Domestic Corporation
Domestic Corporation
A Domestic Corporation is the equivalent of a Limited Liability Corporation where shareholders are protected in case of default or claim. It is a popular choice for doing business in the Philippines. One of its best perks is that it can be 100% owned by a foreigner, as long as it is not on the Negative List of restricted industries.
WHAT ARE THE ADVANTAGES & DISADVANTAGES OF A DOMESTIC CORPORATION?
Full limited liability
A domestic corporation provides limited liability and is ideal for local businesses operating in the Philippines.
LESS CAPITALIZATION
Incorporating in the Philipines is affordable making it easier for small businesses to register and operate legally.
25% INCOME TAX, VAT
Local businesses in the Philippines are subject to 25% income tax and 12% VAT among other taxes.
FULL BOARD NEEDED
A domestic corporation requires full board approval for major decisions, to ensure legal compliance.
Company Information
Corporate Officers
Physical Location
Capitalization Amount
A domestic corporation is one that is duly organized and established in the Philippines. It has its own separate juridical personality which shields its incorporators and officers from liability. It can be foreign-owned subject to the negative list and capitalization requirements. It is generally the best option for those who want limited liability protection. FCB Law Office would be happy to help in your Incorporation journey.
Atty Britanico, Founder
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FREQUENTLY ASKED QUESTIONS
A domestic corporation is a business entity formed and registered under Philippine laws. It is considered a separate legal entity from its owners (shareholders) and has the capacity to enter into contracts, own property, sue, and be sued. It is the equivalent of a Limited Liability Corporation in other countries
Foreigners can own a domestic corporation, subject to limitations imposed by the Foreign Investment Negative List (FINL) and other applicable laws. In general, foreigners can own up to 100% equity in a domestic corporation, except in industries where foreign ownership is restricted or prohibited although capitalization needs can vary.
To incorporate a domestic corporation, first choose a corporate name and reserve it with the Securities and Exchange Commission (SEC). Then, prepare the Articles of Incorporation and By-laws, which contain details such as the corporate name, purpose, principal office address, capital structure, and the names and details of the incorporators and directors. The paid up capital must be paid and the documents submitted to the SEC. After the SEC has provided the incorporatin papers, the next step would be to complete the registration at the BIR, City Hall and employee mandatory benefit agencies such as the SSS, Pag-ibig and Philhealth.
A domestic corporation must have at least one but not more than 15 incorporators and directors. A majority of the directors must be residents of the Philippines.
The minimum paid-up capital for a domestic corporation is usually Php 5,000. However, depending on the nature and scope of the business, a higher paid-up capital may be required.
A domestic corporation must comply with various reporting and tax requirements, including submission of monthly, quarterly and annual BIR reports. SEC reports as well as compliance with employee benefits are also required.