A Guide on Company Registration in the Philippines

There’s no doubt that the Philippines is a growing economy. In fact, it finished last year strong, with a gross domestic product (GDP) growth rate of 5.6%, even outpacing major economies in Asia, such as China, Vietnam and Malaysia. Many see this growth as an opportunity to open a business in the country, as evidenced by the Department of Trade and Industry (DTI) reporting 984,332 business name registrations for 2023 alone. 

If you're interested in leveraging the Philippines' expanding economy to start a business, you have to know how to register your business first. Here’s a guide on company registration in the Philippines. 

What is Company Registration, and Why is it Important? 

Company registration in the Philippines is the essential process of legally establishing a business, allowing it to operate within the country. It involves submitting necessary documents to the Philippine Securities and Exchange Commission (SEC) or other relevant authorities, depending on the business type. 

This process not only grants a company its legal identity, making it distinct from its owners, but also enables it to engage in commercial activities, hire employees, and access financial resources like bank loans and investments.

Government Offices Involved in Company Registration in the Philippines 

In the Philippines, there are a number of government offices you must go through to register your business. These are:

• The Securities and Exchange Commission (SEC)
• The Bureau of Internal Revenue (BIR)
• Department of Trade and Industry (DTI)
• Social Security System (SSS)
• PAG-IBIG
• PhilHealth 
• Local Government Unit (Mayor’s Office) 

Here’s a brief description of these offices including the documents they require OR the process involved in registration:

Securities and Exchange Commission (SEC)

The SEC is where you need to reserve your business name, and then, after opening a corporate bank account, register your business first. Requirements include: 

• Form for Name Reservation and Payment
• Articles of Incorporation and By-laws, duly notarized
• Affidavit of the Treasurer
• Certificate of Deposit from the Bank or Evidence of Inward Remittance
• Completed SEC Form F-100 (required for corporations with foreign equity exceeding 40%)

Company registration in the SEC may take 10 to 15 business days, provided you have complete requirements. 

Department of Trade and Industry

For sole-proprietorship business, you need not register with the SEC, however, you must register with the Department of Trade and Industry. 

Bureau of Internal Revenue (BIR)

The BIR is the taxing authority in the Philippines. Here, you need to secure your TIN, apply for books of accounts, and apply for the authority to print official receipts. 

Social Security System (SSS)

SSS is the pension or retirement scheme for private employees. The company registration won’t be complete without securing an employer number from SSS. This will be used as reference for the employee’s monthly contributions, considering the business is to be the withholding agency. 

Below are the requirements you need to submit:

• Employer Registration Form (R-1)
• Employment Report Form (R-1A)
• SEC Registration, Articles of Incorporation, and By-laws

Pag-IBIG

You also need to register as an employer in the Pag-IBIG Fund, also known as the Home Development Mutual Fund (HDMF), as you’ll also withhold contributions for it. Pag-IBIG gives employees access to high-interest savings accounts and low-interest housing loans. 

PhilHealth

To register a business in the Philippines, you must ensure that you’re also withholding contributions for PhilHealth, which serves as the employee’s government-facilitated health insurance. 

You need to submit the following:

• Employer Data Record (ER1)
• Report of Employee-Members (ER2)
• SEC Registration, Articles of Incorporation, and By-laws

Local Government Unit (Mayor’s Office)

Finally, company registration also happens in the local government where your business is located. In the Mayor’s office, submit the following: 

• SEC Registration, Articles of Incorporation, and By-laws
• Barangay Clearance
• Lease Contract
• Locational Clearance

You can get the Barangay clearance from the barangay where your business is located. Note that obtaining the locational clearance also has its own set of requirements. 

Note: Besides this offices, you may also need to go through other agencies depending on the business type (eg. Cooperatives are under the Cooperative Development Authority). 

Reminders on Government Offices Involved in Company Registration

Please remember that a business cannot be registered at all the government offices simultaneously. For example, the first step is usually to reserve the company name at SEC, then open a corporate bank account, before completing the registration at SEC again. 

