Starting a consultancy business in the Philippines is fundamentally different from opening a standard trading or manufacturing company. While a trading firm deals with physical inventory and customs, a consultancy’s primary "asset" is intellectual property and human capital.
This makes the purpose of your business the most scrutinized part of your registration. If the scope of your business consultancy is too broad, you risk accidentally triggering professional licensing laws. However, if it's too narrow, you might find yourself unable to expand your services without a costly and lengthy amendment to your corporate papers.
Setting up a consultancy business in the Philippines can be challenging for those who are unfamiliar with the regulations. Here’s a guide describing the legalities to set up your consultancy business in the Philippines with Emerhub.
Understanding the Consultancy Landscape in the Philippines
A consultancy firm is a business composed of experts who provide professional feedback and specialized solutions to organizations in exchange for a fee. Unlike a typical service provider that might execute a repetitive task, a consultancy focuses on diagnosing problems, providing strategic roadmaps, and offering high-level advisory to help a client achieve a specific goal or improve their performance.
For example, you can offer services like management strategy, IT optimization, digital transformation, and operational efficiency as an IT consulting firm. Your business provides advice and technical insight to both your local and multinational clients.
Common Sectors for Consulting Firms in the Philippines
In the Philippines, consulting covers a wide range of fields. Here are some of the most common consulting services with corresponding Business Classification (PSIC) Code:
| Sector | PSIC Class Code | Description | Notes/Subclasses |
|---|---|---|---|
| Management and strategy consulting | 7020 (70200) | Management consultancy activities, including strategic planning, organizational restructuring, and operational improvement advice. | Excludes legal, accounting, engineering, advertising. |
| IT and technology consulting | 6202 (62020) | Computer consultancy, system design, cybersecurity, digital transformation, and facilities management. | Covers implementation and support services. |
| HR and recruitment consulting | 7810 | Employment placement agencies, including talent acquisition, workforce planning, and labor recruitment. | Subclasses: 78101 (local recruitment), 78102 (overseas), 78103 (online), 78109 (other). |
| Financial and accounting consulting | 6920 | Accounting, bookkeeping, auditing, and tax consultancy, including financial modeling and advisory. | Covers tax advisory and audit support. |
| Legal consulting | 6910 (69100) | Legal activities, advice, and representation (requires Philippine Bar license for practice). | General counseling and document preparation. |
| Marketing and communications consulting | 7310 | Advertising services, including brand strategy, PR, digital marketing, and market consulting. | Full-range advice and planning. |
| Environmental and engineering consulting | 7110 | Architectural, engineering, and technical consultancy, including environmental compliance and project feasibility. | Subclasses: 71101 (environmental engineering), 71102 (other engineering). |
If you have deep expertise in any of these areas, a consultancy structure lets you offer that expertise as a service and bill for it legally.
Commercial Consulting in Regulated Professions
The Philippines has an additional regulatory layer if you provide consulting services for regulated fields. Professional services such as accountancy, engineering, law, or medicine require licensure from the Professional Regulation Commission (PRC). The agency oversees 46 professional regulatory boards and protects public interests through exams, renewals, and ethical standards.
In other words, regulated consulting demands PRC-licensed individuals and often professional partnerships. Foreigners who want to start a consulting business in these regulated professions face restrictions under the Foreign Investment Negative List (FINL) which we discuss more below.
Can Foreigners Own a Consulting Business in the Philippines?
General consulting (whether management, IT, HR, marketing, or strategy) are open to 100% foreign ownership. This means a foreign national or foreign corporation can own the entirety of a consulting firm in the Philippines without needing a Filipino co-owner. However, there are some caveats.
Ownership Restrictions in Regulated Fields
Foreigners cannot independently open a consulting business in regulated fields in the Philippines. Regulated professions require PRC licensure, which demands Filipino citizenship or strict reciprocity (your home country must grant Filipinos equal practice rights). Furthermore, you need to pass local exams or obtain temporary special permits for limited roles such as project-based consulting, feasibility studies, or government contracts.
Consulting firms in regulated professions are subject to foreign ownership restrictions. This means majority shareholders must be Filipino, with licensed locals leading the practice. Temporary PRC special permits allow advisory roles (e.g., design review or supervision) but not full independent operations, subject to oaths, reporting, and penalties for violations.
Financial Requirements for Foreign Ownership
If you’re opening a consulting firm in the unregulated fields, keep in mind that there are financial requirements to attain 100% foreign equity. These requirements can depend on your target market:
- Domestic (i.e. targeting Filipino clients): The minimum paid-up capital for a foreign-owned company is USD 200,000. This threshold can be reduced to USD 100,000 if your company employs at least 50 direct Filipino employees or uses advanced technology, as determined by the DOST.
- Export Oriented (i.e. your clients are overseas): At least 70% of your output or revenue comes from foreign clients, the minimum capital requirement is lower or waived outright (for foreign-owned Export Market Enterprise). Furthermore, you can also get additional incentives through the Board of Investments (BOI) or PEZA.
If you’re not sure which pathway to take,our local experts in the Philippines can advise the best structure for your business. Reach out via the form below for a free consultation.
