The answer is simply, Yes.
Foreign individuals have the opportunity to own a domestic corporation in the Philippines, with ownership percentages varying depending on the nature of the business. However, it is important to note that certain businesses are subject to restrictions on foreign ownership, and the specific limitations can be found in the Foreign Investment Negative List.
If a business is not included in the Negative List, a foreigner can potentially own nearly 100% of the corporation. However, in such cases, it is necessary to appoint four other directors who will hold at least one share each. Additionally, the corporate secretary and treasurer must be Filipino, although they are not required to be directors or shareholders.
The registration process and costs for incorporating a domestic corporation depend on three factors:
- Number of employees: The cost of registration with the Securities and Exchange Commission (SEC) is 1 1/2% of the inward remittance or paid-up capital of the company. Typically, the registration cost amounts to 3,000 USD, based on a standard paid-up capital of 200,000 USD.
- Utilization of advanced technology: If the business employs more than 50 workers or utilizes advanced technology, the paid-up capital requirement can be reduced to 100,000 USD. However, the use of advanced technology must be validated by the Department of Science and Technology, which may result in a registration delay of up to 6 months.
- Export-oriented business: Companies that are focused on export markets and have more than 70% of their finished products intended for export can benefit from a significant reduction in the required paid-up capital. While the SEC does not specify a precise amount, it is recommended to have at least 5,000 USD in paid-up capital for such businesses.
Furthermore, the Philippines offers various tax incentive programs to attract foreign investors. These incentives aim to encourage investments in priority sectors, regional development, and job creation. The specific incentives and eligibility criteria can be explored through the Philippine Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA).
In summary, foreigners can own a domestic corporation in the Philippines, with ownership percentages dependent on the nature of the business. It is important to review the Foreign Investment Negative List to ensure compliance with ownership restrictions.
The incorporation procedure involves appointing additional directors and adhering to specific registration costs based on factors such as employee count, utilization of advanced technology, and export orientation. Additionally, tax incentive programs are available to attract foreign investment in certain priority sectors.
Instead of undertaking these laborious tasks on your own, you have the option to reach out to us. You can easily get in touch with our business registration Philippines experts by using any of the following methods: filling out the form below, calling us at +63 (02) 8540-9623, or sending an email to firstname.lastname@example.org. This will allow you to schedule an initial consultation without any hassle.