Doing business in the Philippines

The Philippines has a mixed legal system combining civil law, mainly in civil and commercial codes, with common law influences in procedure and corporate law, under a unitary government in which local government units issue business permits and some local taxes. Key authorities for an incoming business are the Securities and Exchange Commission (SEC), the Bureau of Internal Revenue (BIR), the Board of Investments and the Philippine Economic Zone Authority (PEZA), the Department of Labor and Employment (DOLE), the Bangko Sentral ng Pilipinas (BSP), the Bureau of Customs, the National Privacy Commission, the Intellectual Property Office (IPOPHL) and the Philippine Competition Commission (PCC).

Key facts

Corporate income tax

25% standard; 20% for domestic corporations with assets up to PHP 100 million and net taxable income up to PHP 5 million

VAT

12% standard rate

Main entity form

Domestic corporation registered with the SEC

Foreign ownership

Limits apply to activities on the 13th Foreign Investment Negative List (April 2026)

Foreign exchange

Liberal regime; register investments with the BSP for repatriation

Data protection

Data Privacy Act of 2012, enforced by the National Privacy Commission

New York Convention

Party since 1967 (commercial, reciprocity reservations)

Key labour fact

Mandatory 13th-month payment; security of tenure

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Foreign investors usually form a domestic corporation registered with the SEC, or register a branch or representative office of the foreign company. Full foreign ownership is generally allowed except in activities on the Foreign Investment Negative List, whose 13th edition was issued in April 2026, and foreign-owned companies selling to the domestic market must meet a minimum paid-in capital. Corporations must have a Filipino resident corporate secretary.

Key facts

• Domestic market companies more than 40 percent foreign-owned need USD 200,000 paid-in capital unless a reduction applies.

• A domestic corporation registered with the SEC, which may be a one person corporation, is the usual vehicle, with a Filipino resident corporate secretary.

• Branches and representative offices are alternatives, but a representative office cannot earn income.

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Who handles this in the PhilippinesCorporate & Entity ServicesGovernment & Regulatory AffairsLegal & Contracting

Corporate income tax is 25 percent, reduced to 20 percent for smaller domestic corporations. VAT is 12 percent and non-resident digital service providers must register for it. Payments abroad attract final withholding taxes, branch profit remittances are taxed at 15 percent, and corporations above set thresholds need an annual statutory audit.

Key facts

• Plan for 25 percent corporate income tax, or 20 percent for qualifying smaller domestic corporations.

• VAT is 12 percent and foreign digital service providers must register for it, with a reverse charge for VAT-registered customers.

• Outbound dividends carry 25 percent withholding, or 15 percent under the tax sparing rule or less under a treaty; branch remittances carry 15 percent unless a PEZA exemption applies.

• Corporations with assets or liabilities of PHP 600,000 or more need an SEC statutory audit, and the tax code requires a CPA audit above PHP 3 million of gross receipts.

Who handles this in the PhilippinesTax & International StructuringAccounting, Reporting & Statutory Compliance

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Key facts

• Plan dismissals carefully, as only just or authorised causes with due process are lawful.

Who handles this in the PhilippinesEmployment, Payroll & Mobility

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Tax incentives for registered enterprises in priority activities are granted under the CREATE framework, as amended by the CREATE MORE Act, by investment promotion agencies or the Fiscal Incentives Review Board.

Key facts

• Check whether the sector is still a public utility subject to the 40 percent cap after the 2022 reforms.

• Lease land, for up to 99 years for an approved investment project, or buy condominium units within the 40 percent foreign quota, as land ownership is reserved.

• Confirm the activity is in the Strategic Investment Priority Plan and register with the relevant investment promotion agency for incentives before starting operations.

• Government contracts follow the 2024 procurement law.

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Who handles this in the PhilippinesGovernment & Regulatory AffairsTax & International Structuring

The Philippines has a liberal foreign exchange regime administered by the BSP. Foreign exchange can be bought and sold freely, but foreign direct investments should be registered with the BSP, and portfolio investments through a custodian bank, if the investor wants to buy foreign currency from banks to repatriate capital and remit profits.

Key facts

• Register the foreign investment with the BSP, or through a custodian bank for portfolio investments, to make future repatriation straightforward.

• Prepare corporate and beneficial owner documents for bank onboarding.

• Peso and foreign currency accounts are both available within the banking system.

Who handles this in the PhilippinesPayments, Foreign Exchange & SettlementBanking & Capital AccessFinance & Treasury

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Customs is administered by the Bureau of Customs, and duties depend on classification under the Customs Modernization and Tariff Act. The Philippines is a WTO member and trades under ASEAN agreements, RCEP and bilateral agreements.

Key facts

• Use ASEAN, RCEP and bilateral agreement origin rules to reduce duty.

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• Obtain PS or ICC certification for regulated products before sale.

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• Screen strategic and dual-use goods under the export control law.

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• Duty depends on tariff classification under the Customs Modernization and Tariff Act; seek a Tariff Commission ruling where classification is uncertain.

Who handles this in the PhilippinesTrade, Customs & Supply Chain

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3 statements on rates, thresholds or deadlines are held back until they are checked against an official source.

Key facts

• Appoint a data protection officer and set up breach response processes under the Data Privacy Act.

Who handles this in the PhilippinesTechnology, Data & CyberAccounting, Reporting & Statutory Compliance

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Trademarks, patents and designs are registered with IPOPHL under the Intellectual Property Code. The Philippines is a member of the Paris Convention, the PCT and the Madrid Protocol.

Key facts

• Use Madrid and PCT routes to extend international filings to the Philippines.

• Copyright is automatic, but keep evidence of creation and ownership.

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Who handles this in the PhilippinesIntellectual Property & Brand Protection

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Insolvency and rehabilitation are governed by the Financial Rehabilitation and Insolvency Act.

Key facts

• Check every deal against the PCC thresholds, as notifiable deals cannot close before clearance.

• Listed targets bring SEC tender offer rules.

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• Court-supervised rehabilitation under FRIA is the main restructuring route.

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Who handles this in the PhilippinesTransactions & DealsLegal & Contracting

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Bribery of public officials is criminalised under the Revised Penal Code and the Anti-Graft and Corrupt Practices Act, investigated by the Office of the Ombudsman among others. The Anti-Money Laundering Council implements the Anti-Money Laundering Act, and the Philippines left the FATF grey list in February 2025.

Key facts

• Build controls around dealings with public officials, including gifts and facilitation payments.

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• Expect AML checks from banks and covered persons supervised by the AMLC.

• Removal from the FATF grey list in 2025 eases correspondent banking friction.

Who handles this in the PhilippinesRisk, Compliance & Financial IntegrityLegal & Contracting

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Commercial disputes go to the Regional Trial Courts, some designated as special commercial courts, with appeals to the Court of Appeals and Supreme Court. Arbitration follows the Alternative Dispute Resolution Act of 2004, which is based on the UNCITRAL Model Law, and the Philippines has been party to the New York Convention since 1967, applying it to commercial awards from other contracting states. Foreign judgments can be enforced by action, subject to limited defences.

Key facts

• Use arbitration for cross-border contracts, supported by the Model Law framework and the New York Convention.

• Foreign judgments can be enforced through a new action with limited defences.

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• Corporate, insolvency and IP disputes go to designated special commercial courts.

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Who handles this in the PhilippinesDisputes & Resolution