How To Register a Domestic Corporation in the Philippines

A domestic corporation is a business entity organized, registered, and existing under Philippine law. It is an artificial being created by operation of law, with a juridical personality separate and distinct from its stockholders and from any other corporation to which it may be connected.

The governing statute is no longer the old 1980 Corporation Code — it is Republic Act No. 11232, the Revised Corporation Code of the Philippines (RCC), signed into law on February 21, 2019. The RCC modernized nearly every aspect of incorporation, and several of its changes (plus later tax and foreign-investment reforms) materially change what founders need to know versus what older guides describe.

The Philippines has no direct equivalent of an LLC or a Private Limited Company, but a domestic corporation serves the same practical purpose: it incurs its own liabilities, sues and is sued in its own name, and its stockholders are liable only to the extent of their subscribed share capital. A domestic corporation’s juridical personality begins only once the Securities and Exchange Commission (SEC) issues a Certificate of Incorporation — the SEC being the agency that supervises the formation and ongoing compliance of all corporations in the country.

Key Changes Under the Revised Corporation Code

Founders relying on older guides should specifically note these changes from the pre-2019 rules:

Incorporators: Who Can Form a Corporation

Under Section 10 of the RCC, an ordinary domestic stock or non-stock corporation now requires at least 2 and not more than 15 incorporators. They may be:

• Natural persons of legal age;
• SEC-registered partnerships;
• SEC-registered domestic corporations or associations; or
• Foreign corporations (subject to constitutional and statutory restrictions on foreign participation, and subject to submitting an authenticated/apostilled board resolution authorizing the investment).

Each incorporator who is a natural person must:

• Be of legal age and hold a Tax Identification Number (TIN) — foreign nationals must secure one from the BIR;
• Subscribe to or own at least one (1) share of capital stock;
• Sign the Articles of Incorporation, indicating the capacity in which they sign.

There is no more requirement that a majority of incorporators reside in the Philippines, and incorporators are no longer restricted to natural persons.

The One Person Corporation (OPC)

A notable RCC innovation is the One Person Corporation, which allows a single stockholder — a natural person, trust, or estate — to incorporate without needing any co-incorporators. An OPC:

• Has a single stockholder who also typically serves as sole director and president;
• Must appoint a nominee and an alternate nominee who would take the stockholder’s place in the Articles in case of death or incapacity;
• Is registered through the same SEC eSPARC/OneSEC system used for ordinary corporations, with fields specific to OPCs;
• Foreign natural persons may form an OPC, subject to statutory and constitutional foreign-ownership limits applicable to the intended business activity; licensed professionals generally cannot form an OPC to practice their profession, unless a special law allows it.

Capital Requirements

The RCC removed the general statutory minimum for authorized and paid-up capital stock, except where a special law requires a specific amount (e.g., banks, lending and financing companies, insurance companies, recruitment agencies, and pre-need companies still carry sector-specific minimums).

That said, the SEC’s practical subscription-and-payment rule still applies at incorporation:

• At least 25% of authorized capital stock must be subscribed; and
• At least 25% of the subscribed capital must be actually paid up.

Foreign equity changes this baseline. Under the Foreign Investments Act (RA 7042, as amended, most recently by RA 11647 in 2022), a domestic market enterprise with more than 40% foreign equity generally needs a minimum paid-in capital of USD 200,000, reduced to USD 100,000 if the enterprise uses advanced technology (as certified by the DOST), is endorsed as a startup or startup enabler under the Innovative Startup Act, or meets a reduced Filipino-employment threshold. Export enterprises — those exporting at least 60% of output — face no minimum capitalization requirement at all. Retail trade has its own separate capital rules under the Retail Trade Liberalization Act (see below).

Step-by-Step Registration Process

Registration is now largely digital through the SEC’s Electronic Simplified Processing of Application for Registration of Company (eSPARC) platform, which includes two tracks:

1. OneSEC with SEC ZERO — for straightforward domestic stock corporations (including OPCs) with common shares, cash subscription, and no need for government clearances; this track can issue a digitally signed Certificate of Incorporation within one day.
2. eSPARC Regular Processing — for corporations needing regulatory clearances, non-cash subscriptions, or falling outside ZERO’s automated criteria; typically 3–7 business days.

The general sequence:

1. Name verification and reservation with the SEC (valid 30 days).
2. eSECURE account and identity verification for each incorporator/signatory (government ID plus a live photo capture), and electronic signing through the SEC’s Electronic Submission Authentication Portal (eSAP).
3. Submission of the Articles of Incorporation and By-laws, along with:
   • Treasurer’s Affidavit;
   • Bank Certificate of Deposit evidencing paid-up capital;
   • Registration Data Sheet / Beneficial Ownership Declaration;
   • Endorsements or clearances from other government agencies, where the activity requires them (e.g., banking, insurance, financing).
4. Payment of filing fees through the SEC’s online payment gateways.
5. Issuance of the Certificate of Incorporation, now typically digital and QR-coded.
6. Registration with the Bureau of Internal Revenue (BIR) for a Certificate of Registration (BIR Form 2303) and official TIN. Since the Ease of Paying Taxes Act (RA 11976, effective January 2024), businesses no longer pay the old ₱500 Annual Registration Fee, and the Certificate of Registration no longer needs annual renewal.
7. Local government registration — Barangay Clearance and Mayor’s/Business Permit from the city or municipality where the business will operate.
8. Secondary licenses, if the business operates in a regulated sector (banking and finance, lending, insurance, pharmaceuticals, recruitment, etc.).
9. Employee-related registrations, within 30 days of hiring the first employee:
   • Social Security System (SSS);
   • Philippine Health Insurance Corporation (PhilHealth);
   • Home Development Mutual Fund (Pag-IBIG).

