Starting out › Corporation
Corporation, OPC and foreign offices
A corporation is a separate legal person owned by its shareholders. Under the Revised Corporation Code a single individual can incorporate alone as a One Person Corporation, and corporate life is perpetual by default.
At a glance
Owners
1 (OPC) to 15 incorporators
Personal liability
Limited to shares paid in
Income tax
20% for small domestic corporations, otherwise 25%
Typical set-up
4–8 weeks
What you need
Seven steps to a trading corporation
More work than the other two structures — and the reason your personal assets stay out of it.
Name verification and reservation
Cleared through the SEC and reserved, with the corporate suffix your structure requires — “Inc.”, “Corp.” or “OPC”.
Articles of Incorporation and By-laws
Primary purpose, principal office, capital structure and share classes, incorporators, first directors and officers. An OPC files articles plus a nominee and alternate nominee instead of by-laws.
SEC registration and Certificate of Incorporation
Filed with the treasurer’s affidavit, and a bank certificate of deposit where the activity or foreign equity carries a statutory minimum. The certificate is the corporation’s birth date.
Barangay clearance and mayor’s permit
Zoning, fire safety, sanitary and occupancy clearances at the principal office named in your articles.
BIR registration
Form 1903, Certificate of Registration, books of accounts, and either an Authority to Print or a permit for a computerised accounting system.
Employer registrations
SSS, PhilHealth and Pag-IBIG. Corporate officers drawing compensation are employees for this purpose.
Post-registration housekeeping
Stock and transfer book, minutes book, corporate seal, opening the corporate bank account, and the first board resolutions authorising signatories. Neglected here, it becomes an SEC problem later.
The honest trade-off
What works in your favour
- +Liability is limited to what you paid in — your home and savings sit outside the business.
- +Perpetual existence. The company survives a shareholder’s death, sale or exit.
- +20% income tax where taxable income is ₱5M or less and total assets ₱100M or less, excluding land.
- +Shares can be issued or transferred, so investors and successors come in cleanly.
- +Strongest standing with banks, government tenders and large corporate clients.
- +An OPC gives a single owner the same limited liability without finding co-incorporators.
What you are taking on
- −Highest cost and the longest lead time of the three structures.
- −Real annual compliance: general information sheet, audited financial statements, board and stockholder meetings, minutes kept properly.
- −Profits are taxed at corporate level, then dividends are taxed again in the shareholder’s hands.
- −Directors and officers can be held personally liable where filings and taxes are neglected.
- −Decisions need resolutions. You cannot simply act as the owner and move on.
- −Closing one down is a long formal process, not a lapsed permit.
Best for
Businesses taking on real contracts, employing staff, borrowing, raising outside money or intended to outlive their founders — and any single owner who wants that protection without partners.
For foreign parent companies
Representative office or branch office
Both let an existing foreign corporation operate here under its own name rather than forming a new Philippine company. The dividing line is simple: whether the office earns income in the Philippines.
Representative office
A local presence that deals with the parent company’s customers but earns nothing here. It is fully funded by head office.
Capital
Inward remittance of USD 30,000 to register, and the same each year for operating costs
Tax
No income tax, since there is no Philippine income — but payroll withholding and returns still apply
Allowed to do
Information dissemination, promotion of the parent’s products, and quality control of goods for export
Not allowed
Any income-generating activity, including invoicing local customers
Pros
- +Lowest capital threshold of the foreign-entity options
- +No Philippine income tax exposure
- +A legitimate way to build local presence and support before committing to trade
Cons
- −Cannot earn a peso locally — every contract is signed by head office
- −The annual USD 30,000 remittance is a standing obligation, not a one-off
- −Head office remains liable for everything the office does
Branch office
The same foreign company carrying on its business here. Profits belong to the parent, and so do the liabilities.
Capital
USD 200,000 inward remittance; USD 100,000 where advanced technology is used or 50 or more Filipinos are employed; export enterprises selling at least 60% abroad register at a nominal amount
Security deposit
SEC-acceptable securities of at least ₱500,000 lodged within 60 days of the licence, topped up as revenues grow
Tax
25% on Philippine-sourced income, plus a 15% branch profit remittance tax on profits sent to head office
Allowed to do
Full commercial activity, within the parent’s registered purpose and the Foreign Investment Negative List
Pros
- +Trades and invoices locally under the parent’s own established name
- +No need to find Philippine incorporators or issue local shares
- +Reduced capital thresholds for technology-driven and export-oriented operations
Cons
- −No liability shield — the parent company answers for the branch in full
- −Highest capital requirement of the routes on this page
- −Branch profit remittance tax on top of corporate income tax
- −Restricted sectors on the Negative List may be closed to it entirely
Both require an SEC licence to transact business, a resident agent, the parent’s board resolution and audited financial statements, proof of inward remittance, and the same LGU and BIR registrations as any local business.
Incorporating, or bringing a foreign company in?
We draft the articles, run the SEC filing, complete the LGU and BIR sequence, and set up the books and statutory records so your first year of compliance starts clean.
Capital thresholds, tax rates and agency requirements change. The figures on this page are a guide, not advice on your specific case — confirm current requirements with us before you file.