Setting up a corporate entity in the Philippines requires registering with the Securities and Exchange Commission (SEC) through the eSPARC (Electronic Simplified Processing of Application for Registration of Company) platform. While the initial portal is the same, the structural path varies significantly depending on whether your company is Domestic (Filipino-owned) or Foreign-Owned.
- Ownership and Equity Rules
- Domestic Corporation: May have up to 100% Filipino ownership. Under the Revised Corporation Code, a corporation can be established by 1 to 15 incorporators, including the option for a One Person Corporation (OPC).
- Foreign-Owned Corporation: Defined as an entity with more than 40% foreign equity. Subject to the Foreign Investments Act (FIA) and the Foreign Investment Negative List (FINL).
- Standard minimum paid-in capital for foreign-owned domestic market enterprises is US $200,000.
- The threshold can drop to US $100,000 if the business involves advanced technology or employs at least 50 direct Filipino employees.
- Registration Process via eSPARC
- Name Reservation: Reserve your company name through the eSPARC online portal.
- eSPARC Application:
- Domestic Corporations: Eligible for fast-track processing (such as OneSEC for qualified domestic stock corporations).
- Foreign Corporations: Processed under the Regular eSPARC track, requiring additional documentary upload and validation.
- Document Preparation: Generate and notarize the Articles of Incorporation, By-Laws, and Treasurer’s Affidavit.
- SEC Payment & Certificate Issuance: Pay registration fees online or via SEC payment channels to receive the digital Certificate of Incorporation.
Key Takeaway for Expansion
Domestic entities can get approved in as fast as 1 to 3 days using eSPARC’s OneSEC system, whereas foreign entities should budget 2 to 4 weeks due to capital verification and FIA compliance checks.
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