally owned when at least 60% of the shares are held by locals (nominee shareholder structure).

However, make sure that the agreements between you and the nominee shareholder are revised by legal advisors. Emerhub can assist you with these contracts.

Keep in mind that minimum capital requirement is not the cost of building a resort. The cost of building a resort in the Philippines varies depending on the type of resort you want to build.

Read more about the minimum capital requirement in the Philippines.

Additional Requirements for Operating a Resort or Other Accommodation Establishments

In addition to minimum capital requirements, Philippines also has additional requirements for operating a resort, hotel, or guest house business as defined in the Hotel Code of Philippines.

These requirements vary depending on the classification of resorts (Class AAA, Class AA, Class A) and include the following aspects:

• Location and Environment
• Facilities And Room Accommodation
• Parking (If Applicable)
• Public Washrooms
• Sports and Recreational Facilities
• Conference/Convention Facilities
• Employee Facilities

How to Start a Resort Business in the Philippines

1. Register a Company in the Philippines

One of the first steps towards opening a resort, guest house, or hotel in the Philippines is to register a company with Securities and Exchange Commission of Philippines.

If you want your resort to be 100% foreign owned, you will need to register a foreign owned domestic corporation in the Philippines. Keep in mind that this comes with higher minimum capital requirements and land ownership restrictions.

As an alternative, you can register a local corporation with 60% Filipino ownership as described earlier.

The process of registering a company in the Philippines usually takes 4-5 weeks.

Emerhub’s local business advisors will gather all the required documents, advise you on the most suitable legal entity based on your goals, and handle the entire registration process on your behalf.

2. Obtain the BIR Registration and Mandatory Local Government Permits

To ensure compliance with local regulations, you will need to register with the Bureau of Internal Revenue (BIR) for tax compliance and obtain several licenses and permits from the local government unit (LGU).

For opening a resort, hotel, or guest house in the Philippines, you will need the following licenses and permit:

• Business Permit (Mayor’s Permit): Allows your business to legally operate within the local government unit (LGU) where it is located.
• Zoning Clearance: This ensures that your business is located in an area zoned for commercial activities.
• Building Permit: This permit is obtained before construction, renovation, or demolition of your building from Building Official (BO).
• Fire Safety Inspection Certificate: This certificate verifies that your establishment meets the necessary fire safety standards, ensuring the safety of guests.
• Sanitary Permit: This permit demonstrates that your resort or hotel meets the sanitation and hygiene standards.
• Accreditation from the Department of Tourism (DOT): DOT accreditation certifies that your establishment meets the minimum requirements for operating a tourism facility.

Our local experts will help you obtain the necessary licenses and permits so you can start your business in compliance with local laws.

3. Secure the Environmental Compliance Certificate

Before your hospitality business can operate in the Philippines, it also needs to acquire an Environmental Compliance Certificate (ECC).

An ECC is necessary for certifying that your business activities will not cause any negative effect on the environment. In general, the Department of Environment and Natural Resources and the Environmental Management Bureau will issue the certificate within 30 working days.

There is a list of requirements on what you need to provide when applying for an ECC, including:

• Project description
• Environmental impact and management plan
• Geotagged photographs of the project site
• Affidavit of no complaint

Once everything is ready, now it is time to open your resort for public and start receiving guests.

Start Your Resort or Hotel Business in the Philippines with Emerhub

Ready to open your resort or hotel in the Philippines? Emerhub’s business advisors understand the local regulations and will handle the entire process on your behalf.

From company registration in the Philippines to obtaining all the licenses and permits, our local experts will assist you throughout the process.

Fill out the form below and we will put you in touch with one of our experts in the Philippines.