🇵🇭 Annual Compliance — Philippines

Ignoring the 40% foreign ownership restriction until incorporation

Fix: Check the Foreign Investment Negative List (FINL) before committing to a Philippine structure. The FINL is divided into List A (foreign ownership limited by the Constitution or specific laws) and List B (foreign ownership limited for security, defence, or SME protection reasons). If your business activity is restricted, explore PEZA registration (which can grant 100% foreign ownership for qualifying IT and export enterprises) or consider a legitimate partnership with a Filipino majority shareholder.

Not registering with PEZA before starting operations

Fix: PEZA incentives — including income tax holidays, duty-free imports, and simplified visa processing — are only available to companies that register with PEZA before commencing commercial operations. Applying retroactively is not possible. If you plan to operate in IT-BPO, manufacturing for export, or other PEZA-eligible activities, submit the PEZA application during the incorporation process, not after.

Failing to renew the Mayor's Permit annually

Fix: The local government business permit (Mayor's Permit) must be renewed every January. Late renewal incurs penalties and surcharges, and operating without a valid permit can result in closure orders from the local government unit. Calendar the renewal deadline and begin the process in December, as it requires multiple clearances (barangay, fire safety, sanitary) that take time to obtain.