Seven questions foreign founders ask first

Can a foreigner own 100% of a Philippine company?

Yes for most activities; no for a defined list. The list, not a rule of thumb, decides.

The default under the Foreign Investments Act is that a foreign national or foreign company may own up to 100% of a Philippine enterprise. The exceptions are the activities on the Foreign Investment Negative List, which caps foreign equity at 40% (land ownership, public utilities, educational institutions, exploitation of natural resources), 30% (advertising), 25% (private recruitment, defence-related construction) or 0% (mass media, practice of most professions, private security, small-scale mining, cooperatives).

Two activities catch new founders most often. Retail trade (selling directly to consumers) is open to foreigners only if the company has at least ₱25 million paid-up capital. Land cannot be owned by a foreigner or a company that is more than 40% foreign-owned; leasing is the usual route.

The current list is the 13th Regular Foreign Investment Negative List, in force from 2 May 2026. It reaffirmed 100% foreign ownership of renewable-energy generation and kept the retail threshold at ₱25 million.

What is the minimum capital for a foreign-owned company?

US$200,000 paid-in for a company selling into the domestic market; US$100,000 in three defined cases; no FIA minimum for an export enterprise.

A foreign-owned domestic market enterprise (one that sells mainly in the Philippines) must have paid-in capital of at least US$200,000. That drops to US$100,000 if any one of three conditions is met: the business involves advanced technology as determined by the Department of Science and Technology; it is a registered startup or startup enabler; or the majority of its direct employees are Filipino and there are at least fifteen of them.

An export enterprise — one that exports at least 60% of its output or services — is not subject to the FIA minimum. Many foreign-founded service businesses serving overseas clients fall here, which is why the first question on a discovery call is "who are your customers and where are they?"

The Revised Corporation Code itself sets no general minimum capital; the minimums come from the FIA and from sector rules (for example the ₱25 million retail threshold, and specific requirements for lending, financing, recruitment and similar regulated activities).

How long does a 9(g) work visa take, and what comes first?

Two permits in sequence: the DOLE Alien Employment Permit first, then the Bureau of Immigration 9(g). Plan for about three to five months end to end.

The 9(g) pre-arranged employment visa is issued by the Bureau of Immigration, but it cannot be filed until the Department of Labor and Employment has issued an Alien Employment Permit (AEP). Since 10 February 2025 the AEP is governed by DOLE Department Order No. 248-25, which requires the employer to advertise the position simultaneously in a newspaper of general circulation, on PhilJobNet and with the local PESO, wait fifteen calendar days, and file within fifteen days of signing the employment contract. Foreign nationals to be appointed to a corporate-officer position named in the articles of incorporation are exempt from the publication step.

After the AEP, the employer petitions the BI for the 9(g); the visa is normally valid for one to three years in line with the AEP. A separate Provisional Work Permit can be applied for at the BI so the person can start working while the 9(g) is pending.

In practice the whole sequence takes roughly three to five months from advertisement to visa implementation, depending on the DOLE regional office's caseload and BI processing at the time. Founders arriving on a tourist visa need to budget for this gap.

How do I pay myself as a foreign founder?

Three lawful routes — salary, dividends, or director's fees — each with a different tax and visa consequence. Choose deliberately.

Salary. To be on the payroll you must hold a work authorisation (AEP and 9(g), or another visa that permits employment). Your salary is subject to withholding tax at the graduated rates (0% to 35%) and to SSS, PhilHealth and Pag-IBIG contributions like any employee.

Dividends. The company may declare dividends out of unrestricted retained earnings. A resident alien pays a 10% final tax; a non-resident alien engaged in trade or business pays 20%; a non-resident alien not engaged in trade or business pays 25%, subject to any lower treaty rate. Dividends do not require a work visa, but they require profits, a board resolution and, for a corporation, compliance with the Revised Corporation Code's rules on distributable earnings.

Director's fees for attending board meetings are a third, smaller route and are taxed as income of the director.

Which mix is right depends on your tax residency (next question), your home-country rules on foreign income, and whether you need the visa anyway to run the business day to day.

Will I become a Philippine tax resident, and what does that mean?

Philippine tax follows source, not passport. The 180-day line changes your rate, not the scope of what is taxed.

A foreign individual is taxed in the Philippines only on income from Philippine sources, whether classed as a resident alien or a non-resident alien. That is different from many home jurisdictions that tax worldwide income, and it is why many foreign founders keep two sets of advisers talking to each other.

What changes with time in the country is the rate regime. A non-resident alien who stays more than 180 days in aggregate during a calendar year is treated as "engaged in trade or business" and pays the same graduated rates as residents on Philippine-source income; one who stays 180 days or fewer, and has no business here, pays a flat 25% on gross Philippine-source income.

The company, if incorporated in the Philippines, is a domestic corporation taxed on its worldwide income at 25% (20% for small corporations meeting the net-taxable-income and asset tests). Your home country's residency rules, exit-tax rules and any tax treaty with the Philippines are applied on top; POC coordinates this with a licensed adviser in your home country and, for cross-border financial planning, with Astra Worldwide.

What does it cost to hire one employee in Metro Manila?

The daily minimum is ₱755 from 26 September 2026, plus the employer's statutory share of about 12% to 14% on top of salary, plus a 13th-month pay.

The National Capital Region minimum wage for non-agricultural workers rose to ₱755 per day on 26 September 2026 under Wage Order NCR-28. An earlier order, NCR-27, which would have added ₱85 in two tranches, was stopped by a court and is now before the Supreme Court. Most professional roles are paid well above the minimum, but the order sets the floor for every position.

On top of salary the employer pays its share of SSS (10% of the monthly salary credit, including the mandatory provident fund, within the credit ceiling), PhilHealth (half of the 5% premium, within the salary ceiling) and Pag-IBIG (2%, on a capped base). Every rank-and-file employee is also entitled to a 13th-month pay equal to one-twelfth of basic salary earned in the year, payable by 24 December.

Probation may run up to six months, after which the employee becomes regular; termination thereafter requires a just or authorised cause and due process. Contribution tables change on a schedule, so POC re-verifies them at the source the month they change before running payroll.

How hard is it to close a company if it doesn't work out?

Harder than opening it. Budget twelve to twenty-four months and keep filing until every agency has signed off.

A Philippine corporation is closed in a fixed order. The stockholders and board approve dissolution and the SEC issues a certificate of dissolution (a shortened procedure applies when no creditors are affected). The BIR closure is the long pole: the company applies to cancel its registration, undergoes a closing audit, settles any assessment and obtains a tax clearance. The local government cancels the business permit, and SSS, PhilHealth and Pag-IBIG registrations are closed once employees are separated and final contributions paid.

The trap is stopping early. A company that simply goes quiet keeps accruing filing obligations and penalties for every return it misses. The cheaper path is to plan the closure the way you planned the opening, and to keep the books clean from day one so the closing audit is short.

In POC's experience the full sequence takes twelve to twenty-four months, most of it waiting on the BIR audit. Foreign founders leaving the country should appoint a resident agent or officer to sign through to the end.