An Ultimate Guide to Business Registration in the Philippines

Setting up a business in the Philippines can be straightforward with the right guidance. This guide leads entrepreneurs and foreign investors through each step, from choosing a structure to securing national and local permits. It covers OPCs, Domestic Corporations, and foreign-owned entities such as Branch Offices and Regional Headquarters.

You will also find practical checklists, timelines, and tips for opening a corporate bank account, registering with PEZA or BOI, and maintaining year-round compliance to keep operations running smoothly.

• Why Do Business in the Philippines
• Central Business District (CBD)
• One Person Corporation (OPC)
• PEZA Registration Guide
• BOI Registration Guide
• Setting Up a Domestic Corporation
• Establishing a Regional Headquarters (RHQ)
• Setting Up a Representative Office
• Establishing a Regional Operating Headquarters (ROHQ)
• Setting Up a Branch Office
• Opening a Corporate Bank Account
• Annual Renewals and Ongoing Compliance
• Frequently Asked Questions

Why Do Business in the Philippines

The Philippines offers a dynamic and compelling environment for international businesses seeking growth and a strategic foothold in Southeast Asia. Discover the key advantages that make it a premier destination for investment and expansion.

• Access a Young and Skilled Workforce: Leverage a large, English-proficient talent pool known for its strong work ethic and technical skills.
• Capitalize on a Strategic Location: Use the country as a gateway to the ASEAN market and major Asia-Pacific trade routes.
• Benefit from Competitive Operating Costs: Reduce overhead with favorable labor costs and operational expenses compared to other regional hubs.
• Tap into a World-Class BPO/IT Ecosystem: Integrate with a mature and globally recognized industry for outsourcing and shared services.
• Leverage Government Incentives: Maximize returns through tax holidays and other benefits offered by PEZA and the Board of Investments (BOI).
• Connect with a Booming Consumer Market: Engage with a rapidly growing middle class and a thriving e-commerce landscape.
• Benefit from Supportive Reforms: Take advantage of simplified business registration and liberalized foreign ownership laws in key sectors.

What is a Central Business District (CBD)?

A Central Business District (CBD) is a city’s commercial core, concentrated with offices, retail, finance, and cultural landmarks. Highly accessible and transit-connected, it serves as the main hub for economic and social activity.

• CBD Locations in the Philippines
  • Makati
  • Bonifacio Global City (Taguig)
  • Ortigas Center (Pasig/Mandaluyong/Quezon City)
  • Bay City / MOA Complex (Pasay/Parañaque)
  • Alabang (Muntinlupa)
  • Quezon City: Eastwood City, Triangle Park
  • Cebu: Cebu Business Park, IT Park
  • Clark Freeport Zone (Pampanga)
  • Iloilo Business Park
  • Davao City: Poblacion District, Lanang Business District
  • Bacolod City: Lacson Corridor, Capitol Central District
  • Subic Bay Freeport Zone (Zambales)

What is a One Person Corporation (OPC)?

A One Person Corporation (OPC) in the Philippines is a simplified corporate structure that requires only one stockholder, who will also serve as the sole director and president. It’s widely used by startups, consultants, and professionals seeking limited liability. There is no minimum capital requirement unless mandated by a specific industry.

For continuity, a nominee and an alternate nominee must be designated. OPCs are also required to file an annual General Information Sheet (GIS) and Audited Financial Statements.

Registration Steps:

1. Name Reservation: SEC Express System online.
2. Documentation: Prepare Articles of Incorporation, By-laws, and Treasurer’s Affidavit (as the incorporator and treasurer-in-trust).
3. SEC Registration: Submit documents through the SEC Company Registration System.
4. Obtain Certificates: Receive Certificate of Incorporation and Bylaws approval.
5. Proceed with LGU and BIR Registration: As detailed in later sections.

Registration with Philippine Economic Zone Authority (PEZA)

PEZA provides tax and non-tax incentives to export-oriented manufacturers and service providers including IT and BPO firms operating in registered economic zones. To qualify, a company must be located in a PEZA-registered IT park or economic zone and export at least 70% of its output if classified as an export enterprise.

Key incentives include an Income Tax Holiday for four to seven years, followed by a five percent tax on Gross Income Earned in lieu of all national and local taxes, duty and VAT-free importation of capital equipment and raw materials, and VAT zero-rating on eligible sales.

Application Steps:

• Submit an application form and supporting project documents to PEZA.
• Present the project to the PEZA board for approval.
• Once approved, sign a Registration Agreement with PEZA.

Registration with the Board of Investments (BOI)

The Board of Investments (BOI) provides incentives to businesses in strategic industries listed in the Strategic Investment Priority Plan and, unlike PEZA, BOI-registered companies can locate anywhere in the Philippines.

To qualify, projects must fall under preferred activities in the current SIPP, which commonly include manufacturing, agriculture, healthcare, research and development, and strategic services.

