How to Start a Business in the Philippines: Complete Guide for 2025

The Philippines is rapidly becoming one of Southeast Asia’s most attractive destinations for entrepreneurs. With consistent economic growth, a strategic location that serves as a gateway to the ASEAN market, and a large pool of skilled, English-speaking professionals, the country offers great opportunities for both local and foreign business owners.

And, on top of that, the Philippine government has been streamlining its digital registration processes and introducing various incentives for investors. However, navigating the registration requirements and compliance obligations remains crucial to avoid legal issues, fines, or potential business closure.

For businesses with international ambitions, managing multi-currency transactions efficiently from the start sets a solid foundation. A Wise Business account can help you hold 40+ currencies, receive payments with local account details in multiple currencies, and send money to 140+ countries - all with transparent fees and the mid-market exchange rate.

Table of contents
The benefits of starting a business in the Philippines Understanding business structures in the Philippines How to register a business in the Philippines Costs and investment requirements for 2025 Understanding your tax obligations Managing business finances and international payments

The benefits of starting a business in the Philippines

Before diving into the registration process, it’s worth understanding why so many entrepreneurs are choosing the Philippines as their business base. The combination of economic fundamentals, location advantages, and government support creates a compelling case for setting up here.

Growing economy and consumer market

The Philippines continues to show strong economic fundamentals, with consistent GDP growth and a large consumer base that makes it attractive for various business sectors. The country has climbed to 50th place in the Global Innovation Index 2025, showing how its innovation scene is developing.¹ There’s also been a notable startup funding boom, with both government and private sector support opening up opportunities for new businesses.

Strategic location and regional access

Positioned at the heart of Southeast Asia, the Philippines provides natural access to the broader ASEAN market - one of the world’s fastest-growing economic regions. Setting up here is a strategic advantage for new businesses - with straightforward trade opportunities with neighbouring countries and direct access to regional supply chains.

Skilled and cost-effective workforce

The country’s large talent pool is particularly strong in IT, customer service, and business process outsourcing² - all flourishing digital-first sectors. The workforce’s English proficiency gives businesses a clear advantage when dealing with international clients and partners. Labour costs remain competitive compared to many Western countries, without compromising on skill levels.

Government support and digitalisation

Recent years have seen significant improvements in business registration processes. The Securities and Exchange Commission (SEC) now uses a digital ZERO queueing platform and the eSPARC system for online processing, cutting down waiting times. Various government agencies offer incentives through programmes like those run by the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA).

The government has also liberalised foreign investment rules in several sectors, opening up more opportunities for international entrepreneurs.

BOI and PEZA incentives

The BOI offers 4-6 year income tax holidays for priority sectors.³ The PEZA provides similar tax holidays plus a 5% special corporate tax rate, though businesses must locate within economic zones.³ Aligning your business with the Strategic Investment Priority Plan maximises your chances of receiving these benefits.

Startup support programmes

The Innovative Startup Act (Republic Act 11337) provides various benefits for qualifying startups.⁴ The government is developing a startup visa programme to attract foreign entrepreneurs. The Startup Venture Fund offers seed to Series B funding for eligible businesses.⁵

Innovation ecosystem developments

The Philippine Innovation Hub launched in Marikina in April 2025, providing a physical space for startups and innovation-focused companies.⁶ Philippine Startup Week, scheduled for November 2025, brings together the startup community for networking and learning opportunities.⁷ Various university and private accelerators like QBO and IdeaSpace offer mentorship and funding opportunities.

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Understanding business structures in the Philippines

Choosing the right business structure affects your liability, tax obligations, and capital requirements. Here’s a breakdown of your main options:

Structure	Ownership	Registration Body	Minimum Capital	Key Features
Sole Proprietorship	Filipino only	DTI	No minimum	Simple to set up, owner has full liability
Partnership	Filipino/Foreign	SEC	No minimum	Shared resources and liability between partners
Corporation	Filipino/Foreign	SEC	PHP 5,000 (domestic); USD 200,000 (foreign)⁸	Limited liability, suitable for growth-oriented businesses
One Person Corporation	Filipino/Foreign	SEC	PHP 5,000⁸	Single owner with limited liability protection
Branch/Representative Office	Foreign	SEC	USD 200,000⁸	Allows foreign companies to test the market

*Details accurate as of 14 October 2025

➡️Find out more about setting up a small business here.

