One of the most common questions foreign entrepreneurs ask is:
“Can I fully own a company in the Philippines?”
The short answer in 2026 is: Yes — in most service-based industries, 100% foreign ownership is allowed.
However, the answer depends on:
- Your type of business activity
- Your target market (local vs export)
- Your capitalization structure
- Compliance with Philippine laws
This guide explains everything in clear, practical terms.
Is 100% Foreign Ownership Legal in the Philippines?
Yes — but with conditions.
Foreign ownership rules are primarily governed by:
- The Revised Corporation Code
- The Foreign Investments Act
- The Foreign Investment Negative List (FINL)
Companies are registered with the Securities and Exchange Commission (SEC).
If your business activity is not listed in the Negative List, then full foreign ownership is generally allowed.
What Is the Foreign Investment Negative List?
The Foreign Investment Negative List (FINL) is a list of industries where:
- Foreign ownership is restricted, or
- Foreign participation is prohibited
Examples of restricted industries include:
- Mass media
- Small-scale mining
- Certain retail activities
- Public utilities (subject to equity caps)
However, most service-based industries are open to 100% foreign ownership, especially:
- IT and software development
- Business process outsourcing (BPO)
- Accounting support
- Marketing services
- Administrative support
- Consulting services
If your Philippine company provides services to clients abroad, it is typically considered an export-oriented enterprise, which strengthens eligibility for full foreign ownership.
Domestic Market vs Export Enterprise
This distinction is important.
Export Enterprise
If your Philippine company earns income from foreign clients or a foreign parent company, it is generally classified as an export enterprise.
Advantages:
- 100% foreign ownership is usually allowed
- Lower regulatory barriers
- No retail restrictions
This is common for:
- Offshore support teams
- Back-office hubs
- IT development centers
- Shared service operations
Domestic Market Enterprise
If your company will sell primarily to customers inside the Philippines, additional capital requirements may apply.
For certain domestic enterprises, minimum paid-up capital may be required if foreign ownership exceeds specific thresholds.
This is why proper planning at the incorporation stage is critical.
What Corporate Structure Should You Choose?
Foreign investors typically choose one of the following:
A. Domestic Corporation
The most common and flexible structure.
Requirements:
- Minimum of 2 incorporators (unless OPC)
- Board of Directors
- Corporate officers
- Registration with the Securities and Exchange Commission
This is ideal if:
- You plan to hire employees
- You want long-term operations
- You want liability protection
B. One Person Corporation (OPC)
Suitable if there is only one shareholder.
Advantages:
- No board required
- Simpler governance
- Faster decision-making
OPCs are also registered with the Securities and Exchange Commission.
C. Branch Office
A branch is an extension of your foreign company.
Key features:
- No separate legal personality
- Parent company assumes liabilities
- Requires capital remittance
This is ideal if:
- You want direct operational extension
- You do not want a separate Philippine entity
Minimum Capital Requirements in 2026
Capital requirements depend on your business activity.
For most service-based export enterprises:
- There is generally no high minimum capital requirement
- Capital may be structured based on operational needs
For domestic market enterprises with foreign ownership, capital rules may vary.
Proper structuring ensures compliance and avoids regulatory issues later.
Registration Process Overview
Step 1: Reserve the company name
Step 2: Draft Articles of Incorporation
Step 3: Submit documents to the Securities and Exchange Commission
Step 4: Secure Certificate of Incorporation
Step 5: Register with the Bureau of Internal Revenue
Step 6: Obtain local business permits
After registration, you must also:
- Register books of accounts
- Secure authority to issue official receipts
- Comply with tax filings
The process typically takes 2–4 weeks with complete documentation.
Foreign investors may engage professional company formation services in the Philippines to handle SEC, BIR, and business permit registration efficiently.
Hiring Employees in a 100% Foreign-Owned Company
Once incorporated, your Philippine company becomes the employer of record for local staff.
You must register with:
- Social Security System
- PhilHealth
- Home Development Mutual Fund
Employer responsibilities include:
- Payroll computation
- Withholding tax remittance
- 13th-month pay
- Leave benefits
- Employment contracts
This structure gives you full operational control over your support team.
Taxation of a 100% Foreign-Owned Corporation
A Philippine corporation is taxed the same way regardless of ownership:
- Corporate Income Tax (25% or 20% for qualified SMEs)
- VAT (12%) if applicable
- Withholding taxes
- Local business taxes
If services are rendered to foreign clients and paid in foreign currency, VAT zero-rating may apply, subject to documentation requirements.
Annual obligations include:
- Filing income tax returns
- Submitting audited financial statements (if applicable)
- Filing SEC General Information Sheet
Non-compliance results in penalties and possible suspension.
Common Misconceptions
❌ “Foreigners cannot fully own a company in the Philippines.”
✔️ In most service industries, they can.
❌ “You need a Filipino nominee shareholder.”
✔️ Not necessarily, if the activity is not restricted.
❌ “Minimum capital must be very high.”
✔️ This depends on business classification.
❌ “It’s better to hire contractors instead.”
✔️ Misclassification risks may create legal exposure.
Why Foreign Investors Choose Davao City
While Metro Manila remains popular, Davao City offers:
- Lower operational cost
- Competitive salary levels
- Growing skilled workforce
- Less congestion
- Business-friendly local environment
For foreign-owned service enterprises and offshore support teams, Davao is increasingly strategic.
Final Thoughts: Is 100% Foreign Ownership Right for You?
If you are:
- Building a long-term offshore support team
- Creating a shared services center
- Establishing an IT or BPO hub
- Expanding operations in Southeast Asia
Then forming a 100% foreign-owned Philippine corporation in 2026 is not only possible — it may be one of your most strategic moves.
The key is proper legal structuring, regulatory compliance, and professional guidance from the outset.
Frequently Asked Questions (FAQ)
1. Can a foreigner own 100% of a company in the Philippines?
Yes, foreigners can own 100% of a Philippine corporation in most service-based industries, provided the activity is not listed in the Foreign Investment Negative List.
2. Is a Filipino nominee shareholder required?
Not necessarily. If the business activity allows full foreign ownership, a Filipino nominee shareholder is not required under Philippine law.
3. What is the minimum capital for a 100% foreign-owned company?
Minimum capital depends on the business classification. Export-oriented service companies generally have flexible capital requirements, while domestic market enterprises may have higher thresholds.
4. How long does incorporation take in the Philippines?
Incorporation typically takes 2–4 weeks, depending on the completeness of the documents and SEC processing times.
5. Can a 100% foreign-owned company hire Filipino employees?
Yes. Once registered, the company becomes a legal employer and must comply with labor laws, payroll taxes, and statutory contributions.
6. What taxes apply to foreign-owned corporations?
Foreign-owned corporations are taxed the same as local corporations, including corporate income tax, VAT (if applicable), and withholding taxes.
7. Is it better to incorporate or use an Employer of Record (EOR)?
Incorporation is ideal for long-term operations and full control. EOR services are suitable for short-term hiring or market testing.
