How to Expand Your Business in the Philippines – 2025

Tax Incentives for Eligible Businesses in the Philippines

The Philippine government actively promotes foreign investments in key development sectors by offering attractive tax incentive programs. Eligible enterprises can benefit from special tax breaks, exemptions, and reduced tariffs, making it cost-effective to operate in the country.

Additionally, foreign investors and their employees can enjoy exclusive privileges, such as multiple-entry special visas, simplifying international mobility. Government agencies are dedicated to supporting investors by ensuring a smooth process and providing unparalleled advantages for businesses looking to thrive in the Philippines.

The following government agencies provide tax incentive schemes to eligible enterprises:

• Philippine Economic Zone Authority (PEZA)
• Board of Investments (BOI)
• Cagayan Economic Zone Authority (CEZA)
• Tourism Infrastructure and Enterprise Zone Authority (TIEZA)

Foreign Ownership Rules and Restrictions in the Philippines

While foreign nationals can establish businesses in the Philippines, there are specific rules governing foreign ownership. Key points to consider include:

• General Ownership Limit: Foreigners can own up to 40% of a business in sectors restricted by the Foreign Investment Negative List.
• 100% Foreign Ownership: In specific industries such as export-oriented businesses or technology startups, foreign ownership may be allowed at 100% with a minimum capital investment.
• Capital Requirements: A minimum paid-in capital of US$200,000 is required for foreign ownership, but this can be reduced for export-oriented businesses.

For more information, visit: Foreign Investments Act of 1991 (Republic Act No. 7042), along with the Foreign Investment Negative List.

Legal and Regulatory Requirements for Expanding Business in the Philippines

A crucial aspect of successfully expanding and establishing your business operations in the Philippines is ensuring full compliance with all legal, regulatory, and administrative requirements mandated by the government.

This involves meticulously adhering to various laws, securing the necessary permits and licenses, and fulfilling specific obligations. The following are the essential requirements that must be met to ensure compliance before commencing operations in the Philippines:

1. Registering the Business. The first step is registering your business name with the Securities and Exchange Commission (SEC). Afterward, you must secure the necessary local government permits, including a Barangay Clearance and a Mayor’s Permit. Once these requirements are fulfilled, you can proceed with registering your business with the Bureau of Internal Revenue (BIR).
2. Register Employees. When you decide to hire employees for your business, it is mandatory to register them with the Social Security System (SSS), the Home Development Mutual Fund (Pag-IBIG), and PhilHealth to ensure their access to essential social benefits and protections.
3. Open a Corporate Bank Account. Opening a corporate bank account is a critical step in establishing your business’s financial foundation. This account not only ensures a clear separation between your personal and business finances but also facilitates efficient management of your company’s cash flow.
4. Acquiring Office Space. Businesses often rent office spaces or commercial premises to establish their operations. When renting, it is imperative to secure a duly executed Contract of Lease to formalize the arrangement. Furthermore, depending on the specific industry or nature of the business, additional permits may be required.
5. Visa and Employment Prerequisites for Foreign Nationals. Foreign nationals who wish to work in the Philippines, whether as employees or in managing their business ventures, must secure the appropriate working visa to comply with legal requirements.