Minimum Capital for a Foreign-Owned Company in the Philippines

By Jot Jacosalem · Roll No. PENDING · IBP PENDING
Last updated September 7, 2026

There is no single minimum capital for a foreign-owned Philippine company. The figure depends on what the company sells, to whom, and how much of it is foreign-owned. Answering those three questions in the right order is most of the work.

Why the question has no single answer

Two statutes and one corporate rule are in play, and they answer different questions.

• The Revised Corporation Code sets no minimum capital at all. Whatever figure you have been quoted, it does not come from here.
• The Foreign Investments Act sets thresholds based on whether the company serves the domestic market or exports, and on how much foreign equity it carries. The Foreign Investment Negative List is the instrument through which those thresholds and the sector equity caps are published, so it is where you look them up rather than a separate source of rules.
• Sector statutes set their own figures that displace the general rule. Retail is the most common, and it changed in 2026.

A company that is 100% Filipino-owned faces none of the Foreign Investments Act thresholds. A company with 40% foreign equity in an unrestricted activity usually faces none of them either. They bite when foreign equity goes above 40% and the company sells into the Philippine market.

Where the ₱5,000 figure went

Older guides, and a good deal of advice still circulating, quote a minimum paid-up capital of ₱5,000 and a rule that 25% of the authorised capital stock must be subscribed and 25% of that subscription paid at incorporation. Both came from the old Corporation Code.

Section 12 of the Revised Corporation Code, Republic Act No. 11232, now provides that stock corporations shall not be required to have minimum capital stock, except as otherwise specially provided by special law. The 25% and 25% rule no longer applies at incorporation. It survives for increases in capital stock, which is a different transaction.

So the corporate law floor for a Philippine company is zero. Every figure in the rest of this guide comes from a special law of the kind Section 12 refers to.

The Foreign Investments Act baseline

Export enterprises

An export enterprise is a manufacturer, processor or service enterprise that exports at least 60% of its output, or a trader that purchases products domestically and exports at least 60% of those purchases. That second limb matters for foreign-owned sourcing and trading operations, which are often assumed to fall outside the definition. A domestic market enterprise produces goods or renders services for the local market entirely, or exports a portion of its output but fails to consistently export at least 60% of it.

Export enterprises may be 100% foreign-owned with no Foreign Investments Act capital minimum, provided the activity is not on List A or List B of the Negative List. They register with the Board of Investments and submit the reports needed to show continuing compliance with the export requirement.

Failing the ratio has two consequences, and the second is the one that matters. The Board of Investments advises the SEC or the DTI, which then orders the enterprise to reduce its domestic market sales to no more than 40% of total production. Failure to comply with that order, without justifiable reason, subjects the enterprise to cancellation of its SEC or DTI registration and to the penalties under Section 14 of the Act.

Domestic market enterprises

Where foreign equity exceeds 40% and the company serves the domestic market, the general rule is a minimum paid-in equity capital of US$200,000.

Section 8 of the Act, as amended by Republic Act No. 11647, puts it from the other direction: except as otherwise provided under the Retail Trade Liberalization Act and other relevant laws, micro and small domestic market enterprises with paid-in equity capital less than the equivalent of US$200,000 are reserved to Philippine nationals.

That carve-out for retail is not decorative. It is why the retail section of this guide exists.

The US$100,000 route

A micro or small domestic market enterprise that is not a Philippine national may operate on a minimum paid-in capital of US$100,000 if it satisfies any one of the following:

1. The enterprise involves advanced technology, as determined by the Department of Science and Technology.
2. The enterprise is endorsed as a startup or startup enabler by the lead host agencies under Republic Act No. 11337, the Innovative Startup Act. The endorsement comes from the lead host agencies, which are the DTI, the DOST and the DICT. It is not a self-classification.
3. A majority of its direct employees are Filipinos, and in no case fewer than 15.

These are alternatives. The statute separates all three limbs with “or”, and one is enough. Some press coverage at the time reported them as cumulative, which would make the route nearly unusable.

One condition travels with this provision and is routinely left out of summaries. A registered foreign enterprise that employs foreign nationals and enjoys fiscal incentives must implement an understudy or skills development program to ensure the transfer of technology or skills to Filipinos, and compliance is monitored by the Department of Labor and Employment. A company using the 15-employee route is frequently in incentive territory as well.

Retail trade works differently, and changed in 2026

Retail is where most foreign investors meet a capital figure, and it is the area where published guidance is most likely to be out of date. The Retail Trade Liberalization Act, as amended by Republic Act No. 11595, displaces the Foreign Investments Act thresholds. Executive Order No. 113 then changed the position for smaller retailers with effect from 2 May 2026.

What changed on 2 May 2026

Under the 12th Regular Foreign Investment Negative List, issued in 2022, retail trade enterprises with paid-up capital of less than ₱25,000,000 sat in the no foreign equity column, alongside cockpits, small-scale mining and private security agencies. Below the threshold, retail was closed to foreign investors entirely.

The 13th Regular Foreign Investment Negative List, promulgated by Executive Order No. 113 and effective 2 May 2026, moved those enterprises to the up to 40% column. Retail enterprises below the ₱25,000,000 threshold are no longer reserved wholly to Filipinos, and may now admit minority foreign participation provided Philippine nationals retain at least 60% ownership and control.

The legal basis for the change is worth understanding, because an executive order cannot amend a statute. The Retail Trade Liberalization Act sets conditions for foreign retailers. A corporation at least 60% Filipino-owned is a Philippine national under the Foreign Investments Act, and so is not a foreign retailer at all. That reading had support and had been contested for years. The 13th Negative List is best understood as the executive adopting it, and commentary has described the entry as clarifying an area that previously gave rise to differing interpretations.

