Registering a Company in the Philippines as a Foreigner: SEC, OPC and the 40% Rule

Registering a company in the Philippines as a foreigner is less mysterious than its reputation. The Securities and Exchange Commission runs the registration online, the Revised Corporation Code lets one person own a whole corporation, and the Foreign Investments Act allows full foreign ownership in most activities. The catch sits in three numbers: 40 percent, US$200,000 and the list of activities reserved to Filipinos. Get those right before you file and the rest is paperwork.

Which structure you need in the first place (an offshore company, a zone company, or no company at all) is a separate decision, set out on our page on company structures in the Philippines. The mechanics are a second question: how a Philippine company comes into existence when the owner is not Filipino.

Can a foreigner own a company in the Philippines?

Yes. Since the amendment of the Foreign Investments Act by Republic Act No. 11647 in 2022, a non-Philippine national may, without prior approval, register with the SEC and invest in a domestic enterprise "up to one hundred percent (100%) of its capital", unless a law or the negative list caps foreign participation lower. The same section tells the SEC not to add ownership limits of its own and to register a complete application within fifteen days.

The original Foreign Investments Act of 1991 defines who counts as Filipino for this purpose: a corporation is a "Philippine national" when at least 60 percent of its voting capital is held by Philippine citizens. Everything else is foreign-owned in the eyes of the law, which is why you will hear Philippine lawyers talk about "60/40" all the time. A company that is 60 percent Filipino can do almost anything a Filipino can. A company that is more than 40 percent foreign has to check two things: the negative list and the capital floor.

The negative list: what stays Filipino

The Foreign Investment Negative List is the official list of activities that are closed to foreigners or capped. The current one is the 13th Regular Foreign Investment Negative List, promulgated by Executive Order No. 113, signed on 13 April 2026. It replaced the 12th list from Executive Order No. 175 of 2022, so any guide that still quotes EO 175 as the current list is out of date.

The list has two parts. List A holds restrictions that come from the Constitution and specific laws and changes whenever those laws change. List B holds restrictions for reasons of security, defence, health and the protection of small businesses, and may be amended at most once every two years.

Some List A limits come straight from the 1987 Constitution, and they matter for ordinary business plans:

• •Mass media must be wholly owned and managed by Filipinos.
• •Private land can only be transferred to those who may hold public land, which for a company means at least 60 percent Filipino ownership. A foreign-owned company can rent or lease, but it cannot hold land. Our guide on buying property in the Philippines as a foreigner explains what that leaves you.
• •Natural resources (exploration, development and use) are open only to corporations at least 60 percent Filipino-owned, apart from agreements the Constitution allows the President to make.

Retail trade has its own statute. Under Republic Act No. 11595, a foreign retailer needs a minimum paid-up capital of PHP 25 million, and PHP 10 million per store when it runs more than one physical store, and its home country must not bar Filipino retailers. The licensed professions are a separate matter again: they are regulated by their own laws, and the Revised Corporation Code does not let licensed professionals incorporate to practise their profession unless a special law allows it.

If your activity is not on either list, foreign ownership up to 100 percent is allowed. Read the list for your exact activity before anything else; it decides whether you can hold all the shares or need Filipino partners.

The US$200,000 rule and its exceptions

This is the number that surprises most first-time founders. The Revised Corporation Code says plainly that no minimum capital stock is required. But the Foreign Investments Act, as amended by RA 11647, reserves to Filipinos every micro and small domestic market enterprise with paid-in equity capital below US$200,000. In practice: if your Philippine company is more than 40 percent foreign-owned and sells into the Philippine market, it needs at least US$200,000 in paid-in capital.

The same section lowers the floor to US$100,000 in three cases:

• •the business involves advanced technology as determined by the Department of Science and Technology;
• •it is endorsed as a startup or startup enabler by the lead host agencies under the Innovative Startup Act (RA 11337); or
• •a majority of its direct employees are Filipinos, and never fewer than fifteen.

Export enterprises are treated differently. Under the amended Act, foreign investment in an export enterprise whose products and services are not on the negative list is allowed up to 100 percent, and the capital floor for small domestic market enterprises does not apply to it. The original Act describes how a domestic market enterprise becomes an export enterprise: by exporting 60 percent or more of its output each year over three years. Export enterprises register with the Board of Investments and report on their export ratio; one that falls short can be ordered to cut its local sales.

For a freelancer or consultant whose clients are all abroad, that distinction is the whole game. Selling services to foreign clients from Davao is a different legal position from opening a café for local customers.

Which vehicle: corporation, OPC, branch or sole proprietorship

The Revised Corporation Code of 2019 (RA 11232) gives you four realistic options.

A stock corporation. Up to fifteen incorporators, each owning at least one share. The corporation exists perpetually unless its articles say otherwise, and its principal office must be in the Philippines. After election, the board appoints a president (who must be a director), a treasurer who must be a resident and a corporate secretary who must be a Philippine citizen and resident. The same person may not be president and secretary, or president and treasurer, at the same time. A foreign founder therefore needs at least one Filipino resident on board as secretary.

