A domestic corporation in the Philippines, also known as a limited liability corporation (LLC), offers several key advantages for businesses:

1. Limited Liability – The primary benefit of a domestic corporation is the limited liability it provides to shareholders. Shareholders’ liability is limited to the extent of their capital contribution, protecting their personal assets from the company’s debts and obligations.
2. Flexible Ownership Structure – Domestic corporations in the Philippines can have up to 100% foreign ownership, subject to certain industry restrictions. This makes them an attractive option for foreign investors looking to establish a business presence in the country.
3. Tax Considerations – Domestic corporations are subject to standard corporate income taxes, withholding taxes, expanded withholding taxes, and value-added tax (VAT). Depending on the nature of the business, they may also be eligible for various tax incentives.
4. Capitalization Requirements – Domestic corporations may have a minimum capitalization of PHP 5,000 if they are export-oriented and do not have specific capital requirements under the Negative List.
5. Incorporation Process – The incorporation process for a domestic corporation involves submitting the required documents to the Securities and Exchange Commission (SEC), including the Articles of Incorporation, By-laws, and other supporting documents. While the process can be complex, enlisting the assistance of a professional lawyer can help ensure a smooth and efficient incorporation.

Overall, the domestic corporation structure in the Philippines offers a robust and flexible option for businesses, particularly for foreign investors looking to establish a presence in the country while limiting their personal liability.

In the event that you are planning to establish a company in the Philippines, our group of legal professionals is here to assist you.

Given our vast experience in the field of corporate law, we are able to offer expert guidance regarding the prerequisites and processes that must be followed in order to form a domestic corporation in the Philippines.

We are able to assist in streamlining the process of incorporation and helping you achieve your goals. This includes creating the relevant documents, such as the Articles of Incorporation and By-laws, as well as ensuring compliance with regulatory standards.

To find out more about the ways in which we can help you establish your company in the Philippines, feel free to contact our team.

Regularly monitor any changes in the law or new regulations regarding business registration in the Philippines.

Sometimes, the SEC, DTI, LGU or BIR issue new rules and regulations, implement new laws, or abolish old ones – and it’s your responsibility to know these. Attend seminars, undergo training, or continuously seek the advice of professionals. It’s not enough that you have a vast knowledge of how to register a business in the Philippines, you also have to stay updated.

You might have complied with all the requirements in registering a business, but this does not guarantee that your business will not come across any future problems. In a worst-case scenario, you may see your business’ permit or license being revoked because you did not follow how the new changes affect your business operations.

When it comes to establishing a business in the Philippines, entrepreneurs have a range of options to choose from, each with its own unique characteristics and advantages. Understanding these different business structures can help you make an informed decision that aligns with your goals and requirements.

The sole proprietorship is the most basic and straightforward business structure in the Philippines. It is typically seen in small-scale operations. In a sole proprietorship, the owner is solely responsible for the business’s liabilities, debts, and losses, making it a simple and flexible option for those starting out.

A partnership business structure is formed by two or more people who agree to work together to generate profits. Typically, professionals such as lawyers, accountants, and consultants are the ones that initiate partnerships.

Alternatively, partnerships can be created by small to medium-sized enterprises operating in a variety of industries that are looking to combine their resources and expertise for mutual gain. Partners contribute to the company through skills, funding, labor, or other resources, and they share the revenue when sales are generated.

Corporations in the Philippines require a minimum of 15 people to establish and are legally treated as a separate entity from the stockholders who own the corporation. This structure offers limited liability, meaning the stockholders’ personal assets are protected from the company’s debts and obligations.

The one-person corporation (OPC) is a unique business structure that combines the best aspects of a corporation and a sole proprietorship. An OPC has only one stockholder, who can be a natural person, trust, or estate.

This structure provides the benefits of limited liability while allowing the sole stockholder to maintain complete control over the business.

Forming a limited liability corporation (LLC) offers business owners the advantage of protecting their personal assets from business debts and liabilities.

These are just a few of the business structures available in the Philippines. Each option has its own set of advantages and considerations, and the choice will depend on the specific needs and goals of the business.

Consulting with our experienced legal professionals can help you navigate the complexities of business incorporation and ensure you select the most suitable structure for your venture in the Philippines.