Setting Up a Limited Liability Company in the Philippines
What is the counterpart of an LLC in the Philippines and what are its restrictions?
domestic corporation under fia
Domestic Corporation under FIA is the most commonly chosen entity by investors. The shareholders can be a foreign natural person or entity. Most of the business activities such as IT or consultancy can be 100% foreign-owned. It is best to consult with us to determine whether the nature of your business can be registered under this type of LLC.
what is "fia?"
The FIA means “Foreign Investment Act”. This type of limited liability company can be 100% foreign-owned. The clearer definition for this is as long as the foreign ownership is more than 40%, the corporation is already considered as a 100% foreign-owned company.
What are the Basic Requirements in Setting up a Domestic Corporation under FIA?
1. A minimum of 2 and a maximum of 15 Incorporators
- Incorporators are the registered individuals needed to establish the corporation
- All the individuals can be 100% foreigners and will be the interim director of the corporation
2. Business Address
- The nature of the business must be checked first if physical location is not a prerequisite.
- For most business activities, virtual office addresses are allowed to be registered.
What is the Capital Requirement for a Domestic Corporation?
Capital requirement for LLC depends on the business activity of the company. If it is not included in the Foreign Negative List, the capitalization is below.
If the company is going to generate revenue in the Philippines. Meaning if the corporation will conduct business in the Philippine market.
At least 5,000 to 10,000 USD for Export Companies
According to the law, if at least 70% of the companies’ revenue will be coming from abroad, the capital can be minimized to at least 5,000 PHP or 200 USD. But it is always advised to put down at least 5,000 USD for more feasible reasoning with the SEC.
At least 5,000 PHP for Local Ownership
For local citizens who will register for Domestic Corporation, the capital requirement is only 5,000 PHP.
What are the Corporate Officers required?
The president acts as the signatory on behalf of the corporation. He or she reports to the board of directors.
2. Local Corporate Secretary
This is part of the officer requirement. Their main tasks to draft legal documents that are needed for the incorporation.
Non-Filipino citizens can be assigned as the Treasurer of the company as long as the individual is a resident in the Philippines.