Starting a business in
🇵ðŸ‡Philippines
Checked November 4, 2026 · How we score
Corporate tax
25%
Top income tax
35%
Setup from
$3,000
all-in, first year
Time to form
6 weeks
visit usually needed
Taxes in Philippines
| Corporate income tax | 25% 25% regular corporate income tax. Domestic corporations with net taxable income of PHP 5m or less and total assets under PHP 100m (excluding land) pay 20%. PEZA and other registered export enterprises can get a 5% gross income earned tax or income tax holidays of 4-7 years under CREATE and CREATE MORE, followed by 5-27% rates and enhanced deductions. A 15% top-up tax is planned for large multinational groups. |
|---|---|
| Personal income tax (top) | 35% Progressive rates from 0% to 35% (35% above PHP 8m). Self-employed individuals and professionals with gross receipts of PHP 3m or less can opt for 8% on gross receipts above PHP 250,000 instead. Residents are taxed on Philippine-source income only if they are non-citizens (resident aliens) and on worldwide income if they are citizens. |
| Tax system | Territorial (foreign income untaxed) |
| Capital gains tax | 15%15% final tax on net gains from sale of unlisted domestic shares; sale of listed shares attracts a stock transaction tax of 0.1% of the gross selling price. Real property gains are taxed at 6% of the selling price or zonal value. |
| Dividend withholding (non-residents) | 25% |
| VAT / GST | 12% |
| Social security | SSS, PhilHealth and Pag-IBIG contributions apply to employees and employers. Dividends to non-resident foreign corporations are taxed at 25% (15% if the foreign country allows a tax credit); treaties reduce this. |
Forming a company in Philippines
| Usual entity | Domestic corporation (SEC-registered) |
|---|---|
| Minimum capital | $200k |
| Setup cost (all-in) | $3,000–$8,000 |
| Annual running cost | $3,000–$7,000 |
| Time to incorporate | 6 weeks |
| Form remotely as a foreigner | No |
| Local director required | Yes |
| Local address required | Yes |
| Owners on public register | Yes |
| Statutory audit for small companies | Yes |
| Business banking for non-residents | Hard |
Residency and visas
A digital nomad visa framework (Executive Order 86 of 2025, about $24,000 a year of foreign income) has been reported, but sources conflict on whether it is yet open to applicants, so confirm with the Bureau of Immigration before planning around it. The Special Investor's Resident Visa (SIRV) requires a $75,000 investment, and retirees can use the SRRV with a deposit starting around $20,000. Foreigners who run a company usually need a 9(g) work visa and an Alien Employment Permit.
| Digital nomad visa | No |
|---|---|
| Golden visa | Yes, from $75k |
| Ease of residency for founders | 3/5 (1 = easiest) |
Special tax regimes
CREATE MORE incentives
Income tax holidays of 4-7 years, then a 5% gross income tax or enhanced deductions for 10+ years for registered export and strategic enterprises (PEZA, BOI).
Special Investor's Resident Visa (SIRV)
Permanent resident visa for foreigners who invest at least $75,000 in an approved enterprise.
Special Resident Retiree's Visa (SRRV)
Indefinite-stay visa for foreigners aged 35 and over with a qualifying deposit from about $20,000 to $50,000 depending on age and pension.
8% flat tax option
Self-employed individuals with gross receipts up to PHP 3m can pay 8% on gross receipts above PHP 250,000 instead of graduated rates.
Pros and cons
Why founders pick Philippines
- Large English-speaking talent pool
- Attractive PEZA and BOI incentives for exporters
- SRRV and SIRV residency options
- Low operating costs
Watch out for
- $200,000 minimum paid-in capital for most foreign-owned domestic-market companies
- Majority of directors must be residents of the Philippines
- Bureaucratic registration and many local permits
- Banking and foreign exchange paperwork are heavy for foreigners
Best for: BPO, IT services and outsourcing operations · Export-oriented businesses using PEZA zones · Retirees using the SRRV
Philippines: common questions
What is the corporate tax rate in the Philippines?
The regular corporate income tax rate is 25%, reduced to 20% for domestic corporations with net taxable income of PHP 5 million or less and assets under PHP 100 million. Registered export enterprises can get income tax holidays or a 5% gross income tax under CREATE MORE.
Can a foreigner own 100% of a company in the Philippines?
Yes in most sectors after the Foreign Investments Act, if the company is an export enterprise or has paid-in capital of at least $200,000 (or $100,000 for companies with advanced technology or at least 15 Filipino employees). Some activities, such as land ownership and mass media, are restricted.
Does the Philippines have a digital nomad visa?
A framework under Executive Order 86 (2025) has been announced for remote workers with income of about $24,000 a year, but sources conflict on its status and implementing rules. Check the Bureau of Immigration or DFA e-visa portal before applying.
How much does it cost to set up a company in the Philippines?
Incorporation and permits through an agent typically cost about $3,000 to $8,000, plus the capital requirement. Annual compliance with BIR, SEC and local permits usually costs $3,000 to $7,000.
What is the dividend withholding tax in the Philippines?
Dividends paid to non-resident foreign corporations are taxed at 25%, reduced to 15% if the foreign country allows a credit, and treaties can reduce it further. Dividends to non-resident aliens not engaged in trade are taxed at 25%.
Sources
- Bureau of Internal Revenue (Philippines)
- Securities and Exchange Commission (Philippines)
- PwC Tax Summaries - Philippines
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.