Business Name Registration: DTI vs SEC

When starting a business in the Philippines, one of the first—and most important—decisions you’ll face is choosing how to register your business name. This decision will determine which government agency you need to deal with: the Department of Trade and Industry (DTI) or the Securities and Exchange Commission (SEC).

This guide breaks down the key differences between the two so you can choose the right path for your business.

DTI: For Sole Proprietorships

If you are a solo entrepreneur, freelancer, or small business owner looking to start a business with minimal complexity, registering under the Department of Trade and Industry (DTI) as a sole proprietorship is your most straightforward option.

A sole proprietorship is the simplest form of business structure in the Philippines. It is ideal for individuals who want to run and own their business by themselves, without the need to form a partnership or corporation. This structure allows you to quickly start operations and maintain full control over your decisions and profits.

✅ Key Features and Benefits

• Owned and operated by one individual
  You are the sole decision-maker and investor. There are no partners or shareholders involved.

• Not a separate legal entity
  The business and the owner are legally the same. This means the owner is personally liable for all business obligations, including debts and taxes.

• Lower cost and faster registration
  Compared to corporations, DTI registration is affordable and can often be completed in a single day.

• Minimal paperwork
  No need to submit Articles of Incorporation or Bylaws. A few valid IDs, address verification, and your chosen business name are enough to start.

• Ideal for:

  • Online sellers (e.g., Shopee, Lazada, Facebook Marketplace)

  • Freelancers (e.g., graphic designers, writers, developers)

  • Professionals (e.g., tutors, coaches, consultants)

  • Small physical businesses (e.g., sari-sari stores, cafés, salons)

Tip: A sole proprietorship is not eligible for foreign ownership unless the owner is a former Filipino or holds special residency status (e.g., SRRV or Special Investor’s Resident Visa).

Where and How to Register

DTI registration is done online through the Business Name Registration System (BNRS). The system lets you:

• Check if your desired business name is available

• Select the scope of your business operation

• Pay registration fees online via GCash, credit card, or bank transfer

• Download your Certificate of Business Name Registration

✅ You do not need to visit a DTI office unless there is an issue with your online application.

How Much Does It Cost?

The cost of registering your business name with the DTI depends on your geographic scope—this determines where your business is legally allowed to operate using that name:

Note: All applications require an additional ₱30 documentary stamp fee.

What You’ll Need

To register, prepare:

• At least one valid government-issued ID (e.g., passport, driver’s license)

• Your preferred business name

• Business location details

• A description of your business activity

• Email address and contact number

SEC: For Partnerships and Corporations

If you’re starting a business with co-founders, planning to raise funds, or intend to operate at a larger scale, registering your business with the Securities and Exchange Commission (SEC) is the appropriate—and often necessary—route.

The SEC oversees the registration and regulation of corporations, partnerships, foreign-owned entities, and non-stock organizations in the Philippines. Unlike a sole proprietorship, a corporation is recognized as a separate legal entity, which brings advantages in terms of liability protection and scalability.

Key Features and Advantages

• Applies to Partnerships and Corporations
  The SEC handles registration for:

  • General Partnerships

  • Limited Partnerships

  • Stock Corporations (for-profit)

  • Non-Stock Corporations (non-profit, foundations, NGOs)

• Separate Legal Identity
  Corporations and partnerships are distinct from their owners. This means the business itself can own property, open bank accounts, sue or be sued, and enter contracts independently.

• Limited Liability Protection
  Shareholders and partners are liable only up to the amount of their investment. Their personal assets are generally protected from business debts.

• Ideal for Expansion and Investment
  Corporations can issue shares, raise capital, accept investors, and scale across multiple locations. This is essential for tech startups, large retailers, and international ventures.

• More Regulatory Requirements
  Expect more paperwork, including audited financial statements, board resolutions, and annual filings with the SEC and BIR.

Tip: Many foreign entrepreneurs are required to register with the SEC, especially if their business structure includes foreign equity or if they’re setting up a branch or subsidiary of a foreign company.

