Types of legal entities in the Philippines
Every way a foreign company can set up in the Philippines, from a fully owned corporation to a branch or a liaison office. We check what your activity allows, recommend the structure that fits, and register it for you.
Choosing a structure in the Philippines
The right entity comes down to three questions. Do you want a Philippine company of your own, or an extension of the company you already have abroad? How much of it can a foreigner own, given what the business will do? And how much liability and capital are you prepared to put behind it?
Companies and partnerships register with the Securities and Exchange Commission; sole proprietorships register with the Department of Trade and Industry. The structures below are grouped by who they suit, the ones foreign investors actually use first, then the forms that mostly serve Filipino owners.
Compare business structures in the Philippines
The vehicles a foreign investor actually chooses between.
| Structure | Best for | Foreign ownership | Liability | Minimum capital | Registered with |
|---|---|---|---|---|---|
| Domestic corporation | A local subsidiary that can do anything a Filipino company can | Up to 100%, if the activity is not on the FINL | Limited | USD 200,000 * | SEC |
| One Person Corporation | A single owner who wants limited liability | Up to 100%, if the activity is not on the FINL | Limited | USD 200,000 * | SEC |
| Branch office | Running the parent’s business in the Philippines | Extension of the parent | Parent is liable | USD 200,000 * | SEC |
| Representative office | Liaison and promotion, no local income | Extension of the parent | Parent is liable | USD 30,000 / year | SEC |
| Regional HQ (RHQ) | Coordinating a group’s Asia-Pacific affiliates | Extension of the parent | Parent is liable | USD 50,000 / year | SEC + BOI |
| Regional operating HQ (ROHQ) | Billing services to a group’s own affiliates | Extension of the parent | Parent is liable | USD 200,000 | SEC + BOI |
| Sole proprietorship | A single Filipino owner, smallest businesses | Filipinos in practice | Unlimited | No set minimum | DTI |
| Partnership | Two or more partners, often professionals | Per the FINL | Unlimited (general partners) | No set minimum | SEC |
* USD 200,000 applies to a foreign-owned business serving the local market. It can fall to USD 100,000, or not apply at all, in the cases set out under Foreign ownership rules.
Entity types for foreign investors
These are the vehicles foreign companies and founders actually use. The first question is whether you want a Philippine company of your own, or to operate as an extension of the company you already have abroad.
Your own Philippine company
Domestic corporation
A separate Philippine company with limited liability, up to 100 percent foreign-owned where the activity is open. The standard vehicle for a foreign business that wants a real local presence.
Company registrationOne Person Corporation
A corporation with a single stockholder, so one foreigner can own and run it outright, with limited liability and no co-shareholders. The same foreign capital rules still apply.
OPC guideAn extension of your foreign company
Branch office
Your foreign company operating here directly, in the same line of business and able to earn income. Not a separate entity, so the parent stays liable, and profits sent home carry a remittance tax.
Branch office guideRepresentative office
A liaison office for marketing, information, and quality control. It cannot earn income or sign local contracts, and the parent funds it with USD 30,000 a year.
Representative office guideRegional headquarters (RHQ)
An administrative and coordination center for a group’s Asia-Pacific affiliates. It earns no income here and pays no income tax, on USD 50,000 a year from the parent.
RHQ guideRegional operating headquarters (ROHQ)
Earns income by serving the group’s own affiliates only. Since the CREATE Act it is taxed at the regular 25 percent, having lost the preferential rate it once had.
ROHQ guideEntity types for local owners
Two simpler forms round out the picture. They mostly suit Filipino owners, since a foreigner can rarely use them, but they are worth knowing when you weigh the options.
Sole proprietorship
One owner, registered with the DTI, with no separation between owner and business, so liability is unlimited. Effectively a Filipino structure, since foreigners rarely qualify.
Talk to our teamPartnership
Two or more partners registered with the SEC. General partners are personally liable; a limited partnership shields limited partners to their contribution. Foreign equity follows the Negative List.
