Setting Up & Structuring · Foreign Ownership & Property
Can a Foreigner Run an E-Commerce Business in the Philippines? FAQ
The Philippines' e-commerce market is booming — and foreigners want in. But the rules around online retail, digital services, and platform businesses aren't always obvious. Here are the five questions we hear most often from foreign entrepreneurs looking to sell online in the Philippines.
1. Can a Foreigner Own 100% of an E-Commerce Business?
It depends on what you're selling.
If your e-commerce business provides digital services — SaaS platforms, online marketplaces, IT consulting, or digital products — you can generally own 100% of the company. The exception is content that amounts to mass media, such as an online news outlet: mass media is reserved to Filipinos, and the Negative List's "internet business" exception covers carriers that transmit content, not businesses that create it. These activities are not on the Foreign Investment Negative List (FINL) under the Foreign Investments Act (RA 7042, as amended by RA 11647).
However, if you're selling physical goods directly to consumers in the Philippines, that's considered retail trade. Under the Retail Trade Liberalization Act (RA 8762, as amended by RA 11595), foreign-owned retail enterprises must maintain a minimum paid-up capital of ₱25 million (roughly US$440,000). A foreign retailer operating through more than one physical store must also invest at least ₱10 million per store — though this per-store requirement does not apply to foreign retailers already legitimately engaged in retail trade that were not required to meet it when RA 11595 took effect.
The distinction matters: a foreign-owned e-commerce company selling physical products to Philippine consumers is engaging in retail trade and must meet the capital threshold.
2. What Registrations Does a Foreign E-Commerce Business Need?
At minimum, a foreign-owned e-commerce entity operating in the Philippines needs:
- SEC registration — Incorporate a domestic corporation or register a branch/representative office with the Securities and Exchange Commission
- BIR registration — Obtain a Tax Identification Number (TIN) and register with the Bureau of Internal Revenue for tax compliance
- Local government permits — Barangay clearance, Mayor's Permit, and business license from the city or municipality where you operate
- DTI Trustmark — Under the Internet Transactions Act (RA 11967) and DTI Department Administrative Order No. 25-12, online merchants are to register for the Philippine E-Commerce Trustmark with the DTI E-Commerce Bureau (registration is voluntary until the end of 2026; see below)
If you're selling regulated products (food, cosmetics, electronics, medical devices), you'll also need clearances from the FDA, BPS, or other sector-specific agencies.
3. What Is the DTI Trustmark, and Does It Apply to Foreigners?
The DTI E-Commerce Trustmark is a registration system developed under RA 11967 (Internet Transactions Act of 2023), whose Section 11 directs the DTI to encourage the development of a Trustmark. The Act's 18-month transition period for online businesses ended on June 20, 2025. DAO 25-12 requires online merchants, e-retailers, e-marketplaces, and digital platforms to register for the Trustmark before conducting e-commerce in the Philippines.
As of early 2026, the DTI has kept the Trustmark registration voluntary through the end of 2026 while it reviews implementation. The DTI has recorded approximately 4,000 registrations so far. However, the direction is clear: mandatory enforcement is coming, and early registration signals legitimacy to Filipino consumers.
Yes, this applies to foreign-owned businesses selling to Philippine consumers. If you're operating or targeting the Philippine market online, plan to register.
4. Do I Need to Be Physically Present in the Philippines?
Not necessarily — but you need a registered local presence.
A foreign corporation can register a branch office or representative office with the SEC, or incorporate a domestic subsidiary. Each structure requires a registered office address in the Philippines, and a branch or representative office must also appoint a resident agent.
For the business itself, you don't need to live here full-time. But if you or any foreign employees will work in the Philippines, you'll need a DOLE Alien Employment Permit (AEP) and the appropriate work visa (typically a 9(g) pre-arranged employment visa or a 47(a)(2) special non-immigrant visa).
If you're running the business entirely from abroad with no local employees and no physical stock in the Philippines, consult a lawyer on whether your activities trigger "doing business" status under the Foreign Investments Act. Actively and habitually selling to Filipino consumers generally does.
5. What Taxes Will I Pay?
A foreign-owned domestic corporation engaged in e-commerce is subject to the same tax regime as any Philippine corporation:
- Corporate income tax: 25% on net taxable income (or 20% for domestic corporations with net taxable income not exceeding ₱5 million and total assets not exceeding ₱100 million, under the CREATE Act, RA 11534)
- VAT: 12% on sales of goods and services, with a VAT registration threshold of ₱3 million in annual gross sales
- Withholding taxes: On employee compensation, professional fees, and payments to non-residents
- Local business tax: Set by each city or municipality under the Local Government Code; for retailers, Section 143(d) caps it at 2% of gross sales up to PHP 400,000 and 1% above that, and cities may charge up to 50% more
If you're operating from a PEZA-registered zone, you may qualify for a 5% gross income tax in lieu of all national and local taxes — a major incentive for qualifying IT and e-commerce enterprises.
The Bottom Line
Foreigners can absolutely run e-commerce businesses in the Philippines — but the legal requirements depend heavily on what you're selling, how you're structured, and whether you're physically present. The biggest pitfalls are underestimating the capital requirements for retail trade and overlooking registration obligations like the DTI Trustmark.
Get the structure right from day one, and the Philippines' fast-growing digital economy is wide open.
Need help setting up a foreign-owned e-commerce business in the Philippines? Contact TTFC Law for a consultation.
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