The Philippines has more fully opened its economy to widen foreign entry than what most investors realize during their initial attempt to open new markets. The new guides on foreign ownership indicate that 100% foreign equity participation is allowed in over 90% of industries. The changes of the last years to laws on manufacturing, BPO and IT services, retail beyond the capital threshold, and renewable energy, among others, have reduced most of the barriers. For those investors who found it difficult to assess foreign participation in the Philippines in the years that preceded this, the situation in 2026 is substantially more liberal. However, the remaining restricted sectors and the capital limits for foreign-owned companies need to be assessed in detail prior to deciding on a corporate structure.
Entity Choices
The Domestic Corporation, which is a Private Corporation under the Revised Corporation Code, is by far the most popular corporate vehicle used by foreign-owned businesses in the Philippines. It is a legal entity and limits the liability of the shareholders, and is able to own property, enter into contracts, hire employees and may apply for incentives with PEZA or BOI. Under the Revised Corporation Code, there is a minimum requirement of only 1 incorporator and no limit to the maximum number of incorporators.
The One Person Corporation under the Revised Corporation Code allows for single natural person incorporation. As an accessible option, it is especially useful for foreign entrepreneurs who require control over the incorporated business. However, some legal structures and sectors will not be available.
A branch office for foreign corporations will extend the parent company and, as a result, the parent company will bear full legal liability for the branch obligation in the Philippines. Due to varying costs for branch registration and legal incorporation, businesses will avoid liability exposure and lose the benefits of operating as a separate entity, which a branch office would cause. Restricted further, a Representative Office will not earn any revenue and will only be used for limited support to the parent. As a result, it can only be used to help in the preliminary assessment of market entry into the Philippines and cannot be used as part of a business operating structure.
Foreign Ownership Rules in 2026
Businesses in mass media, advertising, and some utilities and infrastructure, along with some education institutions will be allowed to operate in the Philippines under the 60-40 foreign equity distribution. Philippine nationals, and a limited quantity of foreign nationals, will be allowed to own land in the Philippines; however, foreign nationals will be allowed to lease land and will be allowed to own a condo in the Philippines with a limit on foreign ownership of 40%.
In most sectors that allow complete foreign ownership, the threshold for at least 100% foreign-owned corporations is usually set at USD200,000, which is lowered to USD100,000 for firms that have at least 50 employees, who must be Filipino citizens, or corporations that engage in activities that utilize advanced technologies, as determined by the relevant government authority. These thresholds are set by the SEC and are not the minimums found in the corporate laws. These thresholds are also the minimum paid-in capital that is to be brought in and actually shown to the SEC when incorporating wholly-owned foreign corporations in the country.
The retail industry has its own capital structure after liberalization. Foreign owned retail corporations are allowed entry to the Philippine market with a minimum capital of only ₱25 million. This figure is greatly decreased from the threshold prior to liberalization, and is still subject to other requirements of the retail industry.
Steps to Register
The first step to registering with the SEC is to officially create the corporate entity. This start with a name check via the SEC’s online system. If the proposed corporate entity name is available and compliant with the SEC’s naming rules, incorporation documents may be drafted and filed. These documents may include the Articles of Incorporation, By Laws, a treasurer’s affidavit (with a signed affidavit confirming paid-in capital), and IDs for the directors, incorporators. For entities that are fully foreign-owned, the paid-in capital must be transferred and verified through a certificate from the bank before the SEC registration will be completed. SEC registration will take 5 to 15 business days on average after the application is filed. The application can be filed online or in-person through the SEC’s corporate registration system.
Once approved by the SEC, the company’s registration with the Bureau of Internal Revenue will issue its Tax Identification Number, register the company for VAT (if applicable), and authorize the company’s official receipts and invoices. U. B. I. R. Request for official receipts and invoices. Official receipts issued by the BIR (Bureau of Internal Revenue) cannot be issued to clients without BIR-registered official receipts. The City or Municipal Hall where the company’s registered office or place of business is located also requires a separate business permit. This permit, commonly referred to as the Mayor’s Permit, is issued after the mandatory compliance of its documentary requirements that include the registration with the SEC, the registration with the BIR, barangay clearance, and the zoning clearance (if applicable). The Mayor’s Permit must be renewed every year.
Registration with the Social Security System (SSS) and PhilHealth, and Pag-IBIG (Housing and Urban Development Coordinating Council) follows the registration with the BIR if the company will hire employees. These registrations also require the SEC and BIR documents and provide employer registration numbers needed to process payroll. PEZA (Philippine Economic Zone Authority) registration for companies seeking to enjoy the economic incentives for operating within PEZA’s economic zones runs as a separate, parallel process. This registration has its own documentary requirements including a project feasibility study.
Capital Remittance and Proof Requirements
Foreign investors looking to invest in a fully foreign-owned corporation in the Philippines are required to remit that capital to the Philippines through the banking system. Those investors are also required to obtain a Bangko Sentral ng Pilipinas registered foreign investments documentation (more commonly known as a BSP registered inward remittance certificates) if such investors want the option to unrestrictedly repatriate that capital or any dividends in the future. Capital invested in the Philippines without BSP registration can nonetheless be used in the Philippines, but are likely to face difficulties when repatriating overseas. Therefore, the documentation of inward remittances should be viewed as a compliance requirement to be undertaken during the first transfer, rather than an optional formality that can be done later.
Common Mistakes
The most significant mistake is selecting the wrong entity type. The cost of restructuring from a branch to a domestic corporation or from a restricted to an unrestricted ownership structure after the business is already operational is capital intensive. Foreign ownership limits should not be ignored. The compliance risk of operating with a foreign ownership structure that employs the 60-40 rule may ultimately lead to losing the Operating License (OL) and will more than likely have a negative impact on the business’ standing with the relevant business authorities. Sector-specific restrictions will far exceed the “90% of sectors are open” claim. Also, the requirements set by the SEC are often underestimated. The need for the Bureau of Internal Revenue (BIR) official receipts and the Mayor’s Business (Mayor’s) Permit will result in operational delays while clients will have to wait to conduct Business-to-Business (B2B) transactions. Further delays will occur when the preparation of the banking documents is postponed until after SEC registration.
Frequently Asked Questions
Can foreigners own 100% of a Company in the Philippines? Yes, 100% foreign ownership is permissible in over 90% of sectors as of 2026. The only significant exceptions are mass media, certain utilities, land, and retail with less than ₱25 Million capital.
What is the Minimum Capital for a 100% foreign-owned Company? The capital is commonly set at USD 200,000, but can be USD 100,000 if the company employs at least 50 Filipinos or is in a business that deals with advanced technologies.
Which sectors allow 100% foreign ownership? Manufacturing, BPO and IT-BPO services, retail with paid-in capital above ₱25 million, renewable energy, most services sectors, technology and digital businesses, etc. The remaining restricted sectors are explicitly listed in the current Foreign Investment Negative List.
How long does company registration in the Philippines take? SEC registration for a complete application generally takes five to fifteen working days. The complete registration of most businesses, including registration with BIR, obtaining local business permits, and employee benefits agency registrations, is done within four to six weeks of the start of the registration process.