Philippines Company Formation & Entity Choice

Entity types and incorporation

• Common entity types — Domestic stock corporation, One Person Corporation (OPC), partnership, sole proprietorship, and branch/representative office of a foreign company (Revised Corporation Code of the Philippines (RA 11232))
• Registration authority — Securities and Exchange Commission (SEC) for corporations/partnerships; DTI for sole proprietorships (Revised Corporation Code of the Philippines (RA 11232))
• Minimum incorporators — 1 (One Person Corporation); 2 to 15 for an ordinary stock corporation (Revised Corporation Code of the Philippines (RA 11232))
• Minimum paid-up capital (domestic, Filipino-owned) — No statutory minimum capital. The 25%/25% rule is CONTESTED — do not assert it as current law. The Revised Corporation Code (RA 11232 s.12) removed the statutory minimum and appears to have deleted the mandatory '25% of authorised capital subscribed / 25% of subscribed paid up' requirement for ORIGINAL incorporation (retaining it only for later increases in authorised capital). However, multiple 2025-dated practitioner and SEC-facing guides still describe SEC registration practice as requiring 25%/25% (with a practical floor around PHP 5,000). These do not reconcile from public sources: confirm against current SEC eSPARC/OneSEC practice before relying on either position. (RA 11232 s.12 vs current SEC practice guides — unresolved. Flagged by Jonathan I. Ruiz (CPA).)
• Minimum capital for foreign-owned domestic corporation — USD 200,000 paid-up capital. Reduced to USD 100,000 if ANY of: (a) the enterprise involves advanced technology as determined by DOST; (b) it is endorsed as a startup or startup enabler under the Innovative Startup Act (RA 11337); or (c) a majority of its direct employees are Filipino, with an absolute floor of at least 15 Filipino employees. (RA 11647, in force 17 March 2022 — this REPLACED the old '50 direct employees' test.) USD (RA 11647 (2022 amendment to the Foreign Investments Act) and its IRR. Corrected by Jonathan I. Ruiz (CPA, Philippines))
• One Person Corporation minimum capital — No minimum paid-up capital required (unless mandated by the industry); name must end in 'OPC' (Revised Corporation Code of the Philippines (RA 11232), Title XIII)
• Core incorporation steps — Reserve name and file Articles of Incorporation via SEC eSPARC; register with the BIR for TIN and books; register with the LGU for a business permit (Mayor's Permit); register as employer with SSS, PhilHealth and Pag-IBIG (Revised Corporation Code (RA 11232); NIRC Section 236)
• SEC registration fee — 1/5 of 1% of authorised capital stock (or the subscription price, whichever is higher), but NOT LESS THAN PHP 2,000 — per the SEC's own Registration Calculator. Plus a Legal Research Fee of 1% of the filing fee, itself not less than PHP 10. (SEC Registration Calculator (sec.gov.ph). Corrected by Jonathan I. Ruiz (CPA, Philippines))
• Typical incorporation timeline — Approximately 2 to 6 weeks to complete SEC, BIR, LGU and statutory-fund registrations ((approx — varies by LGU and completeness of documents)) (SEC / BIR registration procedures)
• Annual SEC compliance — File the General Information Sheet (GIS) within 30 days of the annual stockholders' meeting and Audited Financial Statements (AFS) per SEC schedule (Revised Corporation Code of the Philippines (RA 11232))
• Annual BIR compliance — File the annual income tax return (BIR Form 1702) with audited financial statements; renew BIR registration and pay the documentary stamp tax; renew the LGU business permit each January (NIRC Sections 52, 232; Local Government Code (RA 7160))
• Statutory audit requirement — Independent audit and AFS required where gross annual sales/receipts exceed PHP 3,000,000 PHP (NIRC Section 232; SEC rules)