Understanding SEC Paid-Up Capital Requirements for Different Industries in the Philippines

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When registering a corporation with the Securities and Exchange Commission (SEC) in the Philippines, one of the most important considerations is the paid-up capital requirement. Paid-up capital refers to the actual amount of money that shareholders have contributed to the company upon registration. It signifies the company’s initial financial capacity and serves as a basis for legal compliance and investor confidence.

This article provides an overview of the SEC’s paid-up capital requirements for various industries and business activities, and explains how compliance affects business registration and operations.

What is Paid-Up Capital?

Paid-up capital is the portion of authorized capital stock that has been subscribed and fully paid by shareholders. It represents the company’s initial funding that will be used for operations, asset acquisition, and compliance with industry standards.

In the Philippines, the minimum paid-up capital requirement depends on the type of business entity, industry classification, and the level of foreign ownership.

General SEC Capital Requirements

Under the Revised Corporation Code, domestic corporations with 100% Filipino ownership may be registered with as little as ₱5,000 paid-up capital. However, certain industries and foreign-owned corporations are subject to higher minimum capital requirements as prescribed by the SEC and other regulatory agencies.

Paid-Up Capital Requirements by Industry

Below are some of the most common industries and their corresponding SEC paid-up capital requirements:

Industry / Business Type	Minimum Paid-Up Capital Requirement
Domestic Corporation (Filipino-owned)	₱5,000
Foreign-Owned Corporation (less than 40% foreign ownership)	₱5,000
Foreign-Owned Corporation (more than 40% foreign ownership)	US$200,000 (₱11,000,000 approx.) – unless eligible for exemption under FIA
Retail Trade Enterprise (foreign-owned)	US$2.5 million (₱140 million approx.)
Construction (PCAB License Requirement)	₱1,000,000 to ₱15,000,000 depending on category
Financing or Lending Company	₱10,000,000 minimum
Microfinance NGO	₱1,000,000 minimum
Real Estate Brokerage Corporation	₱1,000,000 minimum
Recruitment Agency (POEA-licensed)	₱5,000,000 minimum
Call Center / BPO (foreign-owned)	US$200,000 – may be reduced to US$100,000 if employing at least 50 Filipinos
Pharmaceutical / Drug Distributor	₱5,000,000 minimum (subject to FDA evaluation)
Educational Institution (Private)	₱1,000,000 to ₱5,000,000 depending on level of operation
Insurance Company	₱1,000,000,000 minimum as per Insurance Commission requirements
Investment House / Underwriter	₱300,000,000 minimum as per SEC rules

Factors Affecting Paid-Up Capital Requirements

Several factors determine the amount of paid-up capital that must be infused during SEC registration:

• Nature of Business – Regulated industries like finance, construction, and education often require higher capitalization.

• Foreign Ownership – Companies with more than 40% foreign equity generally require US$200,000 minimum paid-up capital unless exempted.

• Special Laws and Agencies – Certain sectors are governed by other agencies such as BSP, DOLE, or PCAB, which may impose higher capital requirements.

• Business Scale and Category – Some regulatory agencies categorize licenses by capital levels, such as PCAB contractor classifications.

Importance of Proper Capitalization

Having sufficient paid-up capital not only satisfies legal requirements but also enhances the credibility of the corporation in the eyes of banks, investors, and clients. It reflects financial stability and ensures that the business can meet operational needs and obligations.

Under-capitalized corporations may face challenges in bidding for projects, obtaining loans, or securing government permits. In addition, failure to meet capital requirements may delay or disqualify registration with the SEC or other regulatory bodies.

How DV Consulting Inc. Can Help

DV Consulting Inc. provides expert assistance in SEC registration, capital structuring, and compliance advisory. Our team ensures that clients meet the minimum capital requirements for their specific industry while optimizing the corporate structure for long-term growth.

Whether you are setting up a domestic corporation, a foreign subsidiary, or a specialized business, DV Consulting can guide you through every step from capitalization planning to post-registration compliance.

Understanding SEC paid-up capital requirements is essential for successful business registration and regulatory compliance in the Philippines. Different industries have distinct capitalization rules that must be carefully reviewed before registration. By complying with the SEC’s requirements and planning capital allocation properly, businesses can ensure smoother registration, better financing opportunities, and stronger market credibility.

For professional guidance on SEC registration and compliance, entrepreneurs and corporations can rely on DV Consulting Inc. your trusted partner in business success.

Article created by:

Danhilson Vivo, CPA, REB, REA

President & CEO

DV Consulting