How to Set Up an Entity in the Philippines

Setting up a legal entity in the Philippines is an attractive option for international companies looking to expand into Southeast Asia. The country offers a large, English-speaking workforce, strong consumer demand, and strategic access to the ASEAN market. Recent digitalization efforts by regulators have also made company registration and compliance more accessible for foreign investors.

That said, the process can still feel bureaucratic, particularly around foreign ownership rules, licensing, and tax registrations. Companies must navigate multiple authorities, sector-specific restrictions, and ongoing compliance obligations. However, the benefits are substantial: operating through a local entity provides greater autonomy, long-term cost efficiency at scale, and full control over hiring, revenue generation, and commercial operations.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in the Philippines?

Opening an entity in the Philippines means registering a business with the government to obtain a separate legal personality that can operate, hire employees, pay taxes, and enter into contracts locally.

Entity overview in the Philippines

Here is a summary of the key features of company formation in the Philippines:

Step-by-step guide: How to open an entity in the Philippines

Step 1: Choose the right structure

Foreign companies most commonly establish a Domestic Corporation, which limits liability to invested capital and allows full commercial operations. Branch Offices are extensions of a foreign parent and may generate income locally, while Representative Offices are restricted to non-revenue activities such as liaison and market research.

Step 2: Verify business name availability

Check availability via the DTI Business Name Registration System (BNRS) online. Names must be unique, not misleading, and must include an appropriate suffix such as “Corporation” or “Inc.” Name reservation is completed via the SEC’s Company Registration System on the SEC website.

Step 3: Prepare incorporation documents

The following documents are required for incorporation and can be accessed through the SEC:

• Articles of Incorporation
• By-laws
• Treasurer’s Affidavit
• SEC Registration Data Sheet

Standard templates and filing guidance are available on the SEC’s official forms page.

Step 4: Register with the Securities and Exchange Commission

Incorporation documents are submitted electronically through the SEC portal. Once approved, the company receives a Certificate of Incorporation and an SEC registration number, which formally establishes the entity’s legal existence.

Step 5: Register for tax and social security

After SEC registration, the company must register with the Bureau of Internal Revenue to obtain a Tax Identification Number, authority to print receipts, and VAT registration if applicable. Employers must also register with the Social Security System, PhilHealth, and the Pag-IBIG Fund.

Step 6: Open a corporate bank account

Opening a local corporate bank account requires the Certificate of Incorporation, BIR registration, board resolutions, and KYC documentation for directors and shareholders. Most banks require in-person verification, and timelines typically range from one to three weeks.

Step 7: Set up payroll and employment compliance

To hire employees, companies must implement compliant employment contracts, register for payroll reporting, and ensure statutory contributions and benefits are properly calculated and remitted. Employers must also comply with labor standards enforced by the Department of Labor and Employment.

Discover how Elemental Enzymes accelerated regulatory approvals and market entry with Deel.

Post-registration obligations

After incorporation, companies in the Philippines must stay compliant with local governance, tax, and employment laws. Typical requirements include:

• Tax and financial reporting: File corporate income tax returns, VAT returns, and audited financial statements according to schedules set by the Bureau of Internal Revenue, following Philippine Financial Reporting Standards aligned with IFRS.
• Corporate registers: Maintain up-to-date records of directors, shareholders, and beneficial owners and report changes to the Securities and Exchange Commission within prescribed deadlines.
• Compliance tracking: Monitor tax, licensing, and corporate filing deadlines through a compliance calendar or automated service provider to avoid penalties.
• Licenses and renewals: Renew local business permits and barangay clearances annually with the relevant local government units.
• Recordkeeping: Retain accounting, payroll, HR, and transaction records for at least ten years, as required under Philippine law.
• Employment law compliance: Adhere to labor, benefits, social security, and data-protection regulations, including maintaining compliant employment contracts and timely payroll contributions under DOLE regulations.

Taxes and financial considerations

Key obligations include:

• Corporate income tax: 25%, payable quarterly and annually
• VAT/GST: 12% VAT, with mandatory registration for VAT-able activities
• Payroll/social contributions: Employer and employee contributions to SSS, PhilHealth, and Pag-IBIG based on salary brackets
• Accounting standards: Philippine Financial Reporting Standards (PFRS), aligned with IFRS

Discover how Climate-KIC navigated complex restructuring with Deel.

Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into the United Kingdom—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in the Philippines?
Entity setup typically takes 4–8 weeks. Find out how long setup takes with our Entity Setup Calculator.

What is the minimum capital required?
Minimum capital ranges from PHP 5,000 (≈ USD 90) for locally owned corporations to USD 200,000 (≈ PHP 11,200,000) for most foreign-owned entities, subject to legal exceptions.

Can foreign companies own 100 % of an entity in the Philippines?
Yes, unless the business activity is restricted under the Foreign Investment Negative List.

Do I need a local director or representative?
A majority of directors may be foreign, but the corporation must appoint a resident corporate secretary and treasurer.

How much does it cost to register an entity?
Average setup costs range from PHP 60,000 to 150,000 (≈ USD 1,050–2,650), excluding capital requirements. Find out the setup cost with our Entity Setup Calculator.

Can I hire employees before the entity is fully registered?
Typically, no. However, Deel’s Employer of Record (EOR) lets you hire and pay talent immediately while your entity setup is in progress.

Can Deel help me open an entity in the Philippines?
Yes. Deel Entity Setup manages the end-to-end process — from registration to payroll compliance—in over 100 countries. Deel’s local experts handle documentation, filings, and legal requirements on your behalf.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.