Foreign funding records and future outward payments
BSP investment registration can affect a nonresident investor’s later purchase of foreign exchange for capital repatriation or related earnings. Assess the intended payment route before funding the investment and preserve the evidence of what was invested. The corporate authority, tax treatment, and documents supporting the outward payment also need review.
For an investor, documentation prepared when an investment is funded can support later remittances of earnings and capital. Record who invested, how the funds arrived, and the basis of each payment.
Company registration with the Securities and Exchange Commission (SEC), registration for investment incentives, and foreign exchange registration with the Bangko Sentral ng Pilipinas (BSP) serve different purposes. Plan each process separately.
Distinguishing equity funding from a foreign loan
Equity provides an ownership interest, while a loan creates a repayment obligation. The choice affects corporate approvals, accounting, taxes, and foreign exchange requirements.
Support a shareholder loan with approved loan terms and a share subscription with the relevant capital records. Keep service payments, advances, loans, and equity contributions correctly classified.
Foreign loans follow separate BSP rules. Approval, registration, notices, and reporting depend on the borrower, public guarantees, loan terms, and source of foreign exchange (FX) for servicing. Review the requirements before signing or drawdown.[1]
Agree on the funding instrument before the transfer instructions are issued. Record the parties, amount, currency, proposed use, and terms in the appropriate documents. The description used by the investor, company, and receiving bank should refer to the same transaction rather than shifting between a subscription, advance, or loan.
Identify the corporate approvals and signing authority needed for the proposed funding. Prepare the subscription or loan documents against that authority, then check the corresponding accounting treatment. A bank transfer description should be supported by the actual agreement and records, rather than being used to determine the arrangement after the money arrives.
For a loan, review the separate foreign borrowing requirements and the intended source of FX for repayment. BSP investment registration for an equity contribution should not be assumed to cover a shareholder loan. The fact that the lender also owns shares does not remove the need to assess the borrowing separately.
If the parties later convert debt into equity or change another material term, reassess the documents and applicable registration requirements. Keep evidence of the conversion or amendment with the original funding records. The company should be able to explain how the obligation or ownership interest changed and when the change took effect.
Understanding when BSP investment registration matters
BSP foreign exchange rules cover inward investments by non-residents. Registration is generally optional, but becomes necessary when capital repatriation or remittance of related peso earnings will be funded with FX purchased from authorized agent banks (AABs) or their subsidiary or affiliate foreign exchange corporations.[2]
An investment is not unlawful merely because it lacks BSP foreign exchange registration; other legal requirements still apply. A compliant investment must also have the supporting documents needed for a later bank transaction.
Shares in an unlisted Philippine company ordinarily follow Section 36 registration with the BSP, evidenced by a Bangko Sentral Registration Document (BSRD).
PSE-listed shares ordinarily follow Section 37 registration through a registering AAB’s reporting to the BSP. For Section 37 investments, registration evidence is report-based, rather than a newly issued BSRD.[3]
Start with the investor’s residence, investment instrument, and intended source of foreign exchange for the eventual payment. Determine whether the transaction falls under the BSP route or a registering bank’s process. This assessment should be made for the actual investment, rather than inferred from the company’s SEC registration alone.
Keep the scope of each approval clear. Company incorporation establishes a corporate registration, while incentive registration concerns the approved activity and benefits. BSP investment registration addresses a different foreign exchange purpose. Retain the relevant documents separately and identify which requirement each document is intended to satisfy.
Ask the bank expected to handle future FX purchases which registration evidence applies to the instrument. A Section 36 investment and a Section 37 investment use different evidence. Confirm the expected route before asking the company or its advisers to obtain a document that the relevant process does not issue.
Use the BSP Foreign Exchange Manual alongside its current appendices and subsequent issuances. A BSP investment registration assessment should identify the applicable instrument, filing route, and supporting records, while keeping separate the legal requirements for the investment and the later payment.
Preserving evidence from the first transfer
Before transferring funds, coordinate with the receiving bank and identify the investor, investee, instrument, and purpose. Preserve proof of funding, such as a Certificate of Inward Remittance or an acceptable equivalent, together with proof that the investment was actually made. A remittance confirmation alone may not establish both.[4]
For noncash contributions, identify the documents proving the transfer and value of the assets. Notify the BSP of changes in BSP-registered investments and assess whether the BSRD needs replacement or a new investment registration is required.[5]
Keep corporate approvals, subscription or loan agreements, share records, and accounting entries consistent with the banking records. If another person remits the funds, document the relationship and authority so that the investor and transaction can be identified.
Prepare a funding record that connects the investor, receiving entity, amount, transfer date, and investment instrument. Reconcile it with the subscription or loan documents and accounting entries. Resolve different names, unexplained amounts, or inconsistent payment descriptions while the people and records involved in the transfer remain readily available.
Keep proof of funding and proof of the investment made as distinct parts of the file. A remittance record shows how money moved; the relevant corporate and investment documents establish what the money funded. BSP investment registration depends on the evidence appropriate to the transaction, rather than one payment confirmation alone.
