Starting a business in the Philippines means working through several government agencies in a specific sequence, not just one filing. Get the order wrong and you can lose real weeks waiting on documents that depended on an earlier step. Here's what it takes to start a business in the Philippines in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Sole Proprietorship. One owner, the simplest setup, registered with the Department of Trade and Industry (DTI). No separate legal personality and no liability shield.
- One Person Corporation (OPC). Introduced in the 2021 Revised Corporation Code, an OPC gives a single stockholder the limited liability of a full corporation without needing additional incorporators, a practical middle ground for solo founders who want corporate legitimacy.
- Domestic Corporation. The standard structure for businesses planning to scale, hire, or bring in investors, with liability protection and a formal governance structure, registered with the Securities and Exchange Commission (SEC).
Foreign investors can participate in most of these, subject to the Foreign Investment Negative List, which restricts or caps foreign ownership in certain sectors like public services and specific licensed activities.
2. Register your business
Sole proprietorships register a business name with the DTI; fees scale by scope, roughly ₱200 for barangay-level, ₱1,000 regional, ₱2,000 national. Corporations and OPCs register with the SEC through its modernized eSPARC and SEC ZERO online platforms; name verification stays valid for 30 days, and the SEC typically issues a Certificate of Incorporation within 2 to 3 weeks. From there, you register with the local government unit (LGU) where you'll operate for a mayor's permit and barangay clearance, then with the Bureau of Internal Revenue (BIR) for your Tax Identification Number (TIN) via the NewBizReg portal or your regional district office. If you'll hire staff, register as an employer with SSS, PhilHealth, and Pag-IBIG.
3. Check licenses and permits
The Philippines doesn't issue a single national business license. What you need depends on your industry and municipality; the mayor's permit and barangay clearance are standard, with additional sector-specific licenses layered on for regulated activities. Foreign-owned subsidiaries also need to keep at least a 10% profit margin and typically bill their parent company in USD, and every incoming fund transfer needs a Certificate of Inward Remittance to preserve VAT zero-rating.
4. Understand Philippine taxes
Corporate income tax (RCIT) is a standard 25% of net taxable income, reduced to 20% for domestic corporations with net taxable income under ₱5 million and total assets under ₱100 million (excluding land). A Minimum Corporate Income Tax of 2% of gross income kicks in from a company's fourth year of operation if it exceeds the regular computed tax.
VAT is 12% standard on goods, services, and imports, including digital services from both resident and non-resident providers since October 2024. Exports and sales to PEZA-registered entities are zero-rated. Businesses with gross annual sales under ₱3 million aren't required to register for VAT and instead pay a 3% Percentage Tax on gross quarterly sales unless they opt into VAT voluntarily. Dividends to non-resident foreign corporations carry a 25% final withholding tax, reducible to 15% or lower under specific conditions or applicable tax treaties.
5. Stay compliant
Corporations file monthly, quarterly, and annual BIR returns, mostly through the eFPS or eBIRForms electronic systems, plus an annual corporate income tax return (BIR Form 1702, with the specific variant depending on your tax profile). A General Information Sheet is due within 30 days of your annual stockholders' meeting, and Audited Financial Statements are due within 120 days of fiscal year-end. Companies registered under PEZA or BOI incentive programs can access income tax holidays or a preferential 5% Gross Income Tax in place of the standard corporate rate.
Philippines business costs at a glance
| Item | Cost |
|---|---|
| Sole proprietorship (DTI, national scope) | ₱2,000 |
| Corporation/OPC registration (SEC) | ₱1,000 to ₱1,500 |
| Corporate tax, standard | 25% |
| Corporate tax, small companies (under ₱5M income) | 20% |
| Minimum Corporate Income Tax (from year 4) | 2% of gross income |
| VAT, standard rate | 12% |
| VAT registration threshold | ₱3 million gross sales |
Frequently asked questions
Can a single person own a corporation in the Philippines?
Yes, through a One Person Corporation (OPC), giving a sole stockholder limited liability without needing additional incorporators.
How much does it cost to register a corporation in the Philippines?
₱1,000 to ₱1,500 for SEC registration, with the Certificate of Incorporation typically issued within 2 to 3 weeks.
What's the corporate tax rate in the Philippines?
25% standard (RCIT), reduced to 20% for domestic corporations with net taxable income under ₱5 million and total assets under ₱100 million.
When do I need to register for VAT in the Philippines?
Once gross annual sales exceed ₱3 million. The standard VAT rate is 12%.
What government agencies do I need to register with in the Philippines?
Several in sequence: SEC or DTI for the entity itself, the local government unit for a mayor's permit and barangay clearance, and the BIR for your Tax Identification Number.
Fees and rates above come from the SEC, DTI, and BIR as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Philippines-qualified accountant or lawyer about your specific situation.