How To Open A Business In The Philippines With A Foreigner


The glistening beauty of the Pearl of the Orient Sea has attracted more and more foreign investors to the land. In fact, the Philippines is one of the fastest growing economies in East Asia according to the World Bank. Its economy grew from 3.9% in 2011 to 6.6% in 2012. The strategic location of the Philippines in the Asia-Pacific region acts as a gateway to other competitive Asian economies.


The abundance of business investors in the Philippines is also due to its rich natural and labor resources. What makes the country special is the latter. It is blessed with a talent pool filled with competent, bilingual, resilient, dedicated, and trainable individuals. This is why it is among the top destinations of the roaring BPO sector.


Starting a new business in the Philippines is a challenging task. Adding one’s nationality into the mix makes it more confusing. You can either be a Philippine citizen who opens a business with a foreigner or a foreigner who collaborates with a Philippine citizen.


If you are interested in opening your own business establishment in the Philippines, you must consider all the aspects. There are several rules and regulations that you need to abide regardless of your nationality. Furthermore, there are different categories of business that you must choose from! Start by knowing which type of business suits your idea best:


1. Sole Proprietorship


Definition: The simplest of its types and the easiest to register is the Sole Proprietorship. This type of business is recommended if you are opening a small business with a Filipino or Filipina spouse. It provides total ownership to an individual as the assets is named after him or her alone. Thus, the sole proprietor will answer to all the losses and liabilities when the business goes downhill.

   sole proprietorship  

The foreigner’s main role is to finance the operations.


Process: First, the applicant shall register for a business name at the Department of Trade and Industry (DTI). Visit to know where is the nearest DTI office and to download the application forms. Second, Applicants are required to be at least 18 years old and to be a legitimate Philippine citizen.


If your name appears to be of foreign origin, you will be mandated to submit a proof of your citizenship. Third, you shall prepare two recent ID photographs with your signature at the back of each copy. Lastly, you must pay for the processing fee and the documentary stamp.


2. Partnership


Definition: To have more authority over the business, you can register as a Partnership. A partnership is comprised by two or more individuals. The involved individuals have the rights and accountabilities to the affairs of the business.


Process: You can either register at the DTI or the Securities and Exchange Corporation (SEC). Registering at the SEC is only for partnerships with a capital of PHP 3,000 or more. Consider hiring a lawyer to set up an appropriate partnership agreement for your business.


3. Corporation


Definition: For a significant and large-scale business, a corporation is most suitable. The foreigner can act as the sole authorized signer on the bank account and own up to 40% of the business in order to efficiently control the corporation.


Process: A minimum of five incorporators are needed to form a corporation. Once these incorporators are identified, they must own at least one share of the business. In general, foreigners cannot own more than 40% of the total shares. Hiring a lawyer to prepare the articles and the bylaws of the corporation is the next step. Then, you must register at the SEC with a minimum capital of PHP 5,000.

  The three categories above assume that the foreigner holds an appropriate visa to do business in the Philippines. Although it is feasible to establish a biz with a foreigner, there are ample requirements. This is why it is recommended to seek the help of the professionals such as lawyers and accountants.
Anna Agoncillo

Anna is a Registered Psychometrician and a graduate of Cardiff Metropolitan University, United Kingdom. Earning a bachelor's degree with honors in Psychological Studies, lead her to a career of writing and teaching. She is also the author of the new book entitled Psychology of Love, Money, & Life.

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