The Philippines is one of the fastest-growing economies in Southeast Asia. For a long time, the common belief was that you needed a Filipino partner to start a business here. You might have heard about the 60-40 rule, where 60% of a company must be owned by Filipinos.
However, recent changes in the law have significantly opened the doors for international investors. Today, the answer is a definitive yes. You can achieve 100% foreign ownership in the Philippines for many types of businesses.
Navigating the transition from “restricted” to “open” can be confusing. This guide explains how you can own your company entirely, what the requirements are, and how Comply.ph makes this process plug-and-play.
The Legal Shift Toward Open Investment
Recent legislative reforms have changed the landscape for foreign entrepreneurs. These laws were specifically designed to attract global capital by removing the old barriers that forced foreigners into complicated nominee structures.
The Foreign Investments Act Amendments
The amendments to the Foreign Investments Act (FIA) allow you to fully own a domestic market enterprise. Previously, the barriers were high, but now, if your business activity is not on the Negative List, you can hold all the shares yourself.
The Public Service Act (PSA)
In the past, many public services were treated as “public utilities,” which capped foreign ownership at 40%. New laws have redefined this. Major sectors like telecommunications, shipping, and air carriers are now open for 100% foreign ownership.
The Retail Trade Liberalization Act (RTLA)
If you want to open a retail business, the barrier to entry is much lower than it used to be. The minimum paid-up capital for foreign retailers was slashed from $2.5 million to roughly $500,000 (PHP 25 million).
Two Paths to 100% Foreign Ownership
When you decide to incorporate, your path depends on where your customers are. The Philippine government distinguishes between those selling locally and those selling to the global market.
1. Export Enterprises
If your company exports at least 60% of its goods or services, you are an Export Enterprise. This is the gold standard for foreign ownership.
• Ownership: You can own 100% of the shares.
• Capital: There is no high minimum paid-up capital requirement. You can start with as little as PHP 5,000, though more is recommended for operational ease.
• Examples: BPOs, software development for overseas clients, and manufacturing for export.
2. Domestic Market Enterprises
If you plan to sell your products or services to people within the Philippines, you are a Domestic Market Enterprise (DME).
• Ownership: You can own 100% of the shares.
• Capital Requirement: To own more than 40% of a DME, you generally must provide a minimum paid-up capital of $200,000.
• Lowered Threshold: This $200,000 requirement can be reduced to $100,000 if you meet certain conditions:
– You utilize advanced technology, as determined by the government.
– You are endorsed as a startup or startup enabler.
– You hire at least 15 Filipino employees.
Summary of Capital Requirements
The amount of money you need to put into the business depends on your business model. Use the table below to see where you fit.
| Business Category | Foreign Ownership % | Minimum Paid Up Capital |
| Export Enterprise | Up to 100% | No specific minimum (Standard is PHP 5,000+) |
| Domestic Market Enterprise | Up to 40% | No specific minimum |
| Domestic Market Enterprise | 40.01% to 100% | $200,000 (approx. PHP 11.2M) |
| Tech or Startup Domestic | 40.01% to 100% | $100,000 (approx. PHP 5.6M) |
| Retail Trade Enterprise | Up to 100% | PHP 25,000,000 (approx. $446,000) |
Where You Cannot Own 100%
While the Philippines is more open than ever, some areas are still restricted. These are found in the Foreign Investment Negative List (FINL).
Prohibited Industries (0% Foreign Equity)
• Mass Media: Except for recording and internet businesses.
• Practice of Professions: Such as Law or Accountancy (though some professions allow foreigners under reciprocity agreements).
• Small-scale Mining: Reserved for Filipinos.
• Security Agencies: Watchmen and security guard firms.
Restricted Industries (Up to 40% Foreign Equity)
• Land Ownership: Foreigners cannot own land, though you can own 100% of a building or lease land for up to 50 years.
• Public Utilities: Specifically, electricity distribution, water pipeline systems, and seaports.
• Natural Resources: Exploration, development, and utilization.
How to Set Up Your 100% Foreign Owned Company
The process involves multiple government agencies. If you do this manually, you will find yourself jumping between different portals and offices.
Step 1: SEC Registration
You must register with the Securities and Exchange Commission (SEC). You will need to decide if you want a standard Domestic Corporation or a One Person Corporation (OPC). For 100% foreign ownership, you will file an F-100 form.
Step 2: Capital Remittance
If you are starting a Domestic Market Enterprise, you must prove you have remitted the required $200,000 or $100,000. You will need a Bank Certificate of Deposit to show the SEC.
Step 3: Tax and Local Permits
Once you have your SEC certificate, you must register with the Bureau of Internal Revenue (BIR) for your Tax Identification Number (TIN). You also need a Mayor’s Permit from the city where your office is located.
Step 4: Employee Benefits
If you have staff, you must register as an employer with the Social Security System (SSS), PhilHealth, and Pag-IBIG.
Why Comply.ph is the Better Choice
Usually, entrepreneurs hire a lawyer for incorporation, a separate accountant for taxes, and a different firm for payroll. This leads to missed deadlines and confusion.
Comply.ph changes this by providing a plug-and-play compliance system.
One Dashboard for Everything
Instead of chasing people over email, you log into one dashboard. You can see the status of your incorporation, your tax filings, and your payroll in real time.
Automated Bookkeeping and Tax
You do not need to be a tax expert. You upload your receipts and bank statements, and our system handles the rest. We ensure:
• Monthly VAT or Percentage Tax filings.
• Withholding tax compliance.
• Annual tax returns.
• Quarterly filings.
Guaranteed Compliance
We don’t just give you software. You get a dedicated team of CPAs and compliance specialists. If we need a signature or a document, we ask you clearly through the system. If we don’t, the work just happens in the background.
Local Presence Handled
If you need a registered office address or a Corporate Secretary (who must be a Filipino citizen), Comply.ph provides these services as part of our system. You get the legal structure you need without the headache of finding individual providers.
Common Misconceptions About Foreign Ownership
“I need a Filipino partner to start a business.”
This is no longer true for most service and export businesses. As long as you meet the capital requirements for a domestic company, you can own 100% of the shares.
“Incorporation takes six months.”
The old manual way took a long time. With Comply.ph, we use the SEC eSPARC system and our internal workflows to get your company registered in clicks, not months.
“I have to live in the Philippines to be a director.”
You do not need to be a resident to be a director or a shareholder. However, certain officers, like the Corporate Secretary and the Treasurer, must be residents. Comply.ph can help you fill these roles legally.
The Comply.ph Advantage
Running a company in the Philippines should be about growth, not paperwork. We built Comply.ph because we saw too many entrepreneurs fail due to “death by a thousand penalties.”
• No Fixers: We deal directly with government systems.
• Transparent Pricing: You know exactly what you are paying for with no hidden “convenience fees.”
• One Team: Your accountant, your secretary, and your payroll officer all work in the same system.
If you are ready to make your business official, let us handle the bureaucracy so you can focus on your vision.
