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Last reviewed: 27 September 2026

Many foreign entrepreneurs assume a Philippine business must be 60% Filipino-owned. That is true only in certain sectors. Whether you can own 100% depends on your sector, whether you export, and how much capital you bring in. Here are the rules we check first when a client asks about company registration in the Philippines as a foreigner.

The general rule: up to 100% foreign ownership

The Foreign Investments Act of 1991 (Republic Act No. 7042), as amended by RA 8179 and by RA 11647 (approved March 2, 2022), allows non-Philippine nationals to own up to 100% of a domestic market enterprise, unless foreign ownership is prohibited or limited by the Constitution, by existing law, or by the Foreign Investment Negative List.

The Foreign Investment Negative List

The Negative List is issued by executive order. List A covers activities restricted by the Constitution or specific laws. List B covers restrictions for security, defense, public health and morals, and the protection of small and medium-sized enterprises. Under RA 11647, List B may be amended no more than once every two years.

The current list is the 13th Regular Foreign Investment Negative List, issued as Executive Order No. 113 (s. 2026), which took effect on May 2, 2026. Examples from the list:

• Reserved to Filipinos (0% foreign): mass media (with limited exceptions), practice of most professions, cooperatives, private security agencies and small-scale mining.
• Up to 25% foreign: private recruitment and certain defense-related construction.
• Up to 30% foreign: advertising.
• Up to 40% foreign: activities such as the exploitation of natural resources, ownership of private land, educational institutions (with exceptions) and certain public utilities.

Some entries carry conditions or reciprocity rules, so always check the full text for your exact activity.

The 60/40 rule

Where a sector is capped at 40% foreign equity, the company must qualify as a “Philippine national”. Under the Foreign Investments Act, that means a Philippine corporation in which at least 60% of the capital stock outstanding and entitled to vote is owned and held by Filipino citizens. Using Filipino nominees to hide foreign control is a crime under the Anti-Dummy Law (Commonwealth Act No. 108).

Three common scenarios for foreign investors

(a) Export enterprises

An export enterprise is a manufacturer, processor or service enterprise (including tourism) that exports 60% or more of its output. A trader qualifies if it buys products domestically and exports 60% or more of its purchases.

Under Section 6 of the Act as amended by RA 11647, an export enterprise may be up to 100% foreign-owned, as long as its products and services are not on List A or List B. The US$200,000 minimum capital discussed below applies to domestic market enterprises, not to export enterprises.

A foreign-owned export enterprise must register with the Board of Investments (BOI) and report on its export performance. If it misses the export ratio, the SEC or DTI will order it to cut domestic sales to 40% or less, and continued non-compliance can lead to cancellation of registration. To claim tax incentives, the enterprise must also comply with the incentive rules of the Tax Code (Title XIII, as amended by CREATE and CREATE MORE), typically through registration with an investment promotion agency such as PEZA or the BOI.

(b) Retail trade

Retail trade is governed by the Retail Trade Liberalization Act (RA 8762) as amended by RA 11595 (approved December 10, 2021). Under the amended law, a foreign retailer may engage in retail trade if:

• Paid-up capital: it has a minimum paid-up capital of ₱25 million, which must be maintained in the Philippines at all times unless the retailer notifies the SEC or DTI that it will repatriate its capital and cease operations.
• Reciprocity: its country of origin does not prohibit the entry of Filipino retailers.
• More than one store: a foreign retailer with more than one physical store needs a minimum investment of ₱10 million per store, subject to a proviso for retailers already operating when the law took effect.
• Proof of the capital: the capital must be shown by a certification from the Bangko Sentral ng Pilipinas (BSP) that the funds were inwardly remitted, or by proof that the funds are deposited in a Philippine bank. This proof is needed for registration with the SEC or DTI.

The capital figure is reviewed every three years by the DTI, SEC and NEDA.

(c) Domestic market enterprises with more than 40% foreign equity

Under Section 8 of the Act as amended, micro and small domestic market enterprises with paid-in equity capital of less than US$200,000 are reserved to Filipinos. In practice, a foreign-owned company selling mainly to the local market needs at least US$200,000 in paid-in capital if foreign equity will exceed 40%.

The floor drops to US$100,000 if the enterprise meets one of these conditions:

1. it involves advanced technology, as determined by the Department of Science and Technology;
2. it is endorsed as a startup or startup enabler by the lead host agencies under the Innovative Startup Act (RA 11337); or
3. a majority of its direct employees are Filipinos, and in no case fewer than 15 Filipino employees.

The 15-employee threshold is an RA 11647 change. The earlier version (under RA 8179) required at least 50 direct employees.