Foreign ownership rules in 2025

Foreign investors can now own 100% of businesses in most sectors, except for those listed on the Foreign Investment Negative List (FINL).⁹ Key restricted sectors include mass media, land ownership, and certain public utilities.

If you’re a foreign-owned business targeting the domestic market, you’ll typically need minimum paid-up capital of USD 200,000.⁹ However, export enterprises that export at least 60% of their output have relaxed capital requirements.⁸ The retail sector has opened up considerably - minimum capital requirements have dropped from USD 2.5 million to PHP 25 million.⁸

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How to register a business in the Philippines

Once you’ve chosen your business structure, you’ll need to work through the registration process. Whilst it involves several steps and different government agencies, recent digital improvements have made things considerably smoother than they used to be. Here’s what you need to do.

Before you register

Business name reservation

Start by reserving your business name. Sole proprietorships use the DTI’s Business Name Registration System (BNRS), whilst corporations and partnerships register through the SEC’s eSPARC platform.

Document preparation

You’ll need to prepare several documents depending on your business structure. Corporations require Articles of Incorporation, Bylaws, and a Treasurer’s Affidavit. All business types need proof of address and valid identification documents.

Treasurer-in-Trust Fund account

Corporations must open a Treasurer-in-Trust Fund (TITF) account to hold their minimum paid-up capital. You’ll need a bank certificate from this account for your SEC submission.

When your paperwork’s sorted

With all your documents in order, you’re ready to register with the various government bodies. Each agency serves a specific purpose, and you’ll need approvals from all of them before you can legally operate.

DTI or SEC registration

The SEC’s digital platforms have made this process much smoother. Online processing through eSPARC significantly reduces waiting times compared to physical applications.

Barangay clearance

This is your first required permit, issued by your local Barangay. You’ll need an application form, proof of business identity, and address verification. Fees typically range from PHP 300-500, and the clearance is valid for the calendar year of issuance.¹⁰

Mayor’s permit (business permit)

The City or Municipal Business Permits and Licensing Office (BPLO) issues this essential permit. You’ll also need supporting permits like fire safety, sanitary, and occupancy permits. Fees range from PHP 2,000-5,000, with higher rates in Metro Manila.¹⁰ This permit must be renewed annually by 20 January.

BIR registration

You have two options for registering with the Bureau of Internal Revenue: online through the NewBizReg Portal or in person at your Revenue District Office (RDO). Corporations file Form 1903, whilst sole proprietors use Form 1901. Registration fees are PHP 500 plus PHP 30 documentary stamp tax.¹⁰ Online processing takes about three working days, and annual renewal is required by 31 January.

Employer registration

If you’re hiring employees, you must register with the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG) before your first payroll. Each agency has separate application processes.

Opening a business bank account

You’ll need your SEC or DTI certificates, Articles of Incorporation or Bylaws, a Board Resolution authorising account opening, and valid IDs. Most local corporate banks require minimum deposits of PHP 50,000-100,000. Foreign-owned businesses need a Certificate of Authority to Operate.

The whole process usually takes 20-35 business days, though sole proprietors using digital processing can complete it faster.

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Costs and investment requirements for 2025

Here’s what you can expect to pay when setting up your business, from registration fees to minimum capital requirements.

Registration costs breakdown

Item	Cost Range¹⁰
DTI Business Name Registration	PHP 230-530
Barangay Clearance	PHP 300-500
Mayor’s Permit	PHP 2,000-5,000
BIR Registration	PHP 530 (PHP 500 + PHP 30 DST)
Books and Official Receipts	PHP 2,500-5,500

*Details accurate as of 14 October 2025

Understanding your tax obligations

Here’s a quick overview of the main taxes you’ll need to know about - though it’s worth getting professional advice for your specific situation.

Corporate income tax

The standard corporate income tax rate in the Philippines is 25% for large corporations. Micro, small, and medium enterprises (MSMEs) with assets of PHP 100 million or less and net income of PHP 5 million or less qualify for a reduced 20% rate. After the fourth year of operation, a minimum corporate income tax of 2% applies.¹¹

Individual and sole proprietor tax

Sole proprietors can choose between graduated tax rates or an 8% flat tax, capped at PHP 3 million in revenue.¹¹

VAT and other taxes

Businesses with annual turnover above PHP 3 million must register for Value Added Tax (VAT). Those below this threshold pay percentage tax instead.¹¹

💡Check out our helpful resource on: ➡️Tax for Small Businesses in the Philippines

Annual compliance requirements

You must renew your business permit by 20 January each year. BIR filing deadlines fall on 31 January annually.¹¹ If you have employees, you'll make monthly remittances to SSS, PhilHealth, and Pag-IBIG.

