1. What are the requirements in setting up a corporation in the Philippines?
(A): The minimum requirements are:
- Officers: President, Treasurer, Corporate Secretary (the latter must be a Filipino citizen)
- Address in the Philippines (preferably with lease contract already). Can be a virtual office or a physical location.
- Reservable name with the SEC.
2. Why do we need 2 directors?
A: The Philippine Corporation code requires that in setting up a corporation in the Philippines, there must be at least 2 directors.
“Batas Pambansa Blg. 68 Section 10. Number and qualifications of incorporators. – Any person, partnership, association or corporation, singly or jointly with others but not more than fifteen (15) in number, may organize a corporation for any lawful purpose or purposes: Provided, That natural persons who are licensed to practice a profession, and partnerships or associations organized for the purpose of practicing a profession, shall not be allowed to organize as a corporation unless otherwise provided under special laws. Incorporators who are natural persons must be of legal age.
Each incorporator of a stock corporation must own or be a subscriber to at least one (1) share of the capital stock.”
3.Why is a resident director (RD) required?
A: The same provision quoted above requires that the majority must be residents of the Philippines. They do not need to be citizens of the Philippines though.
4.Q: Can the corporation be owned 100% by a foreigner?
A: Yes. So long as the business is outside of the negative list of investment. The negative list enumerates the threshold of foreign ownership. The full text of the negative list can be seen here: https://www.officialgazette.gov.ph/downloads/2018/10oct/20181029-EO-65-RRD.pdf
5. What do I need to be a director:
A: Own at least 1 share in the corporation. For purposes of general information sheet filing, you should secure a tax identification number in the Philippines
6.Q: What are the requirements in SEC registration?
A: The basic requirements are found here:
https://www.filepino.com/how-to-register-a-corporation-in-the-philippines/
These are:
- Name Verification Slip (may be secured online or at SEC Name Verification Unit)
- Articles of Incorporation (AI) and By-laws (BL)
- Treasurer’s Affidavit
- Joint affidavit of two incorporators to change corporate name (not required if already stated in AI)
7.What are the requirements for BIR registration?
Registration Requirements:
Primary Registration
- Application for Taxpayer Identification Number (TIN)
- Application for Registration Update
Secondary Registration
- Registration of Book of Accounts
- Application for Authority to Print Receipts & Invoices
- Application for Authority to Use Computerized Accounting Systems and/or Components thereof/Loose-leaf Book of Accounts
- Application for Permit to Use Cash Register Machine (CRM) and/or Point of Sales Machine (POS)
The full requirements can be found here: https://www.filepino.com/your-guide-to-company-registration-in-the-philippines/
8. Do I need to comply with the 60% Filipino-40% Foreigner equity split?
A: It depends on the industry and from where most of the revenue will come from
The restricted/nationalized industries are found in the negative list. This negative list is the list of industries where there is a cap for foreign equity. For example recruitment, the maximum foreign equity is 25%. The same applies to industries in advertising (30%), education (30%), development of natural resources (30%) etc. The full list can be found in the “Negative list.”
If the business is not falling under the restricted list, there is a possibility that 60%-40% may not be needed. These are:
- If the business is export oriented, meaning most of the revenues will be from outside of the country; or
- If the foreigners have put up a minimum capitalization of 200,000 usd.
Thus, if the business is export oriented, it can be owned by 100% foreigners. If the business owners are able to put up 200,000 usd capitalization, regardless if it’s an export oriented company, then it can also be owned by 100% foreigners.
If none of the above is true, the 60-40% is necessary.
9. Do I need 200,000 usd capital to set up a business?
A: It depends. On the ownership structure and where the revenue will come from. If the business is export oriented, no 200,000 usd is not needed. If the business is not export oriented AND you’d like a foreigner to own most of the shares (majority ownership) then 200,000 usd capital is needed.
10. How long does it take to register a company in the Philippines?
A: At present, the timeline has changed wherein processing will take around 3-4 months to finish. Note, however, that it’s a case to case basis. There may be additional requirements or unforeseen delays that can add up more to the estimated timeline.
It’s hard to give an accurate period but we always strive to finish the registration at the fastest way we can. We do regular or weekly follow ups to ensure the project is moving at every stage of registration with the concerned government office.
How can FilePino help?
At Filepino, we offer different packages that a client may need throughout the lifespan of its business – from start, during its season, and up to its end; from registration, identifying and acquiring ideal office space solutions, providing legal consultation, and even to expansion of businesses.We have local resources in helping us to provide quality assistance to individuals, corporations and businesses. These are coupled by the assistance given by our excellent lawyers and devoted staff. We ensure to guide the client well and give the best possible suggestions or options at any stage of the business. Some providers just say whatever a client needs to hear just to close a deal but we, at Filepino, makes sure that our options redound to the benefit of our client at all times. We don’t close deals until we are sure that a certain package fits perfectly to the needs of our clients.
Hence, we take into consideration all the factors that you may be concerned with – from issues on nationality, number of authorized capital stock, and even budget. We can discuss with you the pros and cons of each of our packages because we just don’t rely on our knowledge, we also rely on your needs and wants so long as we can provide quality service convenient to you and your needs, in the most efficient time possible.
