Starting a business as a foreigner: ownership, capital, registration and visa

Estimated budget

Paid-in capital of at least US$200,000. SEC: name reservation ₱100, articles 1/5 of 1% of authorized capital (minimum ₱2,000), FIA application fee ₱3,000, documentary stamp ₱30. DTI business name if needed: ₱200 to ₱2,000.

Processing time

SEC registration: usually a few weeks once the capital is remitted; then barangay, mayor's permit and BIR

• A business selling to the Philippine market with less than US$200,000 of paid-in capital is reserved to Filipinos above 40% foreign ownership.
• The capital must really be paid in and remitted through a bank, which certifies the inward remittance.
• The activity must not appear on the Foreign Investment Negative List; check it before investing.

Myth: Foreigners can never own more than 40% of a Philippine company. Reality: 100% is allowed for most activities, provided the paid-in capital reaches US$200,000 (or US$100,000 in specific cases).

Estimated budget

Paid-in capital of at least US$100,000, plus the same SEC fees as any company (FIA application fee ₱3,000).

Processing time

As for a normal incorporation; add the time to obtain any startup or technology endorsement

• The US$100,000 threshold applies only if the business uses advanced technology, is endorsed as a startup or startup enabler, or has a majority of Filipino direct employees with at least 15 of them.
• If the condition stops being met, the company falls back under the US$200,000 rule.
• Keep payroll records showing the number of Filipino employees: they are your proof.

Myth: US$100,000 is enough for any foreign business. Reality: Only when one of the legal conditions is met; otherwise it is US$200,000.

Estimated budget

No minimum capital for the Filipino-majority company itself. SEC fees as for any corporation: name ₱100, articles from ₱2,000, documentary stamp ₱30.

Processing time

SEC registration usually a few weeks, then local permits and BIR

• At least 60% of the shares must be owned, really and beneficially, by Filipinos.
• Foreign directors can only sit in proportion to the foreign equity, and Filipino shareholders must not be fronts for you.
• A manufacturer selling only its own products through a single outlet (for example a bakery with one shop) is not "retail trade", but the US$200,000 rule for the domestic market still applies.

Myth: I can hold 40% officially and control 100% through a private contract. Reality: That is the definition of a dummy arrangement, a criminal offence under CA 108.

Estimated budget

Paid-up capital of at least ₱25,000,000; for more than one physical store, at least ₱10,000,000 invested per store. Plus SEC fees.

Processing time

SEC registration and DTI qualification: allow several weeks

• Foreign retailers need a minimum paid-up capital of ₱25 million, kept in the Philippines while operating.
• With more than one physical store, each store needs at least ₱10 million of investment.
• Violations carry 4 to 6 years of imprisonment and fines of ₱1 million to ₱5 million; foreigners are deported after serving the sentence.

Myth: Small foreign shops are fine as long as they are registered. Reality: Below ₱25 million, foreign equity in retail is limited to 40%.

Estimated budget

No US$200,000 minimum for an export enterprise outside Lists A and B. SEC fees as for any corporation; incentive registration (BOI or PEZA) has its own fees.

Processing time

SEC registration, then BOI or PEZA registration if you seek incentives

• An export enterprise whose activity is not on the negative list can be 100% foreign-owned.
• If it fails its export requirement, it can be ordered to bring domestic sales down to 40% of total production.
• Incentives and the PEZA visa for staff come with BOI or PEZA registration.

Myth: Any online business is an export business. Reality: Only if most of the output really goes to clients abroad.

Estimated budget

No capital level lifts these limits.

Processing time

Not applicable

• Mass media (with some exceptions), private security agencies, small-scale mining, cooperatives and the manufacture and retail of firecrackers allow no foreign equity.
• Land ownership and many other activities are capped at 40% foreign equity; a land-owning corporation must be at least 60% Filipino.
• Contracts that give a foreigner control of such an activity are void and expose everyone involved to criminal penalties.

Myth: A good lawyer can make any activity 100% foreign. Reality: Constitutional limits cannot be contracted away.

Estimated budget

No fee fixes this; restructuring costs depend on the business (new company, transfers, taxes).

