Legal entity types in the Philippines
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Legal entity types relevant for foreign investors in the Philippines
Corporation – MOST POPULAR
Conduct activities in the Philippines while benefiting from limited shareholder liability. Can be a domestic corporation or a foreign-owned domestic corporation (≥40% foreign equity)
Branch Office
Extension of a foreign company. Suitable for foreign companies seeking to expand business into the Philippines without forming a separate corporation.
Representative Office
Allows foreign companies to establish a presence in the Philippines without engaging in direct business activities or generating revenue.
One-Person Corporation
Allows a single individual to create a corporation without the need for additional incorporators or shareholders.
Key facts about doing business in The Philippines
| Total population | 119 million (13th in the world) |
| Total GDP | 404.2 billion USD (34th in the world) |
| Ease of doing business ranking | 95th |
| Minimum time to incorporate a company | 2 weeks |
| Main economic hub | Metro Manila |
| Currency | Philippine peso (PHP) |
| Main languages spoken | Filipino |
| English proficiency | 20th, high proficiency |
Annual GDP growth
General overview of the corporate law in the Philippines
Legal framework
The Philippines legal system is based on a mixture of civil law and common law. Foreign investments are generally channeled through domestic or one person corporations, or branch offices.
Most companies start as domestic corporations which is a separate legal entity from its foreign shareholders, and is distinguished as such through Philippine law. 100% foreign ownership is possible for certain types of activities.
Corporate structure
Shareholders
Domestic corporations are typically the most popular for foreign investors. Foreign shares of 100% are possible in many types of industries under Philippine law. If an industry allows 100% foreign ownership, then it is also possible to opt for a one person corporation.
The industry determines the maximum percentage of foreign shares.
Board of Directors
A director handles the day-to-day operations of the business. In the Philippines, a domestic corporation is required to have at least 2 directors. Directors can also be shareholders and there are no restrictions on nationality for directors. They generally only hold the position for 1 year at a time.
President
Corporations in the Philippines must have a president, who is assigned by the board of directors. The president represents the company as the signatory. The president is not required to be a resident of the Philippines.
Corporate Secretary
This type of corporate officer is also required for a Filipino corporation. Contrary to the President, a corporate secretary must be a national of the Philippines. The principal role of the corporate secretary is to ensure compliance.
Treasurer
Corporations in the Philippines must have an assigned treasurer who monitors and handles all financial matters. Residency in the Philippines is a pre-requisite for this role. The president cannot also act as treasurer, except in the case of a one person corporation.
Other legal entity types in the Philippines
Non-stock corporation
Non-profit generating corporation that does not issue shares in the form of stocks to its members. The company activities are limited to non-profitable types, such as charity, education, culture, religion, or similar.
Partnership
Business partnership between 2 or more shareholders. Can be either a general partnership, in which assets and liabilities are fully shared between the partners, or a limited partnership which limits liability to the invested capital.
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