Where another person sends the funds, identify that person’s relationship to the investor and the authority for the transfer. Keep the explanation with the banking and investment records. The documents should allow the company and bank to trace the funding without treating a different remitter’s name as an unexplained ownership change.
Review Appendix 10.C on supporting investment documents when preparing evidence for BSP investment registration. For a noncash contribution, identify the relevant transfer, valuation, and investment records before assuming that the documents used for a cash subscription will be sufficient.
Calculating the filing period and using FLIMS
Applications for registration of new or additional investments under Section 36.1 must be filed within one year from the applicable reckoning date under Appendix 10.A of the FX Manual. Applications filed with the BSP are free of charge under the current rules.[6]
The starting date depends on how the investment was funded and documented. Where the instrument requires regulatory, board, or other government clearance obtained later than the listed reckoning dates, Appendix 10.A uses the date of that clearance.
Check the applicable date when the investment is made, rather than waiting until profits are ready for remittance.[7]
Since 15 December 2025, new Section 36.1 applications and related requests must be submitted through the Investment Module of the BSP’s Foreign Loans and Investments Management System (FLIMS). These new filings are no longer accepted by email or in hardcopy. Investments registered through AABs follow the applicable bank process.[8]
Create a dated assessment for each new or additional investment, identifying the funding method and applicable reckoning date. Keep the evidence supporting that date with the proposed filing. BSP investment registration should be calendared from the relevant transaction and rules, rather than from a convenient date selected when the documents are assembled.
Assign responsibility for preparing the application, obtaining supporting records, and monitoring its status. Set internal dates that allow time to resolve deficiencies before the applicable deadline. A draft saved in the portal should be distinguished from an application that has been submitted and acknowledged.
Follow Circular Letter No. CL-2025-048 and the FLIMS guidance for new Section 36.1 applications. Check whether instructions being circulated concern the current filing channel or an earlier process. Keep the submission record and any correspondence with the application so its status can be verified later.
Retain the final application, supporting documents, notices, responses, and resulting registration evidence together. If someone else handles the filing, agree how those records will be delivered to the investor or company. The people responsible for a future remittance should be able to locate the completed record without reconstructing the application.
Establishing the legal basis for the outward payment
A dividend, loan repayment, branch profit remittance, and payment of share-sale proceeds have different legal bases and tax consequences. For registered investments, banks may sell FX for capital repatriation and related earnings without prior BSP approval, subject to the prescribed documentary requirements.[9]
For a cash dividend, the board of directors must validly declare the distribution out of unrestricted retained earnings. The company should retain the declaration and evidence supporting the amount available for distribution.[10]
For earnings from a Section 36 investment, the bank’s minimum requirements include the BSRD, an Application to Purchase FX, evidence of the amount to be remitted, and the prescribed Annex N computation.
A secretary’s certificate covering the board’s dividend declaration is one example of supporting evidence for a dividend remittance.[11]
Before an exit or substantial distribution, reconcile the investment and bank records, review applicable taxes and any treaty conditions, and confirm the bank’s documentary requirements. Allow time to resolve discrepancies before agreeing to a payment date.
Identify the payment before preparing the bank instructions. Record whether it is a dividend, loan repayment, branch profit remittance, or proceeds from a sale or other capital transaction. BSP investment registration supports the relevant FX route, but the company still needs the documents and authority appropriate to the payment itself.
For a proposed dividend, review the financial records and the amount available for lawful distribution before the board acts. Cash in the company’s account does not by itself establish unrestricted retained earnings. Prepare the declaration and supporting certificate from the actual corporate decision and the figures on which it was based.
Reconcile the proposed payment with the investor’s identity, investment records, and relevant approvals. Review the tax treatment and any treaty claim against the particular recipient and transaction. Confirm the bank’s requirements early enough to address discrepancies before a commercial agreement fixes the expected payment date.
The following record links common transaction stages with the questions and evidence to review. Adapt it to the instrument and applicable rules. It helps organize the work but does not replace the specific documentary requirements for the investment, borrowing, corporate action, or FX purchase.
| Transaction stage | Question to resolve | Evidence to review |
| Equity funding | Who is investing and what interest is acquired? | Subscription or transfer documents, corporate records, and funding evidence |
| Loan funding | What are the repayment terms and applicable borrowing requirements? | Loan agreement, approvals, funding record, and relevant FX documentation |
| Earnings payment | What authorizes the amount and the intended FX route? | Declaration or other supporting authority, computation, and applicable registration evidence |
| Capital exit | What transaction supports the proceeds being remitted? | Sale or other capital transaction documents, approvals, and payment records |
Updating the records before a transfer or exit
Review proposed changes in ownership, investor or investee names, and investment terms against the existing records. Determine the notification, replacement, or new registration action required under the applicable rules. BSP investment registration records should remain consistent with the investment being presented for a later FX purchase.
