Starting your own business is an exciting step, but in the Philippines, it also comes with a long list of rules you need to follow. Understanding Philippine business laws is key to staying compliant, avoiding penalties, and making sure your business runs smoothly from day one.
1. Foreign Investments Act (Republic Act No. 7042)
If you’re planning to work with or attract foreign partners, this is the law to watch. The Foreign Investments Act (FIA) allows foreign investors to own up to 100% of a business in the Philippines, as long as that business is not on the “Foreign Investment Negative List.”
Why it matters: This law supports economic growth by opening up more sectors to foreign capital. It’s also key for startups looking to grow fast with overseas funding or expansion.
Republic-Act-No.-70422. Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act (Republic Act No. 11534)
The CREATE Act is one of the most entrepreneur-friendly laws in recent years. It aims to lower corporate income tax rates and simplify how businesses access tax incentives—especially those affected by economic downturns like COVID-19.
Key benefits:
- Lower corporate income tax (from 30% to 25% or even 20% for smaller businesses)
- Longer periods of tax holidays and investment support
- Simplified applications for fiscal incentives
This law helps small and growing businesses breathe easier, especially in their early years.
ra 115343. Philippine Competition Act (Republic Act No. 10667)
The Philippine Competition Act keeps the playing field fair. It prohibits anti-competitive behaviors like price-fixing, monopolies, and collusion.
Why it matters: If you’re growing fast and entering competitive markets, this law keeps you in check—and protects you from bigger players using unfair tactics. It also means your own business practices must stay fair and transparent.
4. Barangay Micro Business Enterprises (BMBE) Act
If your business earns less than ₱3 million annually and falls under the micro-enterprise category, the BMBE Act can be a game-changer.
Key benefits:
- Income tax exemption
- Simplified business registration
- Access to special credit and financing programs
To apply, visit your local DTI or Barangay Hall and ask about the BMBE program. It’s a big boost for sari-sari stores, online sellers, home-based services, and startups.
BMBE_20021113-RA-9178-GMA5. Revised Corporation Code of the Philippines
The Revised Corporation Code modernized the country’s corporate laws and made it easier for people to set up and manage a corporation.
What changed:
- You can now register a corporation with just one person (One Person Corporation or OPC)
- No minimum capital requirement unless stated by special law
- Longer corporate lifespan (perpetual unless dissolved)
This is especially useful for solo entrepreneurs or family-run businesses that want the legal protection and structure of a corporation.
20190220-RA-11232-RRDKey Government Agencies That Implement These Laws
Understanding the laws is just the beginning. You’ll also need to know which agencies to work with when registering, operating, or expanding your business.
Department of Trade and Industry (DTI)
For single proprietors and small businesses, DTI is your first stop. It handles:
- Business name registration
- BMBE applications
- Consumer protection policies
- MSME development programs
Securities and Exchange Commission (SEC)
If you’re registering a partnership or corporation, SEC is your go-to agency. It oversees:
- Corporate registration
- Governance rules
- Compliance and reporting requirements
Bureau of Internal Revenue (BIR)
Once registered, every business must get a BIR Certificate of Registration. The BIR ensures you:
- Pay the correct taxes
- Issue official receipts
- File returns on time
Philippine Economic Zone Authority (PEZA)
PEZA supports businesses that operate in special economic zones (eco-zones). Benefits include:
- Income tax holidays
- Exemption from local taxes
- Simplified customs processes
Board of Investments (BOI)
The BOI provides incentives to priority sectors under the Investment Priorities Plan (IPP). Startups in manufacturing, agriculture, tech, or health can benefit from:
- Income tax holidays
- Duty-free importation of equipment
- Investment support services
Why These Business Laws Matter
Each law and agency listed above plays a part in helping you:
- Register your business legally
- Get tax relief and incentives
- Access financial support
- Avoid penalties or shutdowns
- Compete fairly in the market
By understanding Philippine business laws, you make smarter decisions and stay one step ahead—especially when regulations change or opportunities arise.
Frequently Asked Questions
Q: Do I need to register with both DTI and SEC?
A: No. Register with DTI if you are a sole proprietor. Register with SEC if you are forming a corporation or partnership.
Q: What’s the difference between BIR and DTI registration?
A: DTI registers your business name. BIR registers you as a taxpayer and gives you the authority to issue official receipts.
Q: Is there a penalty for late tax filing?
A: Yes. The BIR imposes interest, surcharge, and compromise penalties for late or incorrect filings.
Q: Can I run a business from home?
A: Yes, but you still need to register it. Home-based businesses must comply with zoning and permit requirements from the LGU.
Q: How can I get help understanding these laws?
A: You can consult with a legal adviser or visit DTI’s Negosyo Centers nationwide for free guidance.
Conclusion
Starting a business is not just about having a great idea—it’s about playing by the rules. Learning the basics of Philippine business laws puts you in control and protects your investment.
If you’re just starting out, focus on getting your legal documents in order. And if you’re already operating, review your compliance status regularly. Laws can change, but with the right knowledge and support, your business can grow with confidence.
Would you like a checklist or downloadable guide on how to register your business legally?