Talk to our teamForeign ownership rules
How much of a Philippine company a foreigner can own depends on what it does. The Foreign Investment Negative List sets out the activities that are closed or capped. Most of the economy sits outside it and is open to full foreign ownership; the activities on it are reserved for Filipinos or limited to 40 percent foreign equity. Recent reforms have shortened the list: the amended Public Service Act opened telecommunications, domestic shipping, railways, airports, and expressways to 100 percent foreign ownership, and the amended Retail Trade Liberalization Act lets foreigners own retail businesses that meet a paid-up capital of PHP 25 million.
Two limits sit outside all of this. Foreigners cannot own land in the Philippines, though they can own a condominium unit and lease land long term. And the Anti-Dummy Law makes it a crime to use a Filipino as a front to hold shares a foreigner controls.
How registration works
The same path for most companies, run for you end to end.
| Stage | What it involves | Typical timing |
|---|---|---|
| Name and SEC registration | Reserve the company name and file the articles through the SEC’s online system, or the DTI for a sole proprietorship | 1–3 weeks |
| Certificate of incorporation | The SEC issues the certificate, or the license to do business for a branch or office | With the above |
| BIR registration | Register for tax, get the company TIN and certificate of registration, and have invoices authorised | 1–2 weeks |
| Local business permits | Barangay clearance and the mayor’s business permit from the local government | 1–2 weeks |
| Employer registration | Register with the SSS, PhilHealth, and Pag-IBIG once you have staff | About 1 week |
Set up the right structure with Emerhub
One team for the choice, the filing, and everything after.
The right structure
We match the structure to your activity, ownership, and liability, and check it against the Negative List before anything is filed.
Registration, end to end
We register the corporation, OPC, branch, or office with the SEC, then handle the BIR and your local government.
Resident agent and address
For a branch or office, we can act as your resident agent and give you a registered office address in the Philippines.
Ongoing compliance
The annual SEC filings, tax returns, and beneficial ownership reporting your company owes once it is running.
Entity questions
What foreign investors ask before they choose.
Can a foreigner own 100% of a Philippine company?
Yes, wherever the activity is not on the Foreign Investment Negative List, which covers most of the economy. Where the activity is restricted, foreign ownership is capped, usually at 40 percent, with the rest held by Filipinos.
What is the minimum capital for a foreign-owned company?
USD 200,000 in paid-up capital for a business serving the local market. It falls to USD 100,000 if the company uses advanced technology, is an endorsed startup, or employs at least 15 Filipinos, and there is no minimum at all for a company that exports 60 percent or more of its output.
OPC or domestic corporation?
Both are corporations with limited liability and perpetual life. A One Person Corporation has a single owner and lighter governance, with no board or bylaws. A regular domestic corporation suits you if you have, or expect, more than one shareholder. The foreign ownership and capital rules are the same for each.
Branch or subsidiary?
A subsidiary is a separate Philippine company, so the parent is shielded from its liabilities. A branch is the parent operating directly, so the parent is fully liable and is taxed on the branch’s profits, including a remittance tax when profits go home. Most investors choose a subsidiary for the liability protection.
Do I need a Filipino partner?
Only if your activity is restricted under the Negative List. In an open sector you can own the company outright. Using a Filipino to hold shares you actually control in a restricted sector is a dummy arrangement and is illegal, so we structure within the rules instead.
Can a foreigner register a sole proprietorship?
Rarely. A sole proprietorship is treated as a Filipino structure, and a foreigner could only use one in an activity open to foreign ownership that also meets the foreign capital rules, which seldom fits a small business. A corporation is almost always the right route instead.
Are RHQ and ROHQ still worth setting up?
Less than they used to be. An ROHQ lost its 10 percent preferential tax under the CREATE Act and is now taxed at the regular 25 percent, so most groups that once used one now look at a branch or a subsidiary. An RHQ still works as a non-income coordinating office.
How long does registration take?
For a straightforward company, roughly four to eight weeks from name reservation to a working business with its tax registration and local permits in place. The exact timing depends on the structure, the capital, and how quickly documents from abroad are authenticated.
Talk to our Philippines team
Our Manila team checks your activity against the Foreign Investment Negative List, recommends the structure that fits, and registers it with the SEC, the BIR, and your local government. Tell us what you plan to do in the Philippines and we will set it up.
2 26th St, Taguig
1634 Metro Manila, Philippines