Business Registration Paid-up Capital Requirements
The amount of authorized capital, paid-in capital or inward remittance is determined either by the Corporation Code of the Philippines, the Foreign Investment Negative List, DTI, BSP or SEC regulations.
Depending on the nature of the business, and the amount of paid-up capital you may be required to open a Treasurer-in-Trust Fund (TITF) account to deposit the capital and obtain a bank certificate to certify that the funds are on deposit with a bank.
List of required minimum paid-up capital (not taking into account nature of business)
Majority Filipino Owned
Sole Proprietorship Filipino owned PHP 5,000 (TITF not required)
Partnership 60% Filipino owned PHP 100,000 *
Domestic Corporation 60% Filipino owned PHP 100,000 *
40% or More Foreign Owned
Sole Proprietorship Foreign owned USD 200,000 **
Partnership with more than 40% Foreign Ownership USD 200,000 **
Domestic Corporation with more than 40% Foreign Ownership USD 200,000 **
Representative Office USD 30,000
Branch Office USD 200,000 **
Regional Headquarters USD 50,000 annually
Regional Operating Headquarters USD 200,000
* Our recommendation
** Required of more than 40% to 100% foreign owned business catering to the Philippines domestic market. Can be lowered to USD 100,000 under certain conditions:
1. Hiring a minimum of 50 employees
2. The use of new technology approved by the Department of Science and Technology.
Export enterprises and other businesses whose income is derived from overseas such as but not limited to BPOs and call centers can file for an exemption which will allow a minimum of PHP 100,000 paid-up capital.
Treasurer-in-Trust Fund
Most banks will not allow the conversion of the Treasurer-in-Trust Fund to a corporate account until a license to transact business or a certificate of incorporation has been issued by the SEC.
To open a Treasurer-in-Trust Fund the bank will require depending on the entity being set up: the proposed articles of incorporation, partnership papers, sole proprietorship application and a board resolution for foreign companies.
The regulations always favor Filipino ownership. For 40% or more foreign ownership Foreigners are always required to maintain a higher paid-in capital.
Minimum Paid-up Capital Requirement
Based on industry:
Break Bulk Agent PHP 250,000
Cargo Consolidator PHP 400,000.00
Financing Company
– Metro Manila and other 1st class cities PHP 10,000,000
– Other classes of cities PHP 5,000,000
– Municipalities PHP 2,500,000.00
Freight Forwarders
– Domestic PHP 250,000
– International PHP 2,000,000.00
Health Maintenance Organization PHP 10,000,000.00
Insurance
– Insurance Broker PHP 20,000,000
– Reinsurance Broker PHP 20,000,000
– Insurance Broker and Reinsurance Broker PHP 50,000,000
– Life Insurance Company PHP 1,000,000,000
– Non-Life Insurance Company PHP 1,000,000,000
– Reinsurance Company PHP 2,000,000,000
Investment
– Investment Adviser/Manager PHP 10,000,000.00
– Investment Company PHP 50,000,000
– Investment House PHP 300,000,000
– Lending Investor PHP 1,000,000
Local Manpower Contracting and Subcontracting PHP 3,000,000
Mining
– Required Authorized Capital Stock (PHP 10,000,000.00 authorized) PHP 2,500,000 paid-up
Non-Vessel Operating Common Carrier PHP 4,000,000
Pawnshop PHP 100,000.00
Pre-Need Plan Issuer PHP 100,000,000
Pre-Need Plan Agent PHP 5,000,000
Real Estate Investment Trust ( REIT) PHP 300,000,000
Recruitment – Domestic
– Corporation PHP 1,000,000
– Partnership PHP 1,000,000
Recruitment for Overseas Employment PHP 5,000,000
Retail Trade with Foreign Equity US$ 2,500,000
School (for stock corporations)
– Pre-elementary/Elementary Education PHP 1,000,000
– Elementary & Secondary Education PHP 2,500,000
– Elementary, Secondary, Tertiary PHP 5,000,000
– Post/Graduate Education
Security Agency PHP 500,000
Securities Broker/Dealer
– (New/SRO-Member) PHP 100,000,000
– Securities Broker/Dealer
– (Existing/SRO-Member) PHP 30,000,000
– Securities Broker/Dealer in Proprietary Shares (Non-SRO-Member) PHP 5,000,000
Special Purpose Vehicle PHP 31,250,000
Special Purpose Vehicle Special Purpose Corporation PHP 5,000,000
Secondary Mortgage Institution (SMI) PHP 2,000,000,000
Servicer for special purpose corporation
*Required Authorized Capital Stock (PHP 10,000,000.00)
Transfer Agent PHP 1,000,000
About David Elefant
Philippines business consultant specializing in assisting companies setup their operations in the Philippines.
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