How to Set up a One Person Corporation in the Philippines for Foreign Entrepreneurs – 2025 Guide

Starting a business requires choosing between simplicity and liability protection. The One Person Corporation (OPC), introduced by the Philippines in 2019, merges these benefits. It allows entrepreneurs to establish a corporation independently, taking on roles like director and sole shareholder without the need of a set of Board of Directors. This setup maximizes control and protection efficiently.

This structure allows local and foreign entrepreneurs to form a corporation on their own. They take on the roles of director, sole shareholder, and president, without the need for a board of directors or additional shareholders. This guide will lead you through setting up a One Person Corporation in the Philippines, helping you streamline your business setup while maximizing control and protection.

• What is a One Person Corporation
• What Are the Bond Requirements for a Self-Appointed Treasurer?
• Who Can Form an OPC in the Philippines?
• Who Cannot Form an OPC in the Philippines?
• What are the Pros and Cons of an OPC in the Philippines?
  • Pros of an OPC in the Philippines
  • Cons of an OPC in the Philippines
• What Documents Are Required to Register an OPC in the Philippines?
• What Are the Filing Fees for Registering an OPC?
• What Are the Steps for Registering an OPC?
• What’s Next for Incorporating Your OPC in the Philippines?
• Frequently Asked Questions

One Person Corporation

A One Person Corporation (OPC) is a business entity in the Philippines with a single stockholder who also serves as the incorporator, director, and president. This structure offers limited liability, similar to a corporation while retaining the simplicity of a sole proprietorship.

Key features of an OPC include:

• The company name must include “OPC” as a suffix.
• There is no minimum capital requirement unless mandated by specific laws, making it accessible for both local and foreign entrepreneurs.
• No initial capital stock payment is necessary at incorporation unless specified by law.

Administrative requirements include:

• Appointment of a Corporate Secretary (a citizen and resident of the Philippines, not the stockholder) within 15 days of incorporation.
• Appointment of a Treasurer (can be the stockholder with a surety bond, must be a Philippine resident) within 15 days from incorporation.
• Designation of a Nominee and an Alternate Nominee to manage the company in case of the stockholder’s death or incapacity.

Typical examples of an OPC include small-scale businesses like sari-sari stores or rice retailing operations.

Bond Requirements for a Self-Appointed Treasurer

If the director and sole stockholder of an OPC opts to serve as the treasurer, they must provide a surety bond based on the authorized capital stock, as follows:

• ₱1 to ₱1,000,000 of Authorised Capital Stock
  • ₱1,000,000 Surety Bond
• ₱1,000,000 to ₱2,000,000 of Authorised Capital Stock
  • ₱2,000,000 Surety Bond
• ₱2,000,000 to 3,000,000 of Authorised Capital Stock
  • ₱3,000,000 Surety Bond
• ₱3,000,000 to ₱4,000,000 of Authorised Capital Stock
  • ₱4,000,000 Surety Bond
• ₱4,000,000 to ₱5,000,000 of Authorised Capital Stock
  • ₱5,000,000 Surety Bond
• ₱5,000,000 or more of Authorised Capital Stock
  • Surety Bond to be equal to OPC’s authorised capital stock

These requirements ensure financial accountability and compliance with regulatory standards.

Eligibility to Establish a One Person Corporation (OPC) in the Philippines

• A natural person of legal age, either local or foreign, subject to restrictions outlined in the Foreign Investments Negative List (FINL) regarding areas partially or fully restricted to foreign investment.
• A trust which refers to the subject matter managed by a trustee, not a trust entity.
• An estate.

Foreign individuals can establish an OPC but must adhere to specific investment limitations as detailed in the FINL.

Restrictions on Forming a One Person Corporation (OPC) in the Philippines

Entities and individuals restricted from forming a One Person Corporation (OPC) in the Philippines include:

• Natural persons licensed to exercise a profession if the OPC is intended to operate within that professional field, except if otherwise allowed by the respective Professional Regulatory Laws.
• Public and publicly-listed companies.
• Pre-need, trust, and insurance companies.
• Banks, non-bank financial institutions, and quasi-banks.
• Non-chartered Government-Owned and Controlled Corporations (GOCCs).

These restrictions are in place to ensure compliance with regulatory standards specific to these sectors.

Pros and Cons of an OPC in the Philippines

Considering a One Person Corporation (OPC) in the Philippines requires evaluating its benefits and drawbacks. Understanding these factors is essential for making informed decisions that align with your business goals. By examining the pros and cons, you can effectively navigate the complexities of business ownership, ensuring your venture is poised for success.

Pros of an OPC in the Philippines:

Advantages of forming a One Person Corporation (OPC) in the Philippines include:

• Limited Liability: Only the company as a legal entity is generally responsible for its debts, protecting the personal assets of the sole director.
• Perpetual Existence: The OPC continues to exist regardless of bankruptcy, share transfers, or changes in directors.
• Complete Control: The single shareholder retains full control, akin to a sole proprietorship, without the need for a board of directors.
• No Minimum Capital Requirements: There are no mandatory capital thresholds unless specified by law.
• Restructuring Flexibility: Existing corporations can convert to an OPC if a single stockholder acquires all company shares.

Cons of an OPC in the Philippines:

Disadvantages of forming a One Person Corporation (OPC) in the Philippines include:

• Increased Complexity: OPCs require more administrative tasks compared to sole proprietorships.
• Foreign Ownership Restrictions: Foreign nationals cannot form an OPC in industries listed on the Foreign Investments Negative List.
• Variable Tax Obligations: Tax liabilities can vary; while sole proprietorships may benefit from an 8% income tax, OPCs are subject to a corporate tax rate between 20-25%, accompanied by potential tax benefits specific to corporations.

Required Documents to Register an OPC

• Articles of Incorporation, including
  • Names and details of the single stockholder/director
  • Primary purpose
  • Term of existence
  • Principal office address
  • Nominee and alternate nominee
  • The authorized, subscribed, and paid-up capital
  • Other matters that are consistent with the law and may be necessary and convenient
• Consent in writing from the Nominee and Alternate Nominee
• Other requirements (if applicable by case)
  • Foreign Investments Act (FIA) Application Form (for use by foreign natural persons)
  • Authority to Act on Behalf of the Estate or Trust (for use by estates and trusts incorporating as an OPC)
  • Affidavit of Undertaking to Change Company Name (in the case this is not included in the Articles of Incorporation)
  • Tax Identification Number (TIN) for a Filipino citizen director
  • Passport Number or Tax Identification Number (TIN) for a foreign director

Steps in Registering an OPC?

1. Document Pre-Processing: Submit the necessary documents to the SEC eSPARC for pre-evaluation and pre-processing.
2. Fee Payment: Pay any applicable filing fees as required by the SEC.
3. Document Submission: Provide hard copies of the signed and notarized documents along with proof of payment of the applicable filing fees to the SEC.
4. Certificate of Registration: Claim your Certificate of Registration from the SEC.
5. Name Rejection Appeal: If your company name is rejected, you may appeal by submitting a Letter of Appeal to the SEC.
6. Officer Appointment: Appoint a treasurer, corporate secretary, and other necessary officers within 15 days of receiving your Certificate of Incorporation.

Conclusion — What’s Next for Incorporating Your OPC in the Philippines?

An OPC in the Philippines offers the ideal blend of autonomy and limited liability, combining the advantages of a sole proprietorship with the protective benefits of a corporation. Given the moderate complexity of forming an OPC, it is advisable to consult with a professional incorporation service. This guidance can streamline the process, making the transition smooth and efficient and ultimately saving you time, money, and stress.