Doing business

Philippines

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
The Corporation is a joint-stock company. No minimum. 25% must be subscribed. 25% must be released at the incorporation.	Minimum 5 shareholders, maximum 15. A Majority of shareholders have to be Philippine residents. No maximum after the constitution. Liability is limited to the amount contributed.
A Closed Corporation is a closed joint-stock company No minimum. 25% must be subscribed. 25% must be released at the constitution.	Maximum 20 Liability is limited to the amount contributed.
Sole Partnership is a single-member company No minimum capital.	Only 1 person Liability is unlimited.
General Partnership No minimum capital.	Minimum 2 partners Liability is unlimited.
Limited Partnership No minimum capital.	Minimum 2 partners Liability is limited to the amount contributed.

Business setup procedures

Setting up a company	Philippines	East Asia & Pacific
Procedures (number)	15.0	7.8
Time (days)	38.0	39.0

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Philippines.
Philippine Contractors Accreditation Board (PCAB)
The competent organization: The Securities and Exchange Commission (SEC).

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	1,544	1,963	1,713
FDI stock (millions USD)	21,611.0	23,180.0	24,893.0
Performance Index*, ranking on 141 economies	122	110	-
Potential Index**, ranking on 141 economies	80	-	-
Number of Greenfield investments***	140	120	-
FDI inwards (in % of GFCF****)	6.3	11.6	-
FDI stock (in % of GDP)	12.9	14.6	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest the Philippines

Strong points: The country's main strong points are:
- A skilled English-speaking workforce;
- A large domestic market;
- Its membership to ASEAN;
- A favorable investment policy;
- A very advanced legal system;
- A strategic location at the Asian gateway; and
- Considerable natural wealth.
Weak points: The country's weak points lie in its political instability, the bad quality of its infrastructures, judicial precariousness and lack of transparency.
Government measures to motivate or restrict FDI: Laws liberalizing business practices have opened up more fields to foreign investments and have provided foreign investors with the same incentives as ASEAN members, as well as simplified procedures.
Bilateral investment conventions signed by the Philippines: The Philippines have signed bilateral investment agreements with many countries, listed here.

Procedures relative to foreign investment

Freedom of establishment: Not guaranteed.
Acquisition of holdings: A majority holding interest in the capital of a local company is legal in the Philippines.
Obligation to declare: The agency for the promotion of foreign investment in the country provides information about the authorizations required for setting up business.
Competent organization for the declaration: Philippine Board of Investment
Requests for specific authorizations: The sectors open to foreign investment after an authorization has been obtained are listed in Annexe B of the Foreign Investment Act.

Finding assistance for further information

Investment aid agency: Board of Investment
Other useful resources: Philippine Chamber of Commerce and Industry