The two situations

The 40% line is the switch. Below it, the Retail Trade Liberalization Act capital rules are irrelevant. Above it, they govern completely.

The conditions that come with foreign retailer status

Section 5 of the Act as amended sets three: minimum paid-up capital of ₱25,000,000; the foreign retailer’s country of origin does not prohibit the entry of Filipino retailers; and, where the retailer operates more than one physical store, minimum investment per store of at least ₱10,000,000.

The per-store requirement carries a grandfathering proviso for foreign investors and retailers already legitimately engaged in retail trade who were not required to comply with it when Republic Act No. 11595 took effect on 21 January 2022.

What else changed in 2021 and 2022

Republic Act No. 11595 was signed 10 December 2021, published in the Official Gazette on 6 January 2022, and took effect 21 January 2022. Its implementing rules were issued 9 March 2022, published 12 March 2022, and took effect 27 March 2022. Alongside the capital reduction it:

• removed the four investment categories under the old Section 5;
• removed the Board of Investments pre-qualification certificate;
• removed the requirement that retail enterprises above 80% foreign ownership offer 30% of equity to the public through a Philippine stock exchange within eight years;
• reduced the penalties for violation to imprisonment of four to six years, from a previous six to eight, and a fine of ₱1,000,000 to ₱5,000,000, from a previous maximum of ₱20,000,000;
• split monitoring jurisdiction: the SEC over foreign partnerships, associations and corporations, the DTI over foreign single proprietors;
• required compliance with the Labor Code provisions on determining the non-availability of a competent, able and willing Filipino before engaging a foreign national.

What the numbers are, and what they were

Published summaries of the 2021 amendment disagree with each other on the before-figure, and at least one widely reproduced version states that the requirement was reduced from ₱25 million to ₱25 million. The actual movement:

The middle row is the one that gets lost. Republic Act No. 11595 removed the distinction between a regular foreign retailer and an enterprise specialising in high-end or luxury products. For a general retailer the 2021 amendment was a large reduction. For a single-store luxury retailer it was closer to a doubling of the floor, and the per-store investment requirement now applies to it as well.

Whether ₱25 million will change

Section 6 of the Act as amended requires the DTI, the SEC and NEDA to review the required minimum paid-up capital every three years from effectivity, and provides that each shall report its recommendation to Congress.

The first review fell due in January 2025, three years after the 21 January 2022 effectivity. No recommendation appears to have been published, and Executive Order No. 113 in April 2026 left the ₱25,000,000 figure untouched. The next review falls due in January 2028.

Whatever any review recommends, the agencies cannot change the figure themselves. The review produces a recommendation to Congress, and the amount is set by statute, so it moves only by legislation. A foreign retailer planning against ₱25 million is planning against a figure that is stable until Congress acts, not one that a department circular could revise.

What paid-up capital means in practice

Meeting the number on paper is not the whole obligation.

Proof at registration. A foreign retailer registering with the SEC or the DTI submits a certification from the Bangko Sentral ng Pilipinas of the inward remittance of its capital investment, or, in lieu of that, other proof certifying that the capital investment is deposited and maintained in a bank in the Philippines.

The capital must stay. The foreign retailer is required to maintain the minimum paid-up capital in the Philippines at all times. Failure to maintain it, before notifying the SEC or DTI, exposes the retailer to penalties or restrictions on future trading activities or business in the Philippines.

Actual use is monitored. The SEC or the DTI, as appropriate, monitors the actual use of the minimum paid-up capital in Philippine operations. The capital may be used to purchase assets; it is not required to sit idle.

Repatriation requires notice. A foreign retailer intending to repatriate its capital and cease operations notifies the SEC or the DTI.

Per-store investment is measured broadly. The ₱10,000,000 per store is defined to include the value of gross assets, tangible and intangible, including buildings, leaseholds, furniture, equipment, inventory, and common use investments and facilities such as administrative offices and warehouses, pro-rated among the stores they serve.

A terminology trap worth noticing

The Foreign Investments Act speaks of paid-in equity capital. The Retail Trade Liberalization Act speaks of paid-up capital. Both are distinct from authorised capital stock and from subscribed capital stock, which are the figures that appear on the articles of incorporation and which a foreign investor is often quoted first.

A company can have a large authorised capital stock and fail a paid-in threshold. When an adviser quotes a capital figure, the question to ask is which of the four they mean.

Working out your own number

1. Is the activity on List A or List B of the Negative List? Check the 13th list, effective 2 May 2026, not an earlier one. The entry there governs whether your intended foreign equity is permitted at all, and it is also where the capital thresholds discussed here are published.
2. Is it retail? If yes, the Retail Trade Liberalization Act governs and the Foreign Investments Act thresholds do not. Go to the two-situation table above.
3. Will you export at least 60% of output, or of domestic purchases if you are a trader? If yes, no Foreign Investments Act minimum applies, and the export ratio becomes an ongoing reporting obligation rather than a one-time test.
4. Is foreign equity above 40%? If no, the thresholds in this guide generally do not apply.
5. Otherwise: US$200,000 paid-in equity capital, or US$100,000 on any one of the three conditions above.
6. Check for a sector statute. Financing companies, banks, insurance, schools and others carry their own capital rules that this guide does not cover. The Foreign Investments Act expressly does not apply to banking and other financial institutions supervised by the Bangko Sentral ng Pilipinas.

This guide is one of the foreign investment guides, which are read in order there and dated against the instruments they rest on.

This guide sits under the firm's foreign investment and market entry practice.

This guide states the law as at the date above. It is general information about Philippine law and not legal advice, and reading it does not create a lawyer-client relationship.