Philippines incorporation is challenging and most entrepreneurs engage a professional corporate services company to handle incorporation and business set up tasks on their behalf. The following is an overview of the key legal, regulatory and economic aspects related to Philippines incorporation.

In accordance with the Philippines Foreign Investments Act 1991, the minimum paid-up capital for a corporation considered a Domestic Market Enterprise (DME) or one where the foreign equity exceeds 40% is US$200,000, which must be remitted into the Philippines prior to incorporation. Exemptions from this high capital requirement are granted to export-orientated DMEs or those employing advanced technology. 

In accordance with Philippines corporate law, every company requires a company secretary and registered office in the Philippines.

Philippines incorporation applications are lodged with the SEC.

A Philippines company located outside a Special Economic Zone (SEZ) is subject to a corporate tax of 32% on global income. Following Philippines incorporation, it is necessary to submit an annual return to the Philippines Bureau of Internal Revenue.

Under the Philippines Tax Code, cash dividends received by a Philippines company from another domestic or resident foreign corporation are legally tax-exempt. If the recipient is a non-resident foreign corporation the cash dividends are subject to a withholding tax of 35%.  Final withholding tax will be reduced to 30% by January 1, 2009.

Following incorporation, every Philippines company is required to register for value added tax (VAT) at the Bureau of Internal Revenue if sales exceed 1.5 million pesos (US$33,000) in a year.