Processing time

Act before a dispute arises

• A sole proprietorship belongs to the person registered with the DTI, and shares belong to the registered shareholder.
• Private agreements saying the business is "really yours" are void if they hide foreign control of a restricted business, and courts do not help the parties recover.
• Using a Filipino dummy in a restricted activity is a criminal offence under CA 108, with prison terms of 5 to 15 years.

Myth: Putting the business in my wife's name is the normal solution. Reality: It makes her the owner; if you control a restricted business through her, it can be a dummy arrangement.

Estimated budget

Annual SEC reports (General Information Sheet, audited financial statements) and their accounting fees.

Processing time

Ongoing: annual filings with the SEC and BIR, permits renewed every January

• Your rights come from the articles, by-laws and shareholders' agreement: read them, they decide what you can block.
• As a shareholder you can inspect the books and records, and in some cases exit at a fair value through the appraisal right.
• Management by foreigners in a nationalized activity is limited; technical positions need a DOJ authority.

Myth: As a minority I have no rights. Reality: The Revised Corporation Code gives inspection, appraisal and derivative suit rights.

Estimated budget

No official figure: lawyer's fees, and if needed SEC or court proceedings.

Processing time

Months if there is no agreement

• The person named in the DTI registration or the stock and transfer book is presumed the owner.
• If you are a real shareholder, your shares can only be bought out according to the by-laws and agreements, or by agreement.
• If the business was in your spouse's name, it may fall into the property regime of the marriage; see the divorce and annulment guide.

Myth: I paid for everything, so the court will give me the business. Reality: Courts look at registration and lawful ownership; money put into a dummy arrangement is hard to recover.

Estimated budget

Investment of at least US$75,000 remitted from abroad, plus visa processing fees (confirm with the BOI or the consulate).

Processing time

BOI evaluation then issuance; the first visa is a 6-month probationary multiple-entry visa

• You must invest at least US$75,000, remitted in foreign currency and certified by the bank and the Bangko Sentral ng Pilipinas.
• The visa depends on keeping the qualifying investment; withdrawing it can end the visa.
• The SIRV lets you reside, but working in a company still follows DOLE rules.

Myth: The SIRV lets me work anywhere. Reality: It is a residence visa; employment still needs DOLE authorization unless an exemption applies.

Estimated budget

AEP or Certificate of Exclusion: see the work guide. 9(g) visa fees: confirm with the BI.

Processing time

AEP or exclusion first, then the visa: allow several weeks to months

• Owning a company does not authorize you to work in it on a tourist visa.
• Part-owner officers such as the president or treasurer can be excluded from the AEP, but need a DOLE Certificate of Exclusion.
• The 9(g) visa is still needed, filed by your company with the BI.

Myth: Owners do not need a work visa. Reality: Being an owner removes the AEP in some cases, never the visa.

Estimated budget

DOLE Certificate of Exemption: ₱2,000 under the 2021 schedule (confirm with the BLE). Business fees as for any company.

Processing time

Certificate of Exemption: a few working days

• A resident visa (13(a), permanent resident) exempts you from the AEP, but not from the foreign ownership limits.
• SRRV holders who work in the business still need an AEP.
• Your residence and your business stay separate: losing the visa does not dissolve the company, but you may lose the right to stay and run it.

Myth: Married to a Filipino, I can own any business. Reality: Your visa changes your right to work, not the foreign ownership rules.

Estimated budget

DTI business name: ₱200 to ₱2,000 depending on scope. A foreign sole proprietor must also meet the Foreign Investments Act rules, including the capital threshold for the domestic market.

Processing time

Business registration, then BIR; plus the visa allowing the activity

• A foreign national registering a sole proprietorship needs a certificate of registration under the Foreign Investments Act, not just a business name.
• On a tourist visa, providing services to Philippine clients is unauthorized work.
• Regulated professions (engineering, architecture, accountancy and others) remain closed without reciprocity and a PRC permit.

Myth: Freelancers are not employees, so no permit is needed. Reality: Doing business here needs registration under the FIA rules and a visa that allows the activity.