Because eSPARC is now integrated with the Philippine Business Hub, company information entered at SEC registration can carry over automatically to BIR, SSS, PhilHealth, and Pag-IBIG registration, cutting out a significant amount of duplicate paperwork compared to the pre-2021 process.

Ongoing Compliance (Not a One-Time Event)

Registering the corporation is the beginning of a recurring compliance calendar, not the end of it:

• General Information Sheet (GIS) — filed with the SEC annually, and also within 30 days of any change in directors, officers, or stockholdings.
• Audited Financial Statements (AFS) — filed annually with the SEC and BIR.
• Beneficial Ownership Declaration — required as part of the GIS, identifying the natural persons who ultimately own or control the corporation.
• Annual Income Tax Return (BIR Form 1702) and quarterly returns (Form 1702Q), even for corporations with no income or tax due in a given period.
• Corporations “vested with public interest” (e.g., publicly listed companies, certain large or highly regulated firms) must also appoint a Compliance Officer, an RCC-mandated corporate officer role in addition to the President/CEO, Treasurer/CFO, and Corporate Secretary.

Classifying Domestic Corporations by Ownership

Domestic corporations are still commonly classified by the proportion of Filipino versus foreign equity:

• 100% Filipino-owned — free to participate in any lawful economic activity not otherwise restricted by law (e.g., practice of a licensed profession).
• 0.01% to 40% foreign equity — treated substantially the same as a Filipino corporation for most nationality-based restrictions, since Filipino stockholders retain control.
• More than 40% to 100% foreign equity — restricted to activities not reserved for Philippine nationals, and subject to the paid-in capital thresholds discussed above.

The nationality-based restrictions on what a foreign-owned corporation may do are set out in the Foreign Investment Negative List (FINL), issued by the President every two years on the recommendation of NEDA. As of this writing, the operative list is the 13th Regular Foreign Investment Negative List, promulgated by Executive Order No. 113 and effective May 2, 2026, superseding the 12th list (2022). Key points:

• List A covers activities restricted by the Constitution or specific statutes (e.g., mass media, land ownership, and — subject to a 40% cap — public utilities and natural resource exploration). These caps cannot be changed by executive order alone.
• List B covers activities restricted for reasons of national security, defense, public health/morals, or protection of small and medium Filipino enterprises; these can be revised roughly every two years.
• Recent liberalization has expanded foreign participation in telecommunications and other services reclassified from “public utilities” to “public services” under the amended Public Service Act (RA 11659), and in renewable energy.
• Retail trade has its own regime under the Retail Trade Liberalization Act (RA 8762, as amended by RA 11595): a foreign retailer generally needs at least ₱25 million in paid-up capital, with at least ₱10 million invested per physical store, and the investor’s home country must not bar Filipino retailers.
• Related reform: RA 12252 (2025) now allows qualified foreign investors to lease private land for up to 99 years, a major change for foreign-invested projects that previously had to structure around the 50-year lease cap.

Any activity not listed on the FINL is generally open to up to 100% foreign ownership, subject to the applicable capitalization rules and any sector-specific licensing.

Corporate Income Tax

Since the CREATE Act (RA 11534, 2021) and its follow-on, the CREATE MORE Act (RA 12066, 2024), corporate income tax rates are:

• 25% standard rate on net taxable income, for domestic and resident foreign corporations; and
• 20% preferential rate for domestic corporations whose net taxable income does not exceed ₱5 million and whose total assets do not exceed ₱100 million (excluding land) — commonly referred to as the MSME rate.
• A 2% Minimum Corporate Income Tax (MCIT) on gross income applies from the corporation’s fourth taxable year onward, whenever it exceeds the regular income tax due; excess MCIT is creditable against regular tax for the following three years.

Registered enterprises operating through PEZA, BOI, or other Investment Promotion Agencies may instead qualify for an income tax holiday followed by a 5% special rate on gross income (in lieu of most national and local taxes), under the enhanced incentive framework introduced by CREATE MORE.

Practical Notes for Founders

• Choose the right vehicle first. A solo founder no longer needs to recruit filler incorporators — an OPC may be simpler, though it carries its own governance quirks (nominee/alternate nominee, restrictions on banks, insurance companies, and public companies from using the OPC structure).
• Match your paid-in capital to your foreign-ownership plan early. Under-capitalizing a foreign-owned entity is one of the most common and expensive mistakes; the USD 200,000/100,000 thresholds are assessed at the time of registration and revisited by regulators later.
• Confirm your activity against the current FINL before drafting the Articles of Incorporation — the primary purpose clause and equity structure both need to match what the business will actually do, since SEC and other regulators look at actual operations, not just the stated purpose.
• Budget for recurring compliance, not just the initial registration fee — GIS and AFS filings, beneficial ownership disclosures, and tax returns are annual obligations with real penalties for missed deadlines.

This article is for general informational purposes and reflects Philippine law and SEC/BIR practice as of mid-2026. It is not a substitute for advice from a Philippine lawyer or accountant, particularly given how frequently capitalization thresholds, the Foreign Investment Negative List, and BIR procedures are revised.