Philippine Business Entity Types for Foreigners — Comparison

Choosing your entity is the first and most consequential decision a foreign founder makes in the Philippines. It drives your paid-in capital, your liability exposure, whether you can earn income locally, and how much of the company you can own. Get it right and everything downstream — registration, banking, tax — follows cleanly. This page is the structured decision matrix. For a narrative walk-through of trade-offs, read our guide to the best entity type for foreigners.

Comparison at a glance

Which one fits

A domestic corporation is the standard operating vehicle. It is a separate legal entity with limited liability, formed by 2 to 15 incorporators with a majority-resident board. Foreign Investments Act capital rules apply — typically around US$200,000 of paid-in capital when you serve the domestic market with more than 40% foreign ownership, and far less when the activity is export-oriented or open on the Negative List. This is the right answer for most founders building a real Philippine business.

A One Person Corporation (OPC) gives a solo founder the same limited liability and the same FINL and capital rules, but with a single stockholder instead of a board. The trade-off is that you must appoint a nominee and an alternate nominee to step in if you cannot serve. It suits an individual entering an open sector who does not want co-incorporators.

A branch office is an extension of your existing foreign company — not a separate entity. It can earn income in the Philippines, but the parent carries full liability for everything the branch does. It usually requires about US$200,000 of inward remittance and a resident agent. Choose it when an established overseas company wants to trade here directly without forming a new Philippine corporation.

A representative office is a liaison presence only. It cannot earn income — no sales, no invoicing — and exists for market research, promotion, and coordinating with customers or suppliers. It is funded by roughly US$30,000 in annual inward remittance, needs a resident agent, and exposes the parent to full liability. Use it to establish a footprint before committing to a revenue-generating structure.

A subsidiary corporation is simply a domestic corporation owned by the foreign parent. Because it is a separate legal entity, the parent’s exposure is ring-fenced to its equity investment — the cleanest way for an established company to operate here while protecting the group. It follows the same incorporation, governance, and capital rules as any domestic corporation.

How to decide

Work through four questions in order:

1. Will you earn income in the Philippines? If not, a representative office is the lightest-touch option. If yes, continue.
2. Do you want a separate legal entity that limits liability? If yes, choose a domestic corporation, OPC, or subsidiary. If you are comfortable with the parent bearing full liability and want to trade directly, a branch office works.
3. Are you a solo founder or backed by an existing company? A solo founder in an open sector fits an OPC; an existing foreign company that wants liability ring-fenced fits a subsidiary.
4. Is your activity on the Foreign Investments Negative List? This sets your ownership ceiling and minimum capital — and it applies the same way across every separate-entity structure.

The structure you pick determines your registration path, your banking, and your tax position for years, so it is worth getting right the first time. Chamberlain matches your goals, customers, and budget to the correct entity and gives you a fixed quote. Book a free consultation to confirm your structure before you file.