Can Foreigners own 100% of a Company in the Philippines?

M&ASetup
Written By Noel Ducusin

By: Noel C Ducusin

You may have heard or spoken to some consultants in the past that you are only allowed up to 40% foreign ownership in your local company and the remaining 60% must be owned by a Filipino national. Most likely, you have come across this assertion several times in your own personal research about setting up your local company in the Philippines.

But is that really the case? In this article, we will show you how to set up your local company with 100% foreign ownership by you.

Liaison or Representative Offices

It is very important to be clear about your objectives in setting up your local office. Probably, you set up the local office so that you can open local bank accounts or higher local workers without having to go through the overseas recruitment government regulatory body.

But do you really need your local company to do the selling?

For instance, if your company has offices in multiple countries and so does your customer, there is no need that the sale transaction to be done locally. For sure, coordinating with your local customer is required either before or after the sale. Such coordination may take the form of getting preliminary information regarding product specifications before the sale or providing technical support after the sale. Strictly speaking, this is not selling but merely coordinating.

In other words, since you and your local customers are both transnational companies, the sale can happen anywhere in the world even though the local coordinating is done in the Philippines.

Because they are not competing in the local market, liaison or representative offices are allowed to be 100% foreign-owned. The purpose of the representative company is not to make sales but rather to facilitate them only.

If this situation applies to you, you can most definitely own your local company 100%.

Foreign Branch Offices

Sometimes the purpose of your local office is to explore possible opportunities for doing business in the country.

In instances like these, you may not want to go through the process of setting up your local office just yet. Instead, you could simply just register your foreign company as a foreign branch office with the simple expedient of using your existing company charter and applying for a license to act as a foreign branch office with the SEC regulator.

Yes, you will have to post a bond in a minimal amount to secure local creditors and any local sales will be subjected to a percentage withholding on the gross amount. Nevertheless, at this stage, it's most likely that you're just exploring and not even looking to do some sales. Later on, you can always set up an independent local company once you see that there's sufficient demand for your products or services.

Unlike a liaison/representative office, your foreign branch office is actually an extension of your offshore company and there is no patent–subsidiary relation as is the case in liaison/representative offices, the latter being a separately incorporated domestic entity.

For more information on how to set up your branch office, you can click here.

Export or Outsourcing

If your business is that of servicing customers abroad using local manpower such as customer service, software development, engineering and architectural design, or financial or legal backroom operations, then technically, you're not selling domestically.

In this case, you will be considered an export company.

Thus, you will have all the advantages of having a local company like that of the local bank accounts, being able to avail of local credit, being able to hire domestically without having to go through the overseas employment regulator, and the like and still own your company 100%.

Again, it is very important to be clear about your objectives because if you do not intend to compete in the local market, then the likelihood is really that you can own your company 100%.

Infusing the Required Minimum Capital for Domestic Sale

Finally, if you really must sell domestically, then the workaround is to make sure that you meet the minimum capital requirement to qualify as a domestic market enterprise. As of this writing, the minimum capitalization is US$250,000.

It is important to note, however, that unlike in foreign branch offices where this capital is idle and kept as a bond for the satisfaction of local creditors, this capital can be deployed for any commercial purpose including the purchase of assets, company payroll, company leases, and any other kind of business expense.

Finally, please note that the type of sale here is domestic sale through distributors or partners and not retail sale which is direct to the end customer wherein the goods are consumed or destroyed. That will be the subject of a separate article as retail sales have significantly much higher capitalization requirements.

We will have a separate article on how to maximize the return of capital back to the parent company and the various options on how to do that.

 
 
 
 

About the Author

Atty. Noel C. Ducusin is the Director for M&A at DoingBusinessPH, where he works with offshore investors—primarily from Japan, Europe, the US, and Southeast Asia—seeking to enter the Philippine market through acquisitions, joint ventures, and strategic partnerships. He also advises local companies, family offices, and high-net-worth individuals on originating and executing transactions, including preparing businesses to be investment-ready through reverse due diligence.

His work spans the full M&A cycle: identifying counterparties, managing due diligence, leading negotiations, structuring transactions, arranging financing, and coordinating with trusted vendors such as banks, suppliers, and contractors. For startups and new ventures, he helps design fundraising-ready structures and connects them with investors, making DoingBusinessPH a natural bridge between global capital and local opportunity.

Beyond transactions, Noel and his team provide executive education and professional development through speaking events, seminars, and small-group sessions like business lunches and roundtables, then carry that value forward into practical, business-ready solutions. These include annual subscriptions for legal and regulatory updates, customized in-house corporate training, and post-event compliance audits, along with exclusive deep-dive masterclasses and peer mastermind groups for executives. They also prepare executive toolkits with ready-to-use templates and offer premium one-on-one consulting sessions—all designed to turn the insights gained from these settings into clear, actionable steps that help investors and businesses navigate the Philippine market with confidence.

A lawyer by training with a degree in Business Management, Noel is also Senior Partner at N. Ducusin & Partners Law Offices, which specializes in Mergers & Acquisitions, Investments, Cross-Border Regulatory, and Corporate Advisory. Over the years, he has developed deep, practical expertise in corporate finance, company valuation, and financial modeling through hands-on involvement as part of the deal team in live transactions. This combination of legal and financial experience allows him to bridge both perspectives seamlessly, ensuring that deals are not only executed but positioned for long-term success.

He is always looking forward to comparing notes with investors, startups, and vendors to explore where his clients’ mandates align with theirs and to uncover potential opportunities and collaborations that benefit both sides. Please feel free to connect with him to continue the conversation and explore where your goals and his clients’ interests may intersect.

His mission for this blog is to help foreign investors, business owners, and managers by breaking down complex legal concepts and dense technical material into simple, straightforward, and actionable insights for better business decisions. Articles and briefs are written in plain everyday language, without jargon or unnecessary academic writing—the simpler and more practical, the better.

“Everything should be made as simple as possible, but no simpler.” – Albert Einstein

 
Noel Ducusin
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