Capital Requirements for Local and Foreign Enterprises in the Philippines

Local and foreign enterprises must adhere to the required minimum paid-up capital requirements when establishing a business in the Philippines. As part of Philippine laws, enterprises must ensure full compliance of the necessary capital requirements to proceed with business registration and operations.

What is Authorized Capital?

Authorized capital is the maximum amount of capital that a company is given permission to raise via the sale of stock. Should a company need additional equity in the future, it must apply with the Securities and Exchange Commission (SEC) for a higher authorized capital amount to be able to raise additional equity through the sale of its shares. When applying for an increase with the SEC, at least 25% of the increase in capital stock has been subscribed and that at least 25% of the amount subscribed has been paid.

What is Subscribed Capital?

A Subscribed capital refers to the number of shares issued to the shareholders.

What is Paid-Up Capital?

A company’s paid-up capital represents the amount of money that a company has actually received from its investors or shareholders for the payment of shares of stock in the company. Paid-up capital may be in the form of cash, real property, service, equipment, or anything of value.

Paid-Up Capital Based on Industry

• Break Bulk Agent: ₱250,000
• Cargo Consolidator: ₱400,000
• Financing Company-Main:
  • 1st class cities: ₱10,000,000
  • Other cities: ₱5,000,000
  • Municipalities: ₱2,500,000
• Financing Company-Branch:
  • 1st class cities: ₱1,000,000
  • Other Cities: ₱500,000
  • Municipalities: ₱250,000
• Freight Forwarders:
  • Domestic: ₱250,000.00
  • International: ₱2,000,000
• Health Maintenance Organization: ₱10,000,000
• Insurance:
  • Insurance Broker: ₱20,000,000
  • Reinsurance Broker: ₱20,000,000
  • Insurance Broker and Reinsurance Broker: ₱50,000,000
  • Life Insurance Company: ₱1,000,000,000
  • Non-Life Insurance Company: ₱1,000,000,000
  • Reinsurance Company: ₱2,000,000,000
• Investment Adviser/Manager: ₱10,000,000
• Investment Company: ₱50,000,000
• Investment House: ₱300,000,000
• Lending Company-Main: ₱1,000,000
• Lending Company-Branch:
  • 1st class cities: ₱300,000
  • Other Cities: ₱150,000
  • Municipalities: ₱75,000
• Mining:
  • Authorized Capital Stock: ₱100,000,000
  • Paid-up Capital Stock: ₱6,250,000
• Non-Vessel Operating Common Carrier: ₱4,000,000
• Pawnshop: ₱100,000
• Pre-Need Plan Issuer: ₱100,000,000
• Pre-Need Plan Agent: ₱5,000,000
• Recruitment for Local Employment:
  • Corporation: ₱1,000,000
  • Partnership: ₱1,000,000
• Recruitment for Overseas Employment: ₱5,000,000
• Retail Trade with Foreign Equity: ₱25,000,000 (as amended by Republic Act (RA) 11595)
• School (for stock corporations):
  • Elementary Education: ₱1,000,000
  • Elementary & Secondary Education: ₱2,500,000
  • Elementary, Secondary, Tertiary: ₱5,000,000
• Security Agency: ₱500,000
• Securities Broker/Dealer (New/SRO-Member): ₱100,000,000
• Securities Broker/Dealer (Existing/SRO-Member): ₱10,000,000
• Securities Broker/Dealer in Proprietary Shares (Non-SROMember): ₱5,000,000
• Special Purpose Vehicle: ₱31,250,000
• Special Purpose Corporation: ₱5,000,000
• Transfer Agent: ₱1,000,000

Minimum Paid-Up Capital Based on Equity

Generally, the following guidelines apply in determining a company’s minimum paid up capital requirement.

• Domestic Corporations with more than 40% foreign equity
  • Domestic Market Enterprise: US$200,000
  • Export Market Enterprise: No minimum capital requirement
• Foreign Branch Office
  • Domestic Market Enterprise: US$200,000
  • Export Market Enterprise: No minimum capital requirement
• Partnership with foreign partner
  • Domestic Market Enterprise: US$200,000
  • Export Market Enterprise: No minimum capital requirement
• Foreign Representative Office: US$30,000
• Regional Area Headquarters (RHQ): US$50,000
• Regional Operating Headquarters (ROHQ): US$200,000

However, for certain industries. special laws may apply requiring a different minimum paid-up capital amount from the above.

Establish Your Next Business in the Philippines With Ease

As an entrepreneur, it is important to stay aware of current laws and regulations that concerns your business, whether it’s an existing or new entity. Doing so will help you shape your company with a better mindset and increase the chances of securing a successful business venture.