PHILIPPINES FOREIGN OWNED DOMESTIC CORPORATION FORMATION
Philippine Foreign Owned Domestic Corporation Establishment Guide
There are restrictions for foreigners in establishing a corporation in the Philippines. Depending on the type of business and type of business, foreign capital is not allowed or there is a limit of 20%, 25%, 30% or 40% foreign capital investment.
The participation of foreign companies in economic and commercial activities in the Philippines is regulated under Republic Act No.7042 as amended by the Foreign Investment Act (FIA) of 1991. According to the FIA's Negative List, foreign investment is prohibited or limited to a certain percentage.
The Foreign Investment Restriction List has two components, List A and List B. List A contains investment areas restricted by foreign ownership under the Philippine Constitution or specific laws. Listing B includes investment sectors with limited foreign ownership for reasons of risk to security, defense, health and morals, and protection of local small and medium-sized enterprises (SMEs).
The President of the Philippines may amend the Foreign Investment Restriction List once every two years, with the exception of foreign investment activities restricted by the Constitution of the Philippines.
The Foreign Investment Restriction List is updated and issued every two years, and the currently in force list is the 11th version signed into law by President Duterte under Executive Order (EO) No. 65 of October 2018.
In the 11th version, the Duterte administration is focusing on encouraging the entry of foreign direct investment into almost all areas of investment in the Philippines (except land ownership).
For details of the 11th Foreign Investment Negative List (FINL) in the Philippines, please refer to the KOTRA report below.
* In the Philippines, according to local laws, foreigners cannot register as an individual company, and only Filipino nationals are allowed to register.
* Foreigners can only establish foreign-funded companies (foreign-funded companies; foreign capital more than 40%) or limited partnerships (foreign capital less than 40%).
* In the Philippines, according to the Foreign Investment Act, foreigners are not allowed to engage in professional professions such as lawyers and accountants. Accordingly, it must be carried out in collaboration with local experts, and corporate management must also be carried out in collaboration with local experts.
Basic requirements for establishing a foreign-funded enterprise:
1. Appointment of at least 5 promoters and 5 or more directors (Promoters and directors must hold at least 1 share)
2. Minimum capital of US$200,000
3. The industry must not be included in the foreign investment restriction list.
1. A copy of the shareholder/director's passport
2. English copy of shareholder/director
3. Identity verification of shareholders/directors
4. Certificate of remittance of capital
5. Incorporation Form F-100
6. Treasurer Affidavit
7. Notarization of Articles of Incorporation
1. Search by corporate name
2. Draft Articles of Incorporation
3. Submit the draft articles of incorporation to a local bank in the Philippines in relation to the payment of capital
4. Submit the articles of incorporation and bank certificate to the Philippine Securities and Exchange Commission (SEC) for business registration
5. Completion of business after obtaining business registration certificate
Estimated duration of progress:
Separate estimates according to industry and business requirements