Business Entry

Options in setting up your business in the Philippines:

  1. Domestic Corporation –  a separate and distinct entity that has its own juridical personality. It may enter into contracts and has the capacity to sue and be sued. The liability of the corporation is separate from the personal properties of the shareholders. (except in cases of fraud)
  2. Branch office –  an extension of a foreign corporation.
  3. Partnership –   it is also a separate and distinct entity that has its own juridical personality. However, the liabilities of the Partnership extend to its general partners.
  4. Sole Proprietorship – a single individual that engages in a business. The liability of the business is the personal liability of the proprietor.
 CorporationBranch OfficePartnershipSole Proprietorship
LiabilitiesSeparate and distinct from its shareholders. Hence, the liabilities are limited to the investment made.Extension of a foreign corporation, hence, liabilities of the branch office also extends to the foreign corporation.Liabilities extends to general partners of the Partnership.Liabilities of the business is considered as personal liabilities of the proprietor.
Number of persons needed in establishingMinimum of 5, Maximum of 15. (Majority must be residents of the Philippines).Only 1 resident agent.Two or more individuals.One.
Capitalization requirement a.) At least 60% Filipino equity = Php 5,000.00.
b.) More than 40% foreign equity = USD 200,000.00.
c.) At least 60% of its revenue is for export = Php 5,000.00.
USD 200,000.00 (additional Php 100,000.00 worth of Securities deposited with the SEC) – Except when business is export related.NoneNone

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