Basic Requirements for Different Types of Business in the PH

April 16, 2018

Setting up, registering, and starting a business in the Philippines isn’t hard if you have the help of the right people. Here’s a quick guide on the different types of business entities you can register your business in the Philippines:


  1. Sole Proprietorship – a single individual that engages in a business. The liability of the business extends to the personal asset of the proprietor.
  2. Partnership – has a separate and distinct entity that has its own juridical personality. However, the liabilities of the Partnership extend to its general partners.
  3. Branch Office – an extension of a foreign business entity.
  4. 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 and distinct from the personal assets of the shareholders. (except in cases of fraud)
  5. Domestic Corporation – at least sixty percent (60%) of the capital of the company is owned by Filipinos
  6. Foreign Corporation – if forty-one percent (41%) or more of the company’s capital is owned by non-Filipinos



Below is a summary of the basic requirements (including minimum capitalization) for each type of business entity:


Corporation Branch Office Partnership Sole Proprietorship
Liabilities Separate 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 establishing Minimum of 5, Maximum of 15. (Majority must be residents of the Philippines) Only 1 resident agent Two or more individuals One
Capitalization requirement at least 60% Filipino equity = 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 None None
more than 40% foreign equity = USD 200,000.00
at least 60% of its revenue is for export = Php 5,000.00



At Yap & Associates Law, we offer professional assistance in establishing or setting up business entities (both local & foreign) intending to do business in the Philippines. This includes registration with the Philippine Securities & Exchange Commission or Department of Trade and Industry (whichever is applicable), Bureau of Internal Revenue, and obtaining the necessary permits and licenses from the local government unit and other concerned government agencies.


For more information on how we can further help you register your business in the Philippines successfully, contact Yap & Associates Law at info@yaplawoffice.com or +632 218-6558.