Starting a business in the Philippines: A practical guide
Atty. Lea Mona P. Chu
Atty. Rhenelle Mae O. Operario
DECEMBER 2025
The Philippines remains a bright spot in the Southeast Asian region, with robust private consumption and sustained investments, particularly on infrastructure, continuing to fuel growth.1 For 2026, the Philippines is still seen to post the second-fastest growth in Southeast Asia, after Vietnam’s 6.4%.
The Asian Development Bank expects Philippine growth to stay above the Southeast Asian average through 2026.2
For aspiring entrepreneurs, setting up a business in the Philippines has become more streamlined in recent years. Government agencies have introduced digital portals and simplified steps to reduce the complex procedures that once discouraged many from starting their ventures.
Whether you are a Filipino citizen, an Overseas Filipino Worker (OFW) planning to invest, or a foreign investor seeking new markets, knowing the step-by-step process of business registration helps ensure a smooth and successful start.
In the following discussion, we’ll walk through the essential stages, particularly, from choosing your business structure to securing registrations and permits, along with practical tips to help you navigate the Philippine business environment with confidence.
Choosing the Right Business Structure
Before starting a business in the Philippines, you need to decide what type of business you want to set up. This will help determine your requirements, taxes, and how you will operate.
2. Partnership is a contract by which two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.4
3. A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes, and properties expressly authorized by law or incidental to its existence.5
However, the corporation may now be formed by only one person (One Person Corporation or OPC). Only a natural person, trust, or an estate may form a One Person Corporation. Banks and quasi-banks, pre-need, trust, insurance, public and publicly-listed companies, and non-chartered government-owned and controlled corporations may not incorporate as One Person Corporations: provided, further, that a natural person who is licensed to exercise a profession may not organize as a One Person Corporation for the purpose of exercising such profession except as otherwise provided under special laws.6 With this, it allows a single individual to enjoy the benefits of a corporation, particularly having a limited liability without needing multiple incorporators.
4. A cooperative is a duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve a lawful common social or economic end, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles.7
Registering your Business
Depending on your business structure, you are required to register with the appropriate government agency and fulfill additional steps as provided below:
1. For sole proprietorships, business name registration shall be made with Department Trade and Industry (DTI)8. Upon registering your business,
it secures the exclusive right to use your chosen business name for five (5) years and is subject for renewal.
2. For stock corporations, non-stock corporations and partnerships, registration shall be made with the Securities and Exchange Commission (SEC)9. By registering your company with the SEC, it gives your business legal personality, allowing it to enter contracts, own property, and operate under Philippine law. For corporations, it also provides limited liability protection for owners.
3. For cooperatives, federations or unions, registration shall be made with the Cooperative Development Authority (CDA)10. Registration with the CDA gives these organizations legal personality, allowing them to enter into contracts, own property, and operate officially under the law. The process typically involves submitting articles of cooperation, bylaws, and other required documents, followed by approval and issuance of a certificate of registration. The registration must be done with the regional extension office having jurisdiction with the place of business of the concerned organization.
4. For business operating in economic zones or special investment areas, registration with the Philippine Economic Zone Authority (PEZA)11 may be required. To attract more investors, PEZA offers a range of benefits such as tax incentives, which includes income tax holidays (ITH) and reduced corporate income tax after the ITH period, import/export benefits as it offers duty-free importation of capital equipment and raw materials.
Once your business is registered with the appropriate government agency you must ensure compliance with a series of post-registration requirements to operate legally and smoothly.
1. Tax Compliance with the Bureau of Internal Revenue (BIR)
The next mandatory step is to register with the BIR12, which has jurisdiction over the place of your business. Once your business is registered, you must strictly
follow the filing schedules of your BIR tax returns as indicated in BIR Form No. 2303 (Certificate of Registration). Failure to file on time can result in open cases, imposition of penalties, and possible complications in
renewing permits or processing future transactions with the BIR.
2. Local Government Compliance
The necessary permits with the local government unit (LGU), where your business operates, such as but not limited to Mayor’s Permit, Barangay Clearance, Fire Safety Inspection Certificate, and Health/Sanitary Permit must be secured.
The clearances required by the LGU will depend on the nature of your business. While for the amount of fees to be paid with the LGU would depend on the gross annual sales or receipts, as the case may be. These must be renewed
annually and usually at the beginning of the year.
3. Employee Benefits Compliance
Employers are required to register all of their employees, regardless of their position, employment status or salary received, with the following government agencies:
a. Social Security System (SSS)13 provides benefits such as sickness or disability, maternity, retirement pay, calamity loan, salary loan and housing loan, death and funeral benefits, among others.
b. Pag-Ibig (Home Development Mutual Fund)14 provides affordable shelter financing for Filipinos such as housing loan, multi-purpose loan, calamity loan, as well as savings program, such as Modified Pag-Ibig II (MP2) Savings Program.
c.Philippine Health Insurance Corporation (PhilHealth)15 provides universal health coverage, which includes inpatient cases, outpatient services and special benefits for severe illnesses like cancer, kidney transplants and other complex cases, among others.
Failure to pay on time or remit proper payment may result in penalties and interest, fine, and worse, these government agencies might institute a criminal action against the employer.
4. Reportorial requirements
Depending on the nature of the business, reportorial requirements must be submitted with the concerned government office. This includes the submission of the General Information Sheet (GIS) with the SEC within thirty (30) days after the annual stockholders’ meeting.
Other reportorial requirements include the filing of appropriate notification with the other government agencies should there be any changes in the composition of the company, address, declared purpose, or capital, among others.
FOOTNOTES
*The views and opinions expressed are based on applicable laws, constitutional provisions, and/or jurisprudence in force at the time of writing, and do not constitute legal advice or an official stance on any political matter. Subsequent legal or factual developments may affect the relevance or applicability of the views and opinions herein expressed.