Inward remittance and BSP registration. The Act defines “foreign investment” as foreign exchange or other assets actually transferred to the Philippines and duly registered with the BSP. Under BSP rules, registration of the investment is generally needed only if you will later buy foreign currency from Philippine banks to repatriate capital or remit profits and dividends. Funds brought in outside the banking system generally cannot be registered, so wire capital through a bank and keep the inward remittance certificate.

Choosing a business vehicle

• Domestic stock corporation. This is the most common vehicle. Under the Revised Corporation Code, the corporate treasurer must be a Philippine resident and the corporate secretary must be a Filipino citizen and resident.
• One Person Corporation (OPC). An OPC may be formed only by a natural person, a trust or an estate. Banks, quasi-banks, pre-need, trust and insurance companies, and public and publicly listed companies cannot be OPCs. The SEC’s rules (SEC Memorandum Circular No. 7, s. 2019) allow a foreign natural person to form an OPC, subject to constitutional and statutory restrictions and the capital requirements of the Foreign Investments Act.
• Branch office, representative office or regional headquarters. A foreign corporation can also operate through an SEC-licensed branch (which earns income), a representative office (which does not earn income locally) or a regional headquarters that serves affiliates. Each has its own licensing, capital and tax conditions, which our legal team can compare for your plan.

The usual registration steps

1. SEC registration: name reservation, submission of the articles of incorporation and bylaws, and proof of capital.
2. Barangay clearance from the barangay where the office is located.
3. Mayor’s or business permit from the city or municipality, such as the Business Permits and Licensing Office in Cebu City.
4. BIR registration: Certificate of Registration, books of accounts and authority for invoices.
5. Employer registration with SSS, PhilHealth and Pag-IBIG before hiring.
6. Sector-specific licences or incentive registration, where applicable.

If you or your foreign staff will work in the business, plan early for the Alien Employment Permit and a 9(g) work visa. Investors who meet the qualifying investment may also explore a Special Investor’s Resident Visa.

Frequently asked questions

Can a foreigner own 100% of a company in the Philippines? Yes, in most sectors. You can own 100% if the activity is not on the Negative List and, for domestic market enterprises, you meet the US$200,000 minimum paid-in capital (or US$100,000 if you qualify for the lower floor). Export enterprises can be 100% foreign-owned without the US$200,000 domestic market floor.

Can a foreigner set up a One Person Corporation? Yes. SEC rules allow a foreign natural person to form an OPC, but sector restrictions and the Foreign Investments Act capital requirements still apply.

Do I need a Filipino partner? Only in sectors where foreign equity is capped, such as those limited to 40%. Never use a nominee to get around a cap, because dummy arrangements are criminal.

Talk to our legal team

Have your structure reviewed before you wire capital. See our company formation service or contact us. The consultation is free, and fees are quoted per client after we understand your plan.

Book a free consultation · WhatsApp/Viber +63 946 341 4836 · info@bizzurevisa.com

Sources

• RA 11647 (2022), amending the Foreign Investments Act: https://lawphil.net/statutes/repacts/ra2022/ra_11647_2022.html
• RA 7042, Foreign Investments Act of 1991: https://lawphil.net/statutes/repacts/ra1991/ra_7042_1991.html
• RA 8179 (1996): https://lawphil.net/statutes/repacts/ra1996/ra_8179_1996.html
• Executive Order No. 113, s. 2026 (13th Regular Foreign Investment Negative List): https://lawphil.net/executive/execord/eo2026/eo_113_2026.html
• Cruz Marcelo, “Philippines Issues 13th Foreign Investment Negative List”: https://cruzmarcelo.com/philippines-issues-13th-foreign-investment-negative-list-a-calibrated-expansion-of-foreign-investment-opportunities/
• RA 11595 (Retail Trade Liberalization Act amendments): https://lawphil.net/statutes/repacts/ra2021/ra_11595_2021.html
• RA 11232, Revised Corporation Code: https://lawphil.net/statutes/repacts/ra2019/ra_11232_2019.html
• SEC Memorandum Circular No. 7, s. 2019 (One Person Corporations): https://taxacctgcenter.ph/wp-content/uploads/2020/04/SEC-MC-No.-07-s-2019.-OPC-RA-11232.pdf
• Board of Investments, BSP regulations on foreign investments (FAQ): https://boi.gov.ph/ufaq-category/bangko-sentral-ng-pilipinas-regulations-on-foreign-investments/
• Commonwealth Act No. 108 (Anti-Dummy Law): https://lawphil.net/statutes/comacts/ca_108_1936.html

This article is general information, not legal advice. Requirements and fees are set by government agencies and may change without notice.