Where to Register: SEC eSPARC

As of 2021, all registrations must be done through the SEC eSPARC system
https://secwebapps.sec.gov.ph/application-form

The eSPARC portal streamlines the registration of:

• Domestic corporations

• Partnerships

• Foreign corporations (branch or representative office)

• Non-stock entities

Basic Steps:

1. Name Verification: Secure a unique company name via the SEC’s CRS (Company Registration System).

2. Upload Documents: Submit Articles of Incorporation, By-laws, Treasurer’s Affidavit, and other requirements.

3. Pay Fees: Payment is made via online banking or accredited payment centers.

4. Digital Certificate of Registration: Once approved, you’ll receive your SEC Certificate electronically.

How Much Does It Cost?

SEC fees depend on several variables:

Typical starting cost range:
₱2,000 to ₱5,000+ for small partnerships and up to ₱10,000–₱20,000+ for corporations with significant capital.

You will also need to pay for document notarization, stock transfer books, and possibly legal consultations during the incorporation process.

Documents You’ll Need

For Corporations:

• Name Verification Slip

• Articles of Incorporation

• By-laws

• Treasurer’s Affidavit

• Notarized joint undertaking (if applicable)

• Proof of inward remittance (for foreign stockholders)

For Partnerships:

• Articles of Partnership

• SEC Application Form

• Cover Sheet

• Paid-up capital proof (for limited partnerships)

What About Foreign Ownership?

Foreigners cannot register a sole proprietorship, but they can own shares in a corporation. The Foreign Investments Act sets specific ownership limits based on the industry:

• Up to 100% foreign ownership in most export-oriented or service-based industries

• Limited to 40% in sectors covered by the Negative Investment List (e.g., mass media, retail trade below capital thresholds)

Tip for foreign nationals: Always consult a lawyer or corporate services firm to ensure compliance with capital requirements and visa obligations.

Comparison Table: DTI vs SEC

Can Foreigners Register Under DTI or SEC?

In the Philippines, foreign ownership is strictly regulated, and the choice between DTI and SEC depends heavily on your nationality and business structure.

❌ DTI: Generally Not for Foreigners

• Foreigners cannot register a sole proprietorship unless they:

  • Are former natural-born Filipinos

  • Hold special resident investor visas (SRRV or SIRV)

  • Are married to a Filipino and meet specific requirements

• Even if eligible, foreign-owned sole proprietorships are subject to capital and industry restrictions

For most foreign nationals, DTI is not a viable route unless they have special status or are registering under a Filipino partner’s name.

✅ SEC: Recommended for Foreign Investors

Foreign individuals and entities who wish to legally own part or all of a business must register through the SEC. Key considerations:

• You may form a 100% foreign-owned corporation if the business is export-oriented or not listed in the Foreign Investment Negative List (FINL)

• If your business falls under restricted industries (e.g., retail, media, small-scale trade), foreign equity is limited to 40%

• Foreign corporations may also establish:

  • Branch Offices (must be registered with the SEC)

  • Representative Offices (limited to liaison/marketing functions, no income)

Important: To register a foreign-owned corporation, you will often need a minimum paid-up capital of USD $200,000, unless you qualify for exemptions.

Final Thoughts: Which One Should You Choose?

Choosing between DTI and SEC isn’t just a matter of convenience—it affects your liability, scalability, ownership structure, and long-term strategy.

✔ Choose DTI if:

• ✅ You are a Filipino citizen

• ✅ You’re starting solo with a small business or freelance service

• ✅ You want a quick, low-cost setup

• ✅ You are testing a business idea and want a lightweight entry

This is perfect for:

• Online resellers

• Service providers (photographers, tutors, fitness coaches)

• Micro-enterprises with minimal capital

✔ Choose SEC if:

• ✅ You’re working with co-founders or partners

• ✅ You plan to scale quickly, raise capital, or attract investors

• ✅ You want to limit liability

• ✅ You’re a foreign national or working with foreign investors

This is ideal for:

• Tech startups

• BPO or outsourcing firms

• Import/export companies

• NGOs and foundations

Still Unsure?

You can always start simple—with a DTI-registered sole proprietorship—and then transition to a corporation later as your business grows. Many businesses begin this way to minimize initial costs and complexity, especially in the first year.

⚖️ Pro Tip: Think long-term. If you’re planning to grow your business, bring in partners, or raise funding, it’s usually better to start under the SEC right away and build the proper foundation from day one.

Business Name Registration: DTI vs SEC – Frequently Asked Questions