[ESTABLISHING A BUSINESS ENTITY IN THE PHILIPPINES]
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LIST B Foreign Ownership is Limited by Reasons of Security, Defense, Risk to Health and Morals, and Protection of Small and Medium Enterprises Industry Allowed Foreign Equity
Manufacture, Repair, Storage, and Distribution of Products / Ingredients Requiring Philippine National Police Clearance (such as firearms and explosives; may be allowed for non-nationals if for export) Manufacture, Repair, Storage, and Distribution of Products / Ingredients Requiring Department of National Defense Clearance (such as tools for warfare; may be allowed for non-nationals if for export) Manufacture and Distribution of Dangerous Drugs Sauna and Steam Bathhouses, Massage Clinics, and Other Like Activities Gambling, Except Those Covered by Investment Agreements with PAGCOR and Operating within Special Economic Zones Domestic Market Enterprises with Paid-In Capital of Less Than US$200,000 Domestic Market Enterprises which Involve Advanced Technology or Employ at Least 50 Direct Employees with Paid-In Capital of Less than US$100,000 1. Domestic Corporation The minimum paid-up capital requirement of a domestic corporation is dictated almost entirely by the industry it seeks to operate in. As expected, insurance, finance, and investment companies have some of the most expensive capitalization requirements in the Philippines. Furthermore, the amount of foreign equity, and whether a company will engage in mostly export sales or domestic sales, will also result in variances in the capitalization requirements. Setting up a Philippine subsidiary of a foreign entity generally requires a capital outlay of at least US $ 200,000.00, as per Philippine foreign investment laws. This
Up to 40%
Up to 40%
Up to 40% Up to 40%
Up to 40%
Up to 40%
Up to 40%
may be reduced if the Philippine Department of Science and Technology certifies that advanced technologies will be involved in the operations of the local subsidiary, or if it will employ at least 50 direct hire employees. 2. Domestic Branch Office / Philippine affiliate The capitalization requirement for a branch office or Philippine affiliate is the same as a local subsidiary, or US $ 200,000.00, which, again, may be reduced, if a certification that advanced technology will be used in the operations of the office, is obtained from the Department of Science and Technology.
ILN Corporate Group – Establishing a Business Entity Series
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