Paid-up Capital

What is Paid-Up Capital in the Philippines?

A Paid-up capital, also known as paid in capital or contributed capital represents money that is not borrowed, it is the amount of money that is actually received from its investors or shareholders in exchange for shares of stocks. Paid-up capital may be in the form of cash, real property, service, equipment or anything of value.

Shareholders: Shareholders or stockholders are the owners of a stock corporation.

What is Authorized Capital?

An Authorized capital is the maximum amount of capital which a company is given permission to raise via the sale of stock. Should a company need additional equity in the future, it must apply for a much higher authorized capital than its current need to be able to raise additional equity through sale of its shares. At least twenty-five percent (25%) of authorized capital stock must be subscribed and twenty-five (25%) percent of the authorized capital stock must be paid at the time of incorporation. Paid-up capital shall in no case be less than five thousand (P5,000.00) pesos.

What is Subscribed Capital?

A Subscribed capital refers to the number of shares issued to the shareholders.

Paid-Up Capital Based on Industry

  • Break Bulk Agent: P 250,000.00
  • Cargo Consolidator: P 400,000.00
  • Financing Company-Main
    • 1st class cities: P 10,000,000.00
    • Other cities: P 5,000,000.00
    • Municipalities: P 2,500,000.00
  • Financing Company-Branch
    • 1st class cities: P 1,000,000.00
    • Other Cities P: 500,000.00
    • Municipalities: P 250,000.00
  • Freight Forwarders
    • Domestic: P 250,000.00
    • International: P 2,000,000.00
  • Health Maintenance Organization: P 10,000,000.00
  • Insurance
    • Insurance Broker: P 20,000,000.00
    • Reinsurance Broker: P 20,000,000.00
    • Insurance Broker and Reinsurance Broker: P 50,000,000.00
    • Life Insurance Company: P 1,000,000,000.00
    • Non-Life Insurance Company: P 1,000,000,000.00
    • Reinsurance Company: P 2,000,000,000.00
  • Investment Adviser/Manager: P 10,000,000.00
  • Investment Company: P 50,000,000.00
  • Investment House: P 300,000,000.00
  • Lending Company-Main: P 1,000,000.00
  • Lending Company-Branch
    • 1st class cities: P 300,000.00
    • Other Cities: P 150,000.00
    • Municipalities: P 75,000.00
  • Mining
    • (Authorized Capital Stock): P 100,000,000.00
    • (Paid-up Capital Stock): P 6,250,000.00
  • Non-Vessel Operating Common Carrier: P 4,000,000.00
  • Pawnshop: P 100,000.00
  • Pre-Need Plan Issuer: P 100,000,000.00
  • Pre-Need Plan Agent: P 5,000,000.00
  • Recruitment for Local Employment
    • Corporation: P 500,000.00
    • Partnership: P 200,000.00
  • Recruitment for Overseas Employment: P 5,000,000.00
  • Retail Trade with Foreign Equity: P 2,500,000.00
  • School (for stock corporations)
    • Elementary Education: P 1,000,000.00
    • Elementary & Secondary Education: P 2,500,000.00
    • Elementary, Secondary, Tertiary: P 5,000,000.00
  • Security Agency: P 500,000.00
  • Securities Broker/Dealer (New/SRO-Member): P 100,000,000.00
  • Securities Broker/Dealer (Existing/SRO-Member): P 10,000,000.00
  • Securities Broker/Dealer in Proprietary Shares (Non-SROMember): P 5,000,000.00
  • Special Purpose Vehicle: P 31,250,000.00
  • Special Purpose Corporation: P 5,000,000.00
  • Transfer Agent: P 1,000,000.00

