Domestic Corporation Registration
The most popular legal entity type with foreign investors in the Philippines is the domestic corporation. It is possible to have full foreign ownership for this type of legal entity depending on the industry in which your business will operate.
A domestic corporation’s shareholder can be any of the following:
Foreign Ownership for Domestic Corporations
A domestic corporation must have 2 to 15 directors or shareholders.
Most business lines allow foreign ownership. Some industries that allow 100% foreign ownership include:
- Internet businesses
- Wellness centers
- Teaching in higher education or outside the formal education system
- Lending companies
- Financing companies
- Investment houses
- Service sector businesses
However, there are regulations for the allowed percentage of foreign ownership for some business lines per the Foreign Investment Negative List. The allowed percentage of foreign ownership varies depending on the industry.
Minimum capital requirements for domestic corporations in the Philippines
The minimum capital requirement for a domestic corporation with over 40% of foreign ownership is USD 200,000.
However, the minimum capital requirement can be just USD 100,000 if your business employs at least 50 Filipino citizens or if it uses advanced technology as approved by the Department of Science and Technology.
The minimum capital requirement is only PHP 5,000 (approx. USD 100) if your business meets the following criteria:
- The percentage of local ownership is at least 60%
- Your business exports 70% of its products
Registering a Domestic Corporation in the Philippines
The registration of a domestic corporation in the Philippines involves submitting and securing documents from different government agencies.
Emerhub will handle the process of acquiring the following documents:
- Certificate of Registration with the Securities and Exchange Commission
- Mayor’s permit from the relevant local government
- Certificate of Registration with the Bureau of Internal Revenue
At the same time, we will register your employees with the Social Security System, the national health insurance system, and the Home Development Fund.
Emerhub is able to complete the entire incorporation process for a domestic corporation in the Philippines within 4 to 6 weeks.
Corporate Structure of a Domestic Corporation
All corporations in the Philippines must have the corporate officers listed below. The appointment of the officers must happen within 15 days from incorporation. Emerhub will notify the Securities and Exchange Commission of the appointment within the mandated timeframe.
The corporation’s president acts as the signatory of the organization. He or she does not have to be a resident of the Philippines. However, he or she must be a director and a shareholder of the corporation.
The corporate secretary is in charge of administrative and informative work as well as safekeeping and preserving records, documents, and minutes of all meetings. The corporate secretary has to be a citizen of the Philippines. Of the required corporate officers, this is the only position that requires a Filipino citizen.
The corporation’s treasurer is in charge of the entity’s financial matters including annual statements, financial reports, funds, and other valuable effects belonging to the corporation. He or she does not have to be a Filipino citizen but must be a resident of the country.