3 Basic Ways to Build Your Business in the Philippines

Business leaders and entrepreneurs can attest that strategic location is one of the most important factors in creating a business. Many local and foreign investors do their incorporation in the Philippines due to the country’s economic growth, tax benefits, and hardworking citizens.

What are the different types of businesses that you can create in the Philippines? There are the six main organizations and setups.

Sole Proprietorship

This is a business owned by one individual who also has all the authority in the company. That person has full control of its assets, and is responsible for all its liabilities as well. The owner enjoys all the benefits. This type is best for smaller businesses that have a small business structure, and participate in only one or two primary objectives. Examples of this are retail stores and small franchises.


This is similar to a sole proprietorship, except there are two individuals responsible. There are two sub-types: general and limited. A general partnership is when one or both partners has unlimited liability, while a limited partnership is when some partners have liability only up to the amount of their capital contributions. An example of this is local and foreign companies doing business in the Philippines together (such as a joint venture).


These are companies that are separate and distinct from their shareholders. A corporation’s stockholders have liabilities limited to the amount of their share capital only. Since the country has no Limited Liability Corporation (LLC), a corporation is the closest type of entity. Similar to LLCs, the corporation’s structure allows the owners’ individual assets to be separate from that of the company. Corporations are great for any type of business that has a more complex structure.

Philippine corporations can be Filipino owned or foreign owned, which is important in determining certain tax programs and land ownership. A registered company is considered a Filipino corporation if at least 60% is owned by Filipinos. Once a corporation is more than 40% foreign owned, it is already considered a foreign owned domestic corporation. A company can be 100% foreign owned, as longs as it or its owners are not banned via the Foreign Investment Act.

If you are not sure how to undertake business registration in the Philippines, you can read more about the process online or seek the help of consulting companies.

About Jamie Moffet 26 Articles
Jamie Moffett is an Executive Creative Director in a renowned advertising agency in the U.S. He has written three books of short stories and esays. Links