There have been many improvements in the Philippines’ business climate in recent years, with key legislative changes opening more areas for foreign investment and foreign-owned corporations. Some of these changes include the abolishment of minimum capital requirement for domestic companies, stronger legal protection for minority investors, as well as the standardization of the process of obtaining construction permits and occupancy certificates. If you’re planning to take the opportunities offered by the country’s liberalized business environment and its simplified procedures for foreign investors, registering your corporation is the first step.
Step 1: Register your corporation at the Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) has jurisdiction and supervision over all corporations, partnerships, or associations in the country, and your corporation will need to receive a Certificate of Incorporation from them before legally starting any business operations.
- Reserve your corporation’s name
The SEC will not allow any corporate name that’s already reserved or used by an existing corporation. You can secure your corporation’s name at their website, or get a Name Verification Slip at the SEC Main Office in Mandaluyong City, Metro Manila.
- Open a Treasurer-in-trust fund (TITF) bank account
Corporations with over 40% of foreign equity are required to have a minimum capital of USD 200,000, while those with less than 40% foreign equity only need PHP 5,000. Depending on the industry and the special laws that apply to it, this amount can go higher or lower. For example, the Retail Trade Liberalization Act of 2000 requires foreign retailers to have a minimum paid-up capital investment of USD 2.5 Million. As such, you need to open and maintain a TITF account with your bank of choice, which should have the required paid-up capitalization. Take note that this account should be reflected in the Treasurer’s Affidavit and is for deposit only until the SEC’s approval of the registration papers.
- Prepare and notarize the
following documents
- Articles of Incorporation
- Corporate By-laws
- Registration Data Sheets (which should include the corporation’s capital stock, incorporators, directors, officers, and other pertinent information)
- Treasurer’s Affidavit (which certifies that at least 25% of your corporation’s capital stock has been paid)
- Submit the requirements to the SEC
When you submit the requirements to the SEC Main Office, you will also need to pay a registration fee based on your company’s capital stock, which you can calculate here. If the SEC finds everything fully compliant with the RCC, they will issue your Certificate of Incorporation. You can read more details about registering with the SEC here.
Step 2: Acquire the necessary permits from your local government unit
- Barangay Clearance
The Barangay Clearance certifies your corporation’s residency and law-abiding character. It is also a prerequisite document to getting your business permit and tax registration. To get this clearance, you need to submit the following to your barangay office:
-
- Certificate of Incorporation from the SEC
- Two valid IDs
- Proof of Address (Contract of Lease or Certificate of Land Title)
- Completed application form
- Business Permit
A Business Permit legalizes your corporation’s local business operations and can be secured from the municipal office or city hall that presides over your location. To apply for one, you need to submit these requirements:
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- Certificate of Incorporation from the SEC
- Barangay Clearance
- Two valid IDs
- Proof of Address (Contract of Lease or Certificate of Land Title)
- Completed application form
Step 3: Fulfill your tax obligations at the Bureau of Internal Revenue (BIR)
When you receive your Certificate of Incorporation from the SEC, they will also provide you with a tax identification number (TIN), which you will need to formally register with the Bureau of Internal Revenue (BIR). Specifically, you need to present the following to the BIR Regional District Office (RDO) where your business is located:
- An accomplished BIR Form 1903 (Application for Registration – For Partnership/Corporation)
- Certificate of Incorporation from the SEC
- Barangay Clearance
- Business Permit
- Proof of Address (Contract of Lease or Certificate of Land Title)
- Valid IDs
During this process, you will need to pay for the registration (BIR Form 0605) and the Documentary Stamp Tax (BIR Form 2000), as well as register your book of accounts and receipts. Once all the requirements are satisfied, the RDO will provide you with your corporation’s BIR Certificate of Registration. Corporation registration in the Philippines can be a daunting process, but here at FilePino, we can provide you access to the expertise, resources, and services you need to navigate the country’s corporate and legal landscape. Build your corporation with the FilePino team today! You can call us at +1.806.553.6552 or send us an email at info@filepinostg.wpengine.com. Feel free to also leave us a message here.