• Key Incentives:
  • Income Tax Holiday (ITH) for 4 to 7 years.
  • Duty-free importation of capital equipment (for a limited period).
  • Employment of foreign nationals in supervisory or technical positions.
• Application Steps:
  • File a BOI Application Form 501 along with a comprehensive project report.
  • The application is evaluated based on its contribution to the national economy.
  • Upon approval, a Certificate of Registration is issued.

Setting Up a Domestic Corporation

A domestic corporation is a legal entity formed under Philippine law with a personality separate from its owners and is the most common structure for medium to large businesses.

It must have at least two and no more than fifteen incorporators with a majority being Philippine residents, define its authorized, subscribed, and paid-up capital with at least 25% of authorized capital subscribed and 25% of the subscribed amount paid up, observe a minimum paid-up capital of PHP 5,000 unless a higher industry requirement applies, and file Articles of Incorporation and By-Laws.

• Requirements:
  • Incorporators: At least two but not more than fifteen individuals. A majority must be residents of the Philippines.
  • Share Structure: Must define the authorized capital stock, subscribed capital, and paid-up capital. A minimum of 25% of the authorized capital must be subscribed, and 25% of the subscribed capital must be paid up. The minimum paid-up capital is PHP 5,000, unless a higher amount is required by law for specific industries.
  • Documents: Articles of Incorporation and By-Laws.
• Application Steps:
  • Reserve the corporate name through the SEC eSPARC portal.
  • Draft and finalize the Articles of Incorporation and By-Laws.
  • Submit all documents online, including a Treasurer-in-Trust for-Us (TITFU) certificate for cash contributions.
  • Pay filing fees and receive the Certificate of Incorporation.

Establishing a Regional Headquarters (RHQ)

A Regional Headquarters (RHQ) is an administrative branch of a multinational company that coordinates and communicates with its subsidiaries and affiliates across the Asia-Pacific region, operates strictly in a supervisory role, and is not allowed to generate income in the Philippines or engage in any commercial activity.

• Capital Requirement: A one-time inward remittance of at least US$50,000 is required to cover its operating expenses.
• Allowable Activities: General administration, business planning, marketing control, sourcing of raw materials, R&D, and technical support.

Setting Up a Representative Office

A Representative Office, also called a liaison office, is established by a single foreign parent company and functions similarly to a Regional Headquarters but on behalf of that one parent. It is fully subsidized, does not generate revenue in the Philippines, and limits its activities to promoting the parent’s products, conducting market research, and serving as a communication channel.

• Capital Requirement: An initial inward remittance of at least US$30,000 is required for annual operating expenses.
• Allowable Activities: A Representative Office may promote the parent company’s products and services, conduct market research and feasibility studies, act as a communication and coordination channel between the parent company and local contacts, provide quality control, information dissemination, and product knowledge support related to the parent’s offerings, and liaise for after-sales service coordination without charging fees locally.
• Taxation & Incentives: ROHQs are subject to a preferential tax rate of 10% on their taxable income. They may also enjoy certain tax and duty-free importation privileges.

Setting Up a Branch Office

A branch office is an extension of its foreign parent company, not a separate legal entity, so the head office remains liable for its obligations. It operates under Philippine laws and regulations while daily operations align with directives from the head office.

• Capital Requirement: A minimum assigned capital of US$200,000 must be remitted inward. This can be lowered to US$100,000 if the activity involves advanced technology or the company hires at least 50 direct employees.
• Taxation: Subject to regular corporate income tax on its Philippine-sourced income. Profits remitted to the parent company are subject to a branch profit remittance tax.

Opening a Local Corporate Bank Account

When establishing a company in the Philippines, opening a local business bank account is an essential step. When establishing a company in the Philippines, opening a local business bank account is an essential step.

• Common Requirements:
  • SEC Certificate of Registration and Articles of Incorporation/By-Laws.
  • General Information Sheet (GIS).
  • Board Resolution authorizing the opening of the account and designating signatories.
  • Valid IDs of the designated signatories.
  • Proof of business address.
• KYC (Know Your Customer): Banks will conduct due diligence on the corporation and its signatories. For foreign signatories, notarized and authenticated (apostilled) documents are often required.

Renewals and Ongoing Compliance

Maintaining ongoing compliance is essential to safeguard your company’s good standing, prevent costly penalties, and ensure uninterrupted operations. Below are the annual deadlines:

Key Annual Deadlines:

• SEC: Filing of the Audited Financial Statements (AFS) and General Information Sheet (GIS). Deadlines are staggered based on the last digit of the SEC registration number.
• BIR:
  • Annual Registration Fee (Form 0605): Due by January 31.
  • Annual Income Tax Return (Form 1702): Due by April 15.
  • Monthly and quarterly filings for VAT, withholding taxes, etc.
• Local Government Unit (LGU): Renewal of the Mayor’s Permit/Business License. This is a top priority every year and must be completed by January 20 to avoid significant penalties.
• Payroll Compliance: Timely remittance of employee and employer contributions to SSS, PhilHealth, and Pag-IBIG.