Choosing the Right Business Structure for a Consulting Company
Before you start the incorporation process, you need to decide what type of legal entity your consulting business will be. The structure you choose affects how you are taxed, how much liability you carry, and how much capital needed.
| Business Structure | What it is | Who is it ideal for? |
|---|---|---|
| Sole Proprietorship | A business owned by one individual with no separate legal personality from the owner. Registered with the DTI. | Filipino citizens starting a small, low-risk local practice with minimal overhead. |
| One Person Corporation (OPC) | A corporation with a single stockholder who also acts as the sole Director and President. Offers limited liability. | Solo foreign or local consultants who want full control while protecting their personal assets from business risks. |
| Domestic Corporation | A traditional corporate structure requiring at least two (2) incorporators. Managed by a Board of Directors. | Partnerships or agencies planning to scale, hire a large team, or eventually bring in outside investors. |
| Branch Office | An extension of a foreign head office. It carries out the business of the parent company in the Philippines. | Established international firms wanting to maintain their global brand and legal identity while operating locally. |
Read our guide on legal entities you can establish as a foreigner in the Philippines. If you are unsure, feel free to fill out the form to talk to one of our local compliance experts in the country.
How to Incorporate Your Consultancy Business in the Philippines
Emberhub’s business registration and corporate compliance services can help you incorporate your consultancy company in the Philippines. While you focus on growing your business, our team of local experts compliantly handles all the company registration paperwork, so you don’t have to.
Here is how our local experts can help you set up your business:
- Register with the SEC or DTI: Our team manages the entire eSPARC application for you. We focus heavily on drafting your "Primary Purpose" to ensure it clearly states you are providing consulting and not practicing a regulated profession. We also handle your mandatory beneficial ownership declaration through the HARBOR system, ensuring your company remains compliant with the latest anti-money laundering regulations from day one.
- Obtain a Business Permit from the Local Government Unit (LGU): Once the SEC certificate is issued, you need a permit from the city where your office is located. Emerhub bridges the gap between the SEC and the LGU by processing your local clearances on your behalf. This involves:
- Barangay Clearance: We secure this local neighborhood clearance first.
- Mayor’s (Business) Permit: The city will inspect your office for fire safety, zoning, and sanitary standards. If you don't have a physical space yet, Emerhub provides compliant Virtual Office solutions in prime business districts like Makati and BGC that meet LGU requirements for registration. We represent you during inspections to ensure your consultancy meets all local ordinances.
- Register with the Bureau of Internal Revenue (BIR): Our tax specialists handle your BIR application to secure your Tax Identification Number (TIN) and Authority to Print (ATP) invoices. We set up your manual or digital books for you, ensuring you are ready to issue legal, compliant receipts to your clients immediately.
- Register with Social Security Institutions: Even if you are the only employee in an OPC, your company is legally an employer. Emerhub registers your business with the SSS, PhilHealth, and Pag-IBIG to ensure full social compliance.
- Open a Corporate Bank Account. Part of our end-to-end incorporation process is to help you open a local bank account. We will submit all the needed requirements and help you with KYC (Know-your-Customer) compliance to open your corporate account.
Get in touch with our team to discuss how we can support your entry into the Philippine market.
Frequently asked questions
Do I need a professional license to operate a consulting business?
Whether you need a professional license for your consulting business depends on the type of consulting you plan to provide. General management, strategy, HR, IT, and marketing consulting do not require a professional license to operate. However, if your consulting involves regulated professions such as accounting (CPA license required), engineering (PRC license required), or legal advice (Philippine Bar required). You or your key practitioners must hold the appropriate professional credentials. Operating in regulated fields without the proper license can result in legal liability.
What is the difference between a branch office and a subsidiary for a foreign consulting firm?
A branch office is an extension of a foreign parent company and is not a separate legal entity. It can earn revenue in the Philippines, but the parent company carries full legal liability for its operations. Assigned capital of at least USD 200,000 is typically required. A subsidiary (domestic corporation) is a separate Philippine-incorporated entity. It can have the same foreign parent as a major shareholder, but it operates as its own legal entity and is taxed independently. Subsidiaries are generally preferred for long-term operations because they offer more structural flexibility and better liability protection.
How long does it take to fully set up a consulting business in the Philippines?
From the time you begin the SEC application to the completion of all registrations (BIR, LGU, social institutions, and bank account), the process typically takes 4 to 8 weeks, assuming documents are complete and in order. Processing times vary by LGU and by how quickly signatories are available to sign documents. Working with Emerhub can help streamline the process.
What taxes does a consulting company pay in the Philippines?
A consulting company pays Corporate Income Tax at a standard rate of 25% (or 20% for MSMEs with net income ≤ PHP5M and assets ≤ PHP100M). If annual gross sales exceed PHP3 million, the company must collect and remit 12% VAT; otherwise, a 3% Percentage Tax applies. Additionally, clients typically withhold Expanded Withholding Tax (EWT) on consulting fees (usually at 10% or 15% for professional services) which the firm can then use as a tax credit against its final income tax. You can consult with our local compliance experts about tax and accounting for more information on your tax obligations as a consulting firm.
Is it required to have a physical office to register a consulting business?
You need a registered business address within the LGU's jurisdiction to obtain the Mayor’s permit.This does not have to be a large office space. Many consulting firms use a virtual office arrangement, which provides a legitimate registered address for permit and registration purposes without the overhead of a full-time physical space. Emerhub offers virtual office solutions in Manila that satisfy LGU requirements.