Doing Business in the Philippines: A Foreigner's 2026 Guide

The Philippines occupies a distinctive position in Southeast Asia: English is the language of business, a large educated workforce makes hiring accessible, and a sustained run of regulatory reform has made the ownership and tax landscape significantly more open than it was five years ago. Here is what a foreign founder actually needs to understand before committing.

Ownership — the starting position in 2026

The 13th Foreign Investment Negative List (EO 113), effective May 2026, defines where foreign equity is capped. Everything not on the list can be up to 100% foreign-owned. The list has shrunk over successive editions, and 2026’s version keeps most services, retail trade, and the now-liberalised telecoms sector open to full foreign participation.

Still restricted: mass media (except recordings), small-scale mining, private security agencies, firecrackers manufacture, and a defined set of licensed professions. If you’re unsure about your sector, start at /resources/finl-2026-explained.

Corporate income tax — two regimes

Standard regime: 25% corporate income tax on net taxable income. Small domestic corporations with net taxable income not exceeding ₱5 million and total assets not exceeding ₱100 million qualify for a reduced 20% rate.

CREATE MORE incentive regime: Companies registered with an Investment Promotion Agency (PEZA, BOI, AFAB, or others) in a qualifying activity can access a 5% Special Corporate Income Tax (SCIT) on gross income in lieu of national and local taxes. This is particularly relevant for export enterprises and IT/BPM operations. The incentive period under Republic Act 12066 (CREATE MORE Act) can extend to 17 years or more depending on activity and location.

Value-added tax (VAT) is 12% on most goods and services. Export enterprises registered under PEZA benefit from zero-rated VAT on local purchases, eliminating the cash-flow burden of VAT refund cycles.

Hiring — the practical picture

The Philippines is the reason many foreign founders choose this market. A large, English-proficient workforce, strong tertiary education in IT and finance, and cultural alignment with US, Australian, and European working patterns make the talent pool genuinely competitive at a significant cost advantage.

Key employment compliance:

• Employees must be enrolled in SSS (social security), PhilHealth (health insurance), and Pag-IBIG (housing fund) as employer contributions
• Labour law is employee-protective — probation maximum six months; redundancy processes apply
• Foreign nationals working in the Philippines (including in their own company) require an Alien Employment Permit (AEP) from the Department of Labor and Employment (DOLE), plus a 9(g) pre-arranged employment visa

Banking

Philippine banks require in-person account opening for the corporate signatory in most cases. For the initial capital deposit (required before SEC registration), the company treasurer — who must be a Philippines resident — handles account opening.

Operating accounts can be opened once the Certificate of Incorporation is issued. International wire transfers work but can be slow through certain domestic banks; founders running regional treasury operations often combine a local peso account with an offshore USD account for efficiency.

Visas for founders and key staff

Foreign founders living in the Philippines have several options depending on their role and investment level:

• 9(g) pre-arranged employment visa: For founders employed by their Philippine company in an executive, managerial, or technical capacity. Requires AEP; requires the company to be registered first. See /philippine-visas.
• SIRV (Special Investor’s Resident Visa): Long-stay investor residency visa requiring a minimum US$75,000 inward remittance into qualifying investments. Administered by the BOI.
• SRRV: Retirement-focused; allows investment and business ownership but not employment by a Philippine company.

For PEZA-registered companies, the IPA registration streamlines the AEP and 9(g) process for foreign staff.

Practical realities

What works well: English-language government interfaces (SEC, BIR, and most agencies publish in English), an established professional services sector, and a growing body of digital filing options through SEC’s eSPARC and BIR’s eFPS.

What takes patience: LGU business permit renewal varies significantly by municipality. Some processes that should be digital are still paper-based at the agency level. Secondary licences (BSP for financial services, FDA for food and health products, etc.) add significant time and require separate compliance tracks.

What to plan for: Ongoing annual compliance — SEC General Information Sheet, BIR filings, LGU renewal, audited financial statements — is a real operational overhead. Factor this into your cost model from day one.

Getting the structure right before you start

The entity type, incentive regime, and visa pathway interact. A company set up without PEZA registration misses the 5% SCIT. A founder without the right visa works illegally. A capital remittance done in the wrong sequence delays SEC registration.

Chamberlain handles business registration and visas as a single integrated process, so the dependencies don’t become your problem to manage. Book a consultation to walk through your specific situation.