Foreign investors are welcome in the Philippines—but not without rules.
As a lawyer handling foreign-owned company registrations, I often remind clients of this key principle:
Foreign ownership is allowed, but only within the limits set by Philippine law.
If you are a foreign national or a Philippine company with foreign shareholders, registration with the Securities and Exchange Commission (SEC) is mandatory—and compliance with foreign ownership rules is critical.
This guide explains the SEC registration rules every foreign-owned company must understand before doing business in the Philippines.
What Is a Foreign-Owned Company Under Philippine Law?
A company is considered foreign-owned if:
More than 40% of its outstanding capital stock is owned by foreign nationals, or
It is 100% foreign-owned, subject to restrictions
Foreign-owned companies must comply not only with SEC rules but also with the Foreign Investments Act (FIA) and related regulations.
100% Foreign Ownership: Is It Allowed?
Yes—but only for certain business activities.
Under the Foreign Investments Act:
Businesses not listed in the Foreign Investment Negative List (FINL) may be 100% foreign-owned
Businesses listed in the FINL are subject to ownership limits or are completely restricted
📌 Legal insight: Many registration delays happen because investors choose activities that exceed allowed foreign ownership.
Common Ownership Limits You Must Know
1. Partially Restricted Industries (Up to 40% Foreign Ownership)
Examples include:
Land ownership
Public utilities
Educational institutions
Certain mass media activities
In these cases:
✔ Filipinos must own at least 60%
✔ Foreign ownership is capped at 40%
2. Fully Restricted Industries
Some industries are completely closed to foreign ownership unless allowed by special laws.
❌ Registration will be denied if ownership rules are violated.
SEC Registration Requirements for Foreign-Owned Companies
Foreign-owned companies must submit all standard SEC documents, plus additional requirements:
Core Requirements:
Approved business name
Articles of Incorporation and By-Laws
Treasurer’s Affidavit
Proof of business address
Valid IDs of incorporators and directors
Additional Requirements for Foreign Owners:
Passport copies (authenticated if required)
Proof of inward foreign remittance
Bank certificate of capital deposit
Compliance with minimum paid-in capital (if applicable)
📌 Failure to prove capital remittance is a common cause of delay.
Minimum Capital Requirements for Foreign-Owned Companies
Generally:
PHP 100,000 minimum capital if exporting at least 60% of goods or services
PHP 200,000 minimum capital if catering to the domestic market
📌 Higher capital may be required if foreign nationals will be employed.
Board and Officer Requirements
A foreign-owned corporation must still comply with:
At least one Filipino director (in most cases)
A resident corporate secretary (must be Filipino)
Compliance with nationality requirements for certain officers
📌 Ignoring officer nationality rules can invalidate registration.
Post-SEC Registration Obligations
SEC approval is only the first legal step. Foreign-owned companies must also register with:
BIR
Local government units (Mayor’s Permit)
SSS, PhilHealth, Pag-IBIG
Immigration authorities (if employing foreign nationals)
Common Legal Mistakes Foreign Investors Make
🚫 Assuming 100% ownership is always allowed
🚫 Ignoring FINL restrictions
🚫 Failing to remit capital properly
🚫 Appointing non-qualified officers
🚫 Skipping post-registration compliance
📌 In foreign investment, assumptions are expensive.
Final Thoughts
Foreign-owned companies can legally and successfully operate in the Philippines—but only if SEC rules and ownership limits are respected.
📌 Proper SEC registration protects your investment, avoids penalties, and ensures smooth business operations.
If you plan to invest or expand in the Philippines, start with the right legal structure and comply from day one.
Navigating the business landscape in the Philippines can be both rewarding and intricate. Whether you’re embarking on a new venture or scaling up, ensuring that your corporate endeavors are in line with local regulations is paramount.
At CBOS Business Solutions Inc., we pride ourselves on simplifying these processes for our clients. As a seasoned professional services company, we offer comprehensive assistance with SEC Registration, Visa processing, and a myriad of other essential business requirements. Our team of experts is dedicated to ensuring that your business is compliant, well-established, and ready to thrive in the Philippine market.
Why venture into the complexities of business registration and compliance alone? Allow our team to guide you every step of the way. After all, your success is our commitment.
Get in touch today and let us be your partner in achieving your business goals in the Philippines.
Email Address: gerald.bernardo@cbos.com.ph
Mobile No.: +639270032851
You can also click this link to schedule a meeting.
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