After this, the typical step is to go to get the barangay clearance so that you can register at the Mayor’s Office. From here, you can proceed with the BIR. 

Likewise, some businesses require an endorsement from other government agencies. Here are some examples: 

Types of Businesses in the Philippines and Their Registration Process 

The steps and requirements for company registration in the Philippines usually depend on the type of business you wish to pursue. Choosing the correct type of business is also crucial because it has its own set of regulations when it comes to startup costs and tax obligations. 

In general, there are 5 types of business: 

• Sole Proprietorship
• Partnership
• Cooperative 
• Corporation 
• One-Person Corporation 

Below, you can find a brief description of each type, the capital requirements for company registration, and the offices where you need to register at. 

Sole Proprietorship 

This is the most basic form of business in the country. The business can be established by just one person; the company is also the extension of the owner. 

A sole proprietorship business can be Filipino-owned or foreign-owned. If it’s foreign-owned, it must reach the capital requirement of $200,000 USD and its business should not be under the Foreign Investment Negative List. 

Government Agencies Involved in Company Registration:

• Department of Trade and Industry (DTI) 
• Bureau of Internal Revenue (BIR) 
• Local Government Unit (LGU) 

Partnership 

This type of business is established by two or more people. When registered, the business becomes a separate legal entity from the partners. 

The government agencies involved in company registration for partnerships are as follows:

• Department of Trade and Industry (DTI) - if the capital is below P3,000
• Securities and Exchange Commission (SEC) - If the capital is P3,000 and up
• Bureau of Internal Revenue (BIR)
• The Local Government Unit 
• If the business is going to have employees, then they also need to register with SSS, Pag-IBIG, and PhilHealth

Cooperative 

Under the Philippine law, a cooperative is defined as “an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations.”  

They also make “equitable contributions to the capital required, patronising their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles.”

Unlike other types of business, company registration for a cooperative needs to go through the Cooperative Development Authority (CDA). This can be easily done online here. The capital requirement is P15,000 except for multi-purpose cooperatives where the required capital is P100,000. 

Corporation 

A corporation has a maximum of 15 people, acting as a single entity. It can be stock (profit-generating) or non-stock (non-profit). 

Organised under the Philippine Law is the Domestic Corporation, which can be: 

• 100% Filipino-owned, the capital requirement of which is $100 or P5,000
• 60% Filipino-owned and 40% foreign-owned, with capital requirement of $100 or P5,000
• 40.01% to 100% Foreign-owned, with capital requirement of $200,000

If a corporation is already existing under a foreign law, then that foreign corporation must first be licensed and appoint one resident agent. The types of business organised under foreign laws include:

• Branch Office
• Representative Office
• Regional Headquarters (RHQs)
• Regional Operating Headquarters (ROHQs)

Company registration should be made in the following government offices:

• Securities and Exchange Commission (SEC)
• Bureau of Internal Revenue (BIR)
• Local Government Unit 
• If employing, should also register at SSS, PhilHealth Pag-IBIG. 

One-Person Corporation

One-person corporation is a special type of corporation where there’s only one stockholder. Within 15 days, he or she must appoint a corporate secretary (must be a Filipino Citizen) and treasurer (must be a resident, but not necessarily a Filipino citizen). 

For a Filipino stockholder, the capital requirement is $100 or P5000. For a foreign stockholder with more than 60% of the revenue coming from foreign sources, the requirement is also $100 or P5000. However, if a foreign stockholder has 60% of their revenue coming from the domestic market, the requirement is $200,000. 

Key Takeaways

Proper company registration is crucial as it legitimises a business, allows for legal protections, and enables companies to access financial resources and participate in formal economic activities. 

Compliance with registration requirements is vital for maintaining a company's reputation, avoiding legal penalties, and fostering trust with stakeholders, including customers, investors, and the government. 

‍

‍