A One Person Corporation (OPC). The Code allows a corporation with a single stockholder, who must be a natural person, a trust or an estate. As a foreigner you can form one, subject to the same negative list and capital rules as any foreign-owned company. The single stockholder is automatically the sole director and president, the name must carry "OPC", and no bylaws are needed. Within fifteen days of incorporation the OPC must appoint a treasurer and a corporate secretary, and the stockholder may not be the secretary. If you appoint yourself treasurer, you post a bond with the SEC, renewed every two years. The articles must name a nominee and an alternate nominee who take over if you die or become incapacitated. Banks, insurers, pre-need and trust companies and public companies may not be OPCs, nor may a licensed professional for the practice of the profession.

A branch or representative office of a foreign company. Instead of a new Philippine company, your existing foreign company can apply to the SEC for a licence to do business under sections 140 to 142 of the Code, submitting its articles and bylaws. A branch counts as foreign-owned, so the negative list and the capital rules apply to it in the same way.

A sole proprietorship. RA 11647 sends single proprietorships to the Department of Trade and Industry instead of the SEC. For a foreigner, the same capital floor applies to a sole proprietorship selling into the domestic market, and a sole proprietorship gives no separation between you and the business. Most foreign founders therefore end up with a corporation or an OPC.

How registration works, step by step

• •Check the activity against the 13th negative list and decide on the ownership split and capital.
• •Reserve the name and file online. The SEC's eSPARC portal handles domestic corporations, partnerships and foreign corporations. Under its newer processing routes, incorporators and resident agents create an eSECURE account, verify their identity, and sign the documents digitally from anywhere, without paper signatures. The SEC then issues a digitally signed certificate of incorporation.
• •Pay in the capital. For a foreign-owned domestic market company, the law speaks of paid-in capital, so the US$200,000 or US$100,000 has to be paid in, not merely subscribed. The Foreign Investments Act defines a foreign investment as foreign exchange or other assets actually transferred to the Philippines, so the money normally arrives through a Philippine bank, which is why the bank relationship matters early. Our guide to opening a bank account in the Philippines covers what banks ask for.
• •Register with the BIR. The Ease of Paying Taxes Act (RA 11976) amended the Tax Code so that every taxpayer registers once, electronically or manually, on or before the commencement of business. The SEC portal itself points to the Philippine Business Hub, where a newly registered company applies for its TIN and its employer numbers with SSS, Pag-IBIG and PhilHealth.
• •Get the local business permit. The city or municipality where your office sits issues the business permit, usually called the Mayor's Permit. The Ease of Doing Business Act caps processing at three working days for simple and seven for complex applications, and twenty for highly technical ones.

What it costs to run afterwards

Formation is the quick part. The running duties are what most foreign founders underestimate.

• •Corporate income tax. Under the CREATE Act, a domestic corporation pays 25 percent, or 20 percent if its net taxable income is no more than PHP 5 million and its total assets, excluding the land under its office or plant, no more than PHP 100 million. Remember that the company is taxed on its own income; your personal position as a resident alien is a separate matter, explained in our guide to Philippine tax residency.
• •VAT. Under the TRAIN law, sales or receipts up to PHP 3 million a year are exempt from VAT; above that threshold the business registers for VAT.
• •SEC reports. Every corporation files audited financial statements and a general information sheet each year (section 177 of the Code). Below PHP 600,000 in total assets or liabilities, the treasurer may certify the statements under oath instead of an auditor. The SEC can put a company that misses its reports three times within five years on delinquent status.
• •Annual permit renewal with the city, and payroll contributions once you employ staff.

Incentives: BOI, PEZA and the 5 percent rate

A company that registers its project with the Board of Investments or another investment promotion agency (such as PEZA for economic zones) can receive tax incentives. Under CREATE, export enterprises and critical domestic projects in the Strategic Investment Priority Plan receive an income tax holiday of four to seven years, followed by ten years of either the 5 percent special corporate income tax on gross income, in place of national and local taxes, or enhanced deductions. CREATE MORE (RA 12066) of 2024 set the corporate rate under the enhanced deductions regime at 20 percent. Incentives belong to registered activities, not to the company as such, and each comes with conditions and reporting.

The visa question nobody should skip

Owning a Philippine company does not give you the right to work in it. As a director or employee of your own company you still need work status, which for most people means a work visa sponsored by the company. Holders of the PRA's retirement visa are a special case: the Philippine Retirement Authority lists exemption from "separate work/student visa or permits" among its benefits. If what you really want is legal work status rather than a company of your own, the 9G work visa through an Employer of Record is often the lighter path.

Two more points before you file. First, the home-country side: moving shares, running a foreign company from Davao or setting up a new structure can trigger exit taxes and management-place questions in the country you left. Second, consistency: your articles, your visa, your invoices and your BIR registration must tell the same story. If you want both sides checked together before anything is registered, a consultation is the place to start.