Based on Equity

  • Domestic Corporations with more than 40% foreign equity
    • Domestic Market Enterprise: US $ 200,000.00
    • Export Market Enterprise: P 5,000.00
  • Foreign Branch Office
    • Domestic Market Enterprise: US $ 200,000.00
    • Export Market Enterprise: P 5,000.00
  • Partnership with foreign partner
    • Domestic Market Enterprise: US $ 200,000.00
    • Export Market Enterprise: P 3,000.00
  • Foreign Representative Office: US $ 30,000.00
  • Regional Area Headquarters (RHQ): US $ 50,000.00
  • Regional Operating Headquarters (ROHQ): US $ 200,000.00

(P) Philippine Peso
(US$) U.S. Dollar

Source: Securities and Exchange Commission


Tax Incentives in the Philippines

The Philippine government encourages foreign investors to incorporate their businesses in the country to help in the creation of high-quality jobs, increase volume and value of exports, and to fuel economic growth. Tax incentives are given to selected projects or areas of activities not only to promote the country but to obtain the best return on capital for foreign investors.

These selected areas of activities or Ecozones/Special Economic Zones may contain industrial estates, export processing zones, free trade zones, and tourist or recreational centers. Ecozones have the potential to be developed into the following:

  • Industrial
  • Tourist
  • Recreational
  • Commercial
  • Banking
  • Investment
  • Financial Centers

Economic Zones

  • Board of Investments (BOI) – A government agency promoting investments in desirable areas of economic activities in the country. (i.e. Business Process Outsourcing, Construction, Power and Infrastructure, Telecommunications, etc.)
  • Philippine Economic Zone Authority – A government agency which promotes and grants incentives to export-oriented manufacturing and service facilities inside selected areas in the country known as PEZA Special Economic Zones

Other Investment Promotion Agencies

The 10th Foreign Investment Negative List (FINL)

Although the Philippine government recognizes the contribution of foreign investors and encourages foreign investment in the Philippines, their participation in economic activities within the country is regulated through Republic Act No. 7042 or the Foreign Investments Act (FIA). Executive Order No. 184 or The 10th Regular Foreign Investment Negative List (FINL) provides information on economic activities which are reserved to Filipino nationals and areas of investment where foreigners can participate in.

The FINL consists of List A and B. List A contains areas of investment where foreign ownership is limited by mandate of the Philippine Constitution or by specific laws. List B contains areas of investment where foreign ownership is limited for reasons of security, defense, risk to health and morals, and protection of local small-and-medium enterprises (SMEs).

The regular Negative List is updated and issued every two years and the eleventh version has been drafted and submitted to the Office of the President last October 2017 and is pending for approval from President Rodrigo Duterte.


No Foreign Equity

  • Mass media except recording
  • Practice of Professions
    • Pharmacy
    • Radiologic and x-ray technology
    • Criminology
    • Forestry
    • Law
  • Retail trade enterprises with paid-up capital of less than US$ 2,500,00
  • Cooperatives
  • Private Security Agencies
  • Small-scale Mining
  • Utilization of Marine Resources in archipelagic waters, territorial sea, and exclusive economic zone as well as small-scale utilization of natural resources in rivers, lakes, bays, and lagoons
  • Ownership, operation, and management of cockpits
  • Manufacture, repair, stockpiling, and/or distribution of nuclear weapons
  • Manufacture, repair, stockpiling, and/or distribution of biological, chemical and radiological weapons, and anti-personal mines (various treaties to which the Philippines is a signatory and conventions supported by the Philippines)
  • Manufacture of firecrackers and other pyrotechnic devices

Up to Twenty Percent (20%) Foreign Equity

  • Private radio communication network

Up to Twenty-Five Percent (25%) Foreign Equity

  • Private recruitment, whether for local or overseas employment
  • Contracts for the construction and repair of locally-funded public works, except:
    • Infrastructure/development projects covered in RA 7718; and
    • Projects which are foreign-funded or assisted and required to undergo international competitive bidding of contracts for construction of defense-related structure

