A non-profit foundation in the Philippines is usually set up as a non-stock corporation. The Revised Corporation Code (RA 11232) defines that category, the NIRC decides whether the entity pays income tax, and PCNC decides whether donors can deduct gifts to it. These are three separate steps with their own rules, so plan each one before you file.
What the non-stock rules require
Section 86 of RA 11232 defines a non-stock corporation as one where no part of its income can be distributed as dividends to its members, trustees, or officers. That is the core rule. The rest of Title XI covers purposes (Section 87), membership rights and termination (Sections 88 to 90), trustees and their terms (Section 91), meetings and the list of members (Section 92), and the distribution of assets (Sections 93 and 94).
Because income cannot be paid out as dividends, a foundation’s surplus has to go toward its stated purposes. Any payment to a trustee, member, or officer should be checked with counsel against Section 86 before it is made.
Trustees, members, and foreign founders
Title XI, as we read it, does not require trustees or members to be Philippine citizens. Section 91 has the number of trustees fixed in the articles of incorporation or the bylaws. Section 92 says the place of meeting “shall be within the Philippine territory,” so a board that meets abroad needs a plan.
The officer rules still apply. Section 24 says the secretary “must be a citizen and resident of the Philippines,” and the treasurer “must be a resident.” A foreign founder can therefore serve as a trustee or member, but cannot be the corporate secretary. Check the foundation’s purpose as well. Sector-specific limits can apply to some activities, so confirm the activity before you appoint a foreign trustee.
Our guide to the corporate secretary, resident agent, and director roles explains how these roles differ.
Minimum capital
Title XI sets no fixed capital for a non-stock corporation, as we read it. Respicio’s comparison of foundations and non-stock corporations describes the non-stock minimum as “no strict minimum,” and says the fund must be sufficient for operations.
Some summaries give a higher starting figure for foundations. We have not been able to tie that figure to an SEC rule, so this page does not state one. Confirm the current requirement with the SEC before you fund the entity.
Once the entity exists, the yearly SEC filings still apply. Our SEC annual compliance guide covers those filings.
Tax exemption under Section 30 of the NIRC
Section 30 of the NIRC lists the organisations exempt from income tax. Paragraph (E) covers non-stock corporations organised and operated for religious, charitable, or scientific purposes, where no part of the net income or assets may belong to or inure to the benefit of any member, organiser, officer, or specific person. Paragraph (G) covers civic leagues for social welfare, and paragraph (H) covers non-stock, non-profit educational institutions.
The Section 30 text we read is the 1997 NIRC as enacted. RA 10963 does not amend Section 30. Later amendments may have changed the wording, so confirm the current text with your tax adviser before you rely on a paragraph letter.
Exemption is not automatic. According to Respicio, the organisation must apply to the BIR for a formal confirmatory ruling or tax exemption certificate. PCNC’s list of regulations cites RMO 38-2019 on the tax exemption of non-stock, non-profit corporations under Section 30, and RMO 44-2016 on the policies for qualified organisations. Check the current document list with your Revenue District Office.
Income from activities conducted for profit stays taxable, whatever the organisation does with that income. A foundation that runs a business alongside its charitable work needs to plan for that split.
PCNC accreditation and donee status
According to PCNC’s website, PCNC is the accrediting entity that determines whether NGOs and foundations qualify for accreditation. The BIR then registers them as donee institutions. PCNC states that it certifies non-profit organisations that meet established minimum criteria for financial management.
PCNC’s regulations list covers the donee rules. It cites EO-0720 on the accreditation of donee institutions, and BIR RR 13-1998 on the deductibility of contributions to accredited donees under Section 34(H) of the NIRC. Accreditation is what lets donors claim a deduction for gifts. Check the donor-side limits in those rules before you promise a donor a deduction.
Accreditation does not replace the BIR tax exemption ruling. The two are separate applications, so track them separately.
Common mistakes
- Treating “non-profit” as tax-exempt by default. The ruling is a separate application. Until it is granted, do not plan on exempt income.
- Promising donors a deduction too early. Donor deductions depend on accreditation and BIR registration as a donee institution.
- Making a foreign founder the secretary. Section 24 requires a citizen and resident for that role.
- Paying trustees or officers out of surplus. Section 86 bars distributing income as dividends. Check every payment to a trustee, member, or officer with counsel.
- Earning business income and assuming it stays exempt. Income from activities conducted for profit remains taxable under Section 30.
How Chamberlain approaches a foundation
Chamberlain confirms the entity route in the first consultation. We look at the purpose, the membership, the trustees, and whether the planned activities fit Section 30. Our registration with the SEC service covers the filing side, and our corporate secretarial services cover the records the entity must keep.
Our pricing page shows incorporation packages at ₱80,000 to ₱250,000 in professional fees, depending on entity type, capital route, licences, and LGU location. A foundation is scoped at the consultation, and we give a fixed quote before work starts. Statutory government fees and paid-in capital are disclosed separately.
Ready to talk through a foundation? Contact us with your purpose, planned trustees, and the activities you expect to run.
Sources
- Republic Act No. 11232, Revised Corporation Code of the Philippines, Sections 24, 86 to 94: https://lawphil.net/statutes/repacts/ra2019/ra_11232_2019.html
- Republic Act No. 8424, National Internal Revenue Code of 1997, Section 30: https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
- Republic Act No. 10963 (TRAIN Law), checked for amendments to Section 30: https://lawphil.net/statutes/repacts/ra2017/ra_10963_2017.html
- Respicio, “How to Register a Non-Profit Organization or Foundation in the Philippines”: https://www.respicio.ph/commentaries/how-to-register-a-non-profit-organization-or-foundation-in-the-philippines
- PCNC, home page: https://www.pcnc.com.ph
- PCNC, regulations list: https://www.pcnc.com.ph/?p=11217
Frequently asked questions
Is a non-profit foundation in the Philippines a non-stock corporation?
Usually, yes. Title XI of RA 11232 governs non-stock corporations, where no part of the income can be distributed as dividends to members, trustees, or officers. Confirm the category you will register under with the SEC before you draft the articles of incorporation.
Does a Philippine foundation need a minimum capital?
The Title XI provisions we read set no fixed capital for a non-stock corporation. Law-firm guidance describes the starting fund as an amount enough to start operations. Some summaries give a higher figure for foundations, but we have not confirmed it against an SEC rule, so confirm the current requirement with the SEC before you fund the entity.
Can foreigners be trustees or members of a non-profit foundation?
Title XI, as we read it, sets no citizenship requirement for trustees or members. The officer rules in Section 24 still apply, so the secretary must be a Philippine citizen and resident. Section 92 also places meetings within Philippine territory, so plan any remote participation with your counsel.
Is a non-profit foundation exempt from income tax automatically?
No. Section 30 of the NIRC exempts certain non-stock, non-profit organisations, but the organisation must apply to the BIR for a tax exemption ruling. Income from activities conducted for profit remains taxable, whatever the organisation does with it.
What does PCNC accreditation do?
PCNC is the accrediting entity that decides whether NGOs and foundations qualify. The BIR then registers accredited organisations as donee institutions. Accreditation is what allows donors to claim deductions under the donor rules in Section 34(H) of the NIRC. It is a separate step from the BIR tax exemption ruling.