Before a share sale or substantial distribution, identify the documents the seller, company, bank, and advisers need from each other. Reconcile historical funding and registration records before completion. If an old document cannot be located or contains an unexplained difference, assess the corrective process before promising when the proceeds can be remitted.
Include funding and registration records in a handover when officers, accountants, or advisers change. Identify who will monitor outstanding requests and retain access to the company’s copies. The documents should remain available to the investor and responsible company personnel throughout the investment, including after the original transaction team has moved on.
Preparing for a future dividend remittance
Consider an investor who funds an unlisted Philippine company and expects dividends after operations become profitable. A related company sends the funds, while the bank transfer description refers only to an advance. The corporate records separately describe a share subscription. Those differences should be reconciled when the funding occurs.
Confirm the intended investor, authority for the related company’s payment, and investment actually made. Review the intended source of FX for future remittances and assess the applicable filing route and date. BSP investment registration planning should connect that evidence with the transaction the parties have agreed to implement.
When a dividend is later proposed, review unrestricted retained earnings and the corporate declaration, then prepare the bank’s documents for the amount being remitted. Check that the recipient and registration evidence match the investment. Resolve any remaining tax or documentation issue before committing to the date of the outward payment.
Common questions about BSP investment registration
When registration becomes necessary
Registration is generally optional, but is required when capital repatriation or related earnings will be funded with FX purchased from AABs or their subsidiary or affiliate FX corporations. Other legal requirements for the investment remain separate.
The difference between a BSRD and SEC registration
A BSRD evidences registration of an investment under the relevant BSP process. It serves a different purpose from company incorporation with the SEC or registration for investment incentives. Check which document the transaction actually requires.
Evidence for listed and unlisted shares
Unlisted Philippine company shares ordinarily use Section 36 registration and a BSRD. PSE-listed shares ordinarily follow Section 37 through a registering AAB, with evidence based on reporting. Confirm the instrument and applicable route before preparing the request.
Using a remittance confirmation as investment evidence
Proof that funds arrived may not establish that the investment was actually made. Retain the appropriate funding evidence together with the corporate, subscription, transfer, or other documents showing the investment recorded for the nonresident investor.
The one year filing period
New or additional Section 36.1 investments generally require filing within one year of the applicable reckoning date under Appendix 10.A. The date depends on the funding and relevant documents, including the specified rule for later required clearance.
The channel for a new Section 36 application
New Section 36.1 applications and related requests use the FLIMS Investment Module from 15 December 2025. They are no longer accepted by email or in hardcopy. Investments registered through AABs follow the applicable bank process.
Treating a shareholder loan as equity funding
A shareholder loan creates a repayment obligation and follows the applicable borrowing rules. Review approval, registration, reporting, and FX servicing requirements separately. The lender’s shareholding does not by itself make the loan an equity contribution.
Documents for an outward dividend payment
Confirm a valid dividend declaration and unrestricted retained earnings, then prepare the bank’s required documents. For Section 36 earnings, these include the BSRD, FX purchase application, evidence of the amount, and prescribed Annex N computation.
Changes before an investment exit
Reconcile the investment, ownership, registration, and banking records before fixing a payment date. Assess any required notification, replacement BSRD, or new registration and review the relevant tax treatment. Keep evidence supporting the transaction and amount being remitted.
Legal support for investment funding and remittances
ATL Law Firm assists investors with funding documentation, corporate approvals, and the legal requirements relevant to capital movements and profit remittances.
[1] Bangko Sentral ng Pilipinas, Manual of Regulations on Foreign Exchange Transactions [hereinafter FX Manual], §§ 23–25, 101 (updated May 2025).
[2] FX Manual, § 32(1)–(2); Bangko Sentral ng Pilipinas, Frequently Asked Questions on Inward Foreign and Outward Investments [hereinafter Investment FAQs], Q. 1 (Mar. 2026).
[3] FX Manual, §§ 36–37; Investment FAQs, Qs. 4, 36.
[4] FX Manual, Appendix 10.C, pts. I–II (as amended Apr. 11, 2024); Investment FAQs, Qs. 6, 11, 17.
[5] FX Manual, Appendix 10.C, pts. I–II; Appendix 10.A, pt. I(B) (as amended Apr. 11, 2025).
[6] FX Manual, § 36(3); Appendix 10.A, pt. I(A)(2)–(3).
[7] FX Manual, Appendix 10.A, pt. I(A)(2).
[8] BSP, Circular Letter No. CL-2025-048, 1–3 (Dec. 1, 2025); FX Manual, § 37.
[9] FX Manual, § 38(1)–(2); Appendix 10.A, pt. II; Appendix 1.4, pt. I(A)–(B) (as amended Apr. 11, 2024).
[10] Revised Corporation Code, Republic Act No. 11232 § 42 (Feb. 20, 2019) (Phil.).
[11] FX Manual, Appendix 1.4, pt. I(B), n. 1(a).
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