Essential Compliance Requirements for Corporations in the Philippines – Guide 2025

Registering a company is only the first part of doing business in the Philippines. Once the company has been set-up, there are compliances needed to maintain a legitimate business in the Philippines.

Corporations in the Philippines must submit compliance requirements to the agencies that it is also registered with, which usually include the following:

• Securities and Exchange Commission (SEC)
  • SEC Reportorial Requirements
• Bureau of Internal Revenue (BIR)
  • BIR Reportorial Requirements
• Local Government Unit (LGU)
  • LGU Reportorial Requirements
• Employee Welfare Agencies
• Frequently Asked Questions

Securities and Exchange Commission (SEC)

The (SEC) is the government agency responsible for regulating the legal entities and securities industry in the Philippines. It was established under the Securities Regulation Code (Republic Act No. 8799) and has broad powers to enforce securities laws, register securities, and oversee market participants.

SEC Reportorial Requirements

As for the reportorial requirements of corporations regulated by the SEC in the Philippines, these generally include:

1. General Information Sheet (GIS): Corporations are required to submit a GIS annually, which provides updated information about the corporation, including its directors, officers, principal stockholders, and other pertinent details.
2. Annual Financial Statements: Corporations are required to submit their audited financial statements annually to the SEC. These financial statements should comply with Philippine Financial Reporting Standards (PFRS), and in some cases may require preparation by an independent external auditor. The AFS must be stamped received by the Bureau of Internal Revenue first before the SEC.
3. Stock and Transfer Book (STB): The Corporation’s STB must be stamped by the SEC within thirty (30) days from the issuance of the Corporation’s Certificate of Incorporation.
4. Minutes of Meetings: Corporations must keep and maintain records of minutes of all meetings of shareholders, board of directors, and committees of the board. While these may not need to be submitted to the SEC regularly, they must be available for inspection upon request.
5. Reportorial Requirements for Specific Transactions: Corporations may have additional reportorial requirements depending on specific transactions or events, such as mergers, acquisitions, changes in capital structure, or changes in corporate governance.
6. Payment of Fees: Corporations are required to pay various fees to the SEC for registration, filing of documents, and other services rendered.

Bureau of Internal Revenue (BIR)

The BIR is the government agency responsible for enforcing tax laws and regulations. Its primary role is to collect taxes and ensure that taxpayers comply with tax laws. The BIR is tasked with administering various taxes, including income tax, value-added tax (VAT), excise tax, and other national internal revenue taxes.

BIR Reportorial Requirements

For corporations operating in the Philippines, the BIR imposes several reportorial requirements to ensure compliance with tax laws. These requirements may include:

1. Annual Income Tax Return (ITR): Corporations are required to file an annual income tax return, typically due on or before April 15th of the following year. This return summarizes the corporation’s income, deductions, credits, and tax payable for the taxable year.
2. Quarterly VAT Returns: Corporations registered for VAT are required to file quarterly VAT returns, typically due on or before the 20th day of the month following the end of each quarter. These returns report the corporation’s output VAT (VAT charged on sales) and input VAT (VAT paid on purchases), along with any VAT payable or refundable.
3. Expanded Withholding Tax (EWT) Returns: Corporations are required to file EWT returns, which report taxes withheld on payments made to suppliers, contractors, and other payees subject to expanded withholding tax. These returns are typically filed monthly or quarterly, depending on the frequency of payments.
4. Withholding Tax Returns: Corporations are required to file withholding tax returns, which report taxes withheld on compensation paid to employees, as well as taxes withheld on certain types of income paid to non-residents.
5. Annual Information Returns: Corporations may be required to file annual information returns, such as the Annual Information Return of Income Taxes Withheld on Compensation (BIR Form 1604-C) and the Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax (BIR Form 1604-E).
6. Other Tax Compliance Requirements: Depending on the nature of the corporation’s business activities and transactions, there may be additional tax compliance requirements imposed by the BIR, such as filing of specific tax returns, submission of supporting documents, and compliance with tax rulings and regulations.

It’s crucial for corporations to meet these reportorial requirements accurately and on time to avoid penalties, interest, or other adverse consequences. Consulting with tax professionals or accountants familiar with Philippine tax laws can help corporations navigate these requirements effectively and ensure compliance with BIR regulations.

Local Government Unit ( LGU)

Corporations operating in the Philippines may need to submit various documents and reports to Local Government Units (LGUs).

LGU Reportorial Requirements

Requirements will depend on local ordinances and regulations. Some of the common submissions include the following:

1. Business Permits and Licenses: Corporations are typically required to obtain business permits and licenses from the LGU where they operate. This often involves submitting application forms, supporting documents, and payment of necessary fees.

A company is required to renew its local business permit within the period of January 1st and 20th of each year with its respective local government unit (LGU).

Moreover, a Business Permit is an important compliance document for businesses. Failure to file for renewal during the prescribed period will subject your company to a 25% surcharge on renewal fees with an additional 2% interest per month of delay. Additionally, LGUs are empowered to suspend businesses within their jurisdiction for failure to renew business permits.

2. Zoning and Land Use Clearances: Before starting construction or operating a business in a specific location, corporations may need to secure zoning and land use clearances from the LGU. This involves demonstrating compliance with local zoning regulations and land use plans.
3. Environmental Compliance Certificates (ECC): Certain types of businesses, particularly those with potential environmental impacts, may need to obtain ECCs from the LGU’s environmental office. This requires the submission of environmental impact assessments and other relevant documents.
4. Health and Sanitary Permits: Corporations involved in food processing, healthcare, hospitality, or other industries with health and sanitation requirements may need to obtain health and sanitary permits from the LGU’s health office. This often involves the submission of facility inspection reports and compliance certificates.
5. Fire Safety Inspection Certificates: Corporations are typically required to undergo fire safety inspections by the LGU’s fire department and obtain fire safety inspection certificates. This may involve the submission of floor plans, fire safety equipment certifications, and other documents.
6. Building and Construction Permits: Corporations planning to construct or renovate buildings or structures may need to obtain building and construction permits from the LGU’s building official. This requires the submission of architectural plans, engineering designs, and other construction-related documents.
7. Local Tax Payments: Corporations are typically subject to local taxes imposed by the LGU, such as business taxes, real property taxes, and other fees and charges. They may need to submit periodic tax returns and payments to the LGU’s treasurer’s office.

These are some of the common submissions that corporations may need to make to LGUs in the Philippines. The specific requirements can vary depending on the nature of the corporation’s business activities, the location of its operations, and the ordinances and regulations of the respective LGUs. It’s essential for corporations to consult with local government offices and comply with all relevant requirements to ensure smooth and legal operations within the locality.

Employee Welfare Agencies

If the company has employees, then it must also comply with the requirements of the following labor welfare agencies:

1. Department of Labor and Employment (DOLE)
2. Social Security System (SSS)
3. Philippine Health Insurance Corporation (PhilHealth)
4. Home Development Mutual Fund (HDMF or Pag-IBIG Fund)

It’s essential for corporations to comply with these reportorial requirements to ensure regulatory compliance. After this it is crucial to know post business registration to ensure transparency and accountability. Failure to meet these obligations may result in penalties, sanctions, or other regulatory actions.