Up to Thirty Percent (30%) Foreign Equity

  • Advertising

Up to Forty Percent (40%) Foreign Equity

  • Exploration, development, and utilization of natural resources
  • Ownership of Private Lands
  • Operation and management of public utilities
  • Educational institutions other than those established by religious groups and mission boards
  • Culture, production, milling, processing, trading except retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the by-products thereof
  • Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation
  • Facility operator of an infrastructure or a development facility requiring a public utility franchise
  • Operation of deep sea commercial fishing vessels
  • Adjustment companies
  • Ownership of condominium units


Up to Forty Percent (40%) Foreign Equity

  • Manufacture, repair, storage, and/or distribution of products and/or ingredients requiring Philippine National Police (PNP) clearance:
    • Firearms (handguns to shotguns), parts of firearms and ammunition therefore, instruments or implements used or intended to be used in the manufacture of firearms
    • Gunpowder
    • Dynamite
    • Blasting supplies
    • Ingredients used in making explosives
      • Chlorates of potassium and sodium
      • Nitrates of ammonium, potassium, sodium barium, copper (11), lead (11), calcium and cuprite
      • Nitric acid
      • Nitrocellulose
      • Perchlorates of ammonium, potassium and sodium
      • Dinitrocellulose
      • Glycerol
      • Amorphous phosphorus
      • Hydrogen peroxide
      • Strontium nitrate powder
      • Toluene
    • Telescopic sights, sniper scope and other similar devices

However, the manufacture or repair of these items may be authorized by the Chief of the PNP to foreign nationals; provided that a substantial percentage of output, as determined by the said agency, is exported and the extent of foreign equity ownership allowed shall be specified in the said authority/clearance.

  • Manufacture, repair, storage, and/or distribution of products requiring Department of National Defense (DND) clearance;
    • Guns and ammunition for warfare
    • Military ordnance and parts thereof (e.g., torpedoes, depth charges, bombs, grenades, missiles)
    • Gunnery, bombing, and fire control systems and components
    • Guided missiles/missile systems and components
    • Tactical aircraft (fixed and rotary-winged), parts and components thereof
    • Space vehicles and component systems
    • Combat vessels (air, land, and naval) and auxiliaries
    • Weapons repair and maintenance equipment
    • Military communications equipment
    • Night vision equipment
    • Stimulated coherent radiation devices, components, and accessories
    • Armament training devices
    • Others as may be determined by the Secretary of the DND

However, the manufacture or repair of these items may be authorized by the Secretary of National Defence to foreign nationals; provided that a substantial percentage of output, as determined by the said agency, is exported and the extent of foreign equity ownership allowed shall be specified in the said authority/clearance.

  • Manufacture and distribution of dangerous drugs
  • Sauna and steam bathhouses, massage clinics and other like activities regulated by law because of risks posed to public health and morals
  • All forms of gambling, except those covered by investment agreements with PAGCOR
  • Domestic market enterprises with paid-in equity capital of less than the equivalent of US$200,000
  • Domestic market enterprises which involve advanced technology or employ at least fifty (50) direct employees with paid-in equity capital of less than the equivalent of US$100,000

Source: Securities and Exchange Commission (SEC)

Other activities with Foreign Equity

Domestic Market Enterprise

A Domestic Market Enterprise is an enterprise which provides services or produces goods for sale for the domestic market or exports less than sixty (60%) percent of its products/goods or services abroad.

Can foreign nationals own 100% of a domestic enterprise?

Foreign nationals can own as much as one hundred (100%) percent equity of a domestic enterprise if the business activities that the enterprise will be engaging in is not part of the 10th FINL and paid-up capital is at least US$200,000. The paid-up capital may be lowered to US$100,000 if the business activities falls under advanced technology or if the enterprise shall directly employ at least fifty (50) employees.

Export Market Enterprise

As a general rule, there are no restrictions as to the extent of foreign ownership of an Export Enterprise so long as the enterprise exports at least sixty (60%) percent of its products/goods or services abroad.


Under the Retail Trade Liberalization Law, retailing may be fully foreign owned provided that the minimum paid-up capital of US$2,500,000.00 is met. A paid-up capital less than US$2.5M is reserved for Filipino citizens.