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Managing business finances and international payments

Getting your business registered is one thing - setting up your financial operations properly is another. How you manage money from the start affects everything from cash flow to how easily you can work with international clients and suppliers.

Initial capital

Capital requirements depend on your business structure and ownership. Domestic corporations need a minimum of PHP 5,000. And, as we’ve seen, foreign-owned businesses with over 40% foreign ownership typically need USD 200,000 as a standard requirement.⁸

If you’re exporting at least 60% of what you produce, you only need PHP 5,000. Advanced technology businesses get a reduced requirement of USD 100,000, and the same applies if you’re planning to employ 50 or more people. For retail businesses with foreign ownership, the requirement is PHP 25 million.⁸

Securing funding

Once you’ve covered the minimum capital, you’ll need to think about how you’ll fund your business operations and growth. Your options include personal savings, bank loans from local or international lenders, investments from angel investors or venture capital firms, government grants and incentive programmes, and crowdfunding platforms. The Philippine startup ecosystem has grown a lot in recent years, with more investors actively looking for promising businesses to back.

Managing team expenses

For businesses with multiple employees, a corporate card system can simplify expense tracking and management. Rather than employees using personal cards and filing reimbursement claims, business cards let them spend company money directly, whilst giving you visibility and control over purchases. This makes month-end reconciliation much simpler and keeps personal and business finances properly separated.

Managing international transactions efficiently

Many Philippine businesses, particularly those selling services or products internationally, struggle with receiving payments from foreign clients and managing multiple currencies. Traditional bank accounts weren’t built for this - they come with high fees for international transactions, poor exchange rates, and complicated processes.

This is where having the right financial setup from day one makes a real difference. A multi-currency account designed for international business can save you significant money and administrative headaches as you grow.

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Ongoing compliance and growth

Registration isn’t a one-time event. Running a business in the Philippines means keeping up with annual renewals, tax filings, and regulatory requirements. Miss a deadline and you could face penalties or complications that slow your business down.

Renewing permits

Business permits must be renewed annually with local government units. Your Mayor’s Permit needs renewal by 20 January each year, and missing this deadline can result in penalties or business closure. Keep track of renewal dates and gather required documents early to avoid last-minute rushes.

Tax filings

You must file quarterly and annual tax returns with the BIR and comply with all tax regulations. Corporate income tax returns are due annually, whilst VAT-registered businesses file monthly or quarterly returns depending on their turnover. Late filing comes with penalties and interest charges, so staying on top of deadlines matters.

Labour law compliance

If you have employees, ensure your business adheres to labour laws regarding employee rights, wages, and working hours. This includes paying at least the minimum wage, providing legally mandated benefits, and following proper procedures for hiring and termination. Regular remittances to SSS, PhilHealth, and Pag-IBIG must be made monthly.

Exploring incentives

Once your business is established, investigate government grants, tax exemptions, and accreditations like PEZA and BOI to support your business growth. These programmes can provide significant tax savings and other benefits, particularly if your business operates in priority sectors or generates substantial employment.

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Conclusion

The Philippines offers real opportunities for entrepreneurs. With a growing economy, strategic location, skilled workforce, and government support that’s actually improving, the conditions are there for business success.

Getting the foundations right matters. Choose the right business structure, understand your registration obligations, and set up efficient financial systems from the start. If you’re planning to work internationally, having the right tools to handle multiple currencies and cross-border payments means you can focus on growing your business instead of dealing with complicated banking fees.

➡️Get started with Wise Business today.

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Sources:

1 - Global Innovation Index 2025

2 - Cloudstaff - Philippines Digital Native Workforce

3 - BOI - FAQs

4 - Innovative Startup Act RA 11337

5 - Start-Up Venture Fund

6 - DTI - Unveils Innovation Hub

7 - PH Start-Up Week

8 - Incorporation.ph - Paid-Up Capital

9 - Incorporation.ph - Incorporation Options

10 - Taxumo - How to Register a Business

11 - PWC - Corporation Tax Rates 2025

Sources checked on 14th October 2025.