Registration of a Domestic Corporation in the Philippines

Registering a corporation requires a minimum of two incorporators, each of whom must be actual persons that must hold at least a single share in the company. The majority of the incorporators must be Filipino residents. A domestic corporation may have between two to 15 shareholders (or trustees if a non-stock corporation), each of whom must hold at least one qualifying share of stock. The majority of the directors (or trustees) must be Philippine residents, but not necessarily citizens.

All Domestic Corporations must obtain their license from and register with the Securities and Exchange Commission (SEC) to be legally allowed to operate their business in the Philippines. The agency will require a prospective corporation to reserve and register a name (offline and online options), submit proposed Articles of Incorporation and By-Laws which are compliant with the requirements of the Corporation Code of the Philippines, and meet the minimum capitalization requirements pertaining to the industry or business in which it is engaged.

Under the Foreign Investment Act (FIA), the minimum paid-up capital requirement for corporations considered Domestic Market Enterprise (DME) or one whose foreign equity exceeds 40% is US$200,000, which amount must be remitted into the Philippines. The registration requirements do not apply to export-oriented enterprises or involve advanced technology and will employ at least 50 employees.

Limited Liability for Corporations

Corporations in the Philippines have a separate and distinct juridical personality from their shareholders, which results in limited liability for the latter. A corporation is an artificial entity created by operation of law. It possesses the right of succession and such powers, attributes, and properties expressly authorized by law or incident to its existence. It has a personality separate and distinct from that of its stockholders and from that of other corporations to which it may be connected. As a consequence of its status as a distinct legal entity and as a result of a conscious policy decision to promote capital formation, a corporation incurs its own liabilities and is legally responsible for the payment of its obligations. In other words, by virtue of the separate juridical personality of a corporation, the corporate debt or credit is not the debt or credit of the stockholder. This protection from liability for shareholders is the principle of limited liability. (Philippine National Bank vs. Hydro Resources Contractors Corporation G.R. No. 167530 March 13, 2013 citing Good Earth Emporium, Inc. v. Court of Appeals, G.R. No. 82797, February 27, 1991, 194 SCRA 544, 550).

The corporate fiction may be pierced, however, in case of fraud, illegality, or to defeat public convenience, justify wrong, protect fraud or defend crime. Clear and convincing evidence of wrongdoing or fraud must be established before disregarding the corporate entity. Mere ownership by a single stockholder of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality. The same rule holds true even if the incorporators of two corporations are substantially identical.

Stock Corporation

100% Filipino Equity

Documentary requirements

• Bank Certificate showing paid-in capital
• Articles of Incorporation and By-laws
• Treasurer’s Affidavit
• Registration Data Sheet
• Endorsements / Clearances from other government agencies (if applicable)

60% Filipino, 40% Foreign Equity

Documentary Requirements

• Bank Certificate showing paid-in capital
• Articles of Incorporation and By-laws
• Treasurer’s Affidavit
• Registration Data Sheet
• Endorsements/Clearances from other government agencies (if applicable)

More than 40% Foreign Equity

Documentary Requirements

• Form F-100
• Articles of Incorporation and By-laws
• Treasurer’s Affidavit
• Bank Certificate showing paid-in capital
• Proof of Inward Remittance by non-resident aliens and foreign corporate subscribers who would like to register their investment with the Central Bank of the Philippines.

Non-Stock Corporation

Income or profit generated by this type of corporation cannot be distributed as dividends to its officers or members but shall be used for its operations and for the purpose in which the company was incorporated.

Examples of  activities of Non-stock Corporations

• Religious
• Foundations
• Associations
• Charitable
• Civic service
• Fraternal
• Cultural
• Educational
• Chambers (Amcham, BCCP, et al)
• Any combination of the above mentioned

Documentary Requirements

• Bank Certificate showing paid-in capital
• Articles of Incorporation and By-laws
• Treasurer’s Certificate
• Registration Data Sheet

Register a Domestic Corporation in the Philippines

With numerous incentives and efforts from public and private sectors to further ease the doing business landscape in the Philippines, investing the country can provide numerous benefits for your company. Our team has a large pool of business consultants and industry experts to help you secure full compliance with relevant corporate regulations when setting up a business in the Philippines.