Business Organizations in the Philippines

Business Organizations in the Philippines

• The Philippines had 224,540 business establishments in the formal sector of its economy in 2017. This number was lower by 11.2% than 2016.
• Sole proprietorships are owned and controlled by one individual who enjoys all profits and personally handles all liabilities and losses. They must be registered with the Department of Trade and Industry (DTI).
• Partnerships involve two or more individuals combining money, property, or industry to divide profits amongst themselves. Partnerships can be general or limited. Partnerships with a capital of at least 3,000 PHP must register with the Securities and Exchange Commission (SEC).
• Corporations are artificial beings created by law with separate legal personalities from their members. They can be stock or non-stock.
  • Stock corporations have a capital stock divided into shares with dividends distributed based on share ownership.
  • Non-stock corporations are organized for public purposes (like charitable, religious, educational, etc.) and any profit is used to further their organizational objectives.
• Domestic corporations are 60% Filipino-owned.
• Domestic foreign-owned corporations are more than 40% foreign-owned.
• Foreign corporations are organized under foreign laws and operate in the Philippines.
  • Foreign corporations deriving income must invest a minimum of US$200,000.
  • Foreign corporations not deriving income must invest a minimum of US$30,000 and be registered with the SEC.
• Regional headquarters (RHQ) and regional operating headquarters (ROHQ) can be established by multinational companies existing outside of the Philippines. They act as supervisory, communication, and coordination centers for branches and subsidiaries in the region.
• Administrative branches are established by multinational companies to handle international trade. They operate as extensions of the parent companies.