Business Incorporation in The Philippines

Contact Our Consultant

Why Invest in the Philippines

Situated in the heart of Southeast Asia with short flights to and from many of the major capitals in the region, the Philippines offers a strategic business location to every foreign entrepreneur. Moreover, the country also serves as a manufacturing hub providing easy access to Asia’s powerhouse economies like China, Korea, and Japan.

At present, the Philippines has the 43rd largest economy in the world and is predicted to be the 14th largest economy in the world by 2050.

Foreign direct investments are highly encouraged in the country. The government of the Philippines offers numerous benefits, including tax and non-tax incentives, particularly to foreign investors engaging in business activities that play an important role in the socio-economic and national industrialisation development of the country.

Foreign companies that seek to export most of their products or services as well as those looking to set up back-office, call centers or cost centers in the Philippines can also benefit from said incentives.

Business Incorporation Options in the Philippines

In accordance with Philippine laws, foreign entrepreneurs can choose from any of the following business entity options to be able to do business in the Philippines:

Business Incorporation in The Philippines - Branch Office

Setting up a local company

The most common type of local business entity is a Domestic Corporation (DC). The requirements to establish a DC are quite simple. It requires a minimum of 5 incorporators. Each incorporator is required to be an actual person and must at least have a single share in the company. Moreover, a majority of the incorporators must hold the status of Philippine residents (not necessarily be Philippine citizens, but must reside in the country for a prescribed period and hold a valid visa).Unlike a foreign incorporation, a DC is more flexible in terms of foreign ownership. Its execution is also rather simple and less complicated. With that being said, many foreign investors consider it an excellent choice.

There are 3 types of DCs in the Philippines:

  • Domestic Corporation with 100% local equity
  • Domestic Corporation with foreign equity between 0.01% and 40%
  • Foreign-Owned Corporation with foreign equity between 40.01% and 100%

 

All DCs are to be registered with the Securities and Exchange Commission (SEC). Only upon successful registration with the SEC will a corporation be able to start its business operations in the Philippines.

 

Incorporate a Domestic Company in the Philippines


Business Incorporation in The Philippines - Domestic Company

Setting up a foreign company

To set up a foreign company, foreign entrepreneurs can choose from any of the four legal entity options available, namely: 1) Branch Office; 2) Representative Office; 3) Regional or Area Headquarters (RHQ); and 4) Regional Operating Headquarters (ROHQ). Their individual details can be found below.

Branch Office
To operate a Branch Office in the Philippines, your paid-up capital can be as little as P5,000. But, it is important to note that many banks in the country require companies to have at least P25,000-50,000 to be able to open a corporate bank account.

In general, establishing a Branch Office requires remittance amounting to USD200,000 as capital investment. Foreign entrepreneurs are also required to appoint a Resident Agent in the Philippines who will be responsible for receiving summons and taking care of related legal procedures on behalf of the company.

The basic requirements to register a Branch Office in the Philippines include the following:

  • Application for Branch Office Establishment through Form F-103
  • Name verification slip
  • Authorisation of the Board Resolution (authenticated copy)
  • Financial statements
  • Articles of Incorporation (authenticated copies)
  • Proof of Inward Remittance
  • Registration data sheet
  • Acceptance of appointment of a selected Resident Agent

 

Incorporate a Branch Office in the Philippines


Business Incorporation in The Philippines - Representative office

Representative Office

Commonly considered as a liaison office of its parent company overseas, a Representative Office can be your first step to enter the Philippine market. The purpose of this legal entity is to market the services or products of its parent company or conduct market research in the Philippines to assess future success in case the parent company decides to expand in the country.

Representative offices are not allowed to generate revenue or conduct direct selling in the Philippines.

To successfully set up a representative office, it is mandatory to provide proof of initial inward remittance amounting to USD30,000. After which the parent company must remit the same amount every year to cover operating expenses.

The basic requirements to register a Representative Office in the Philippines include the following:

  • Form F-104
  • Name verification slip
  • Registration data sleep
  • Authorisation of the Board Resolution (authenticated copy)
  • Financial statements
  • Affidavit of solvency
  • Articles of Incorporation (authenticated copies)
  • Acceptance of appointment of a selected Resident Agent
  • Proof of inward remittance of USD30,000 from any local bank

 

Incorporate a Representative Office in the Philippine


Area headquarters

Regional or Area Headquarters (RHQ)

Similar to a representative office, a Regional Headquarters (RHQ) is not allowed to engage in commercial activities that generate any profits or income in the Philippines. The purpose, however, is different. An RHQ is established to supervise, coordinate, and act as a liaison to the subsidiaries, affiliates and branch offices of its parent company from anywhere in the world.

To successfully set up an RHQ, it is mandatory to provide proof of initial inward remittance amounting to USD50,000.

The basic requirements to register an RHQ in the Philippines include the following:

  • Application form
  • Name verification slip
  • Certificates proving the parent company is engaged in international trade with existing subsidiaries, affiliates or branch offices (authenticated copies)
  • Authorisation of the Board of Directors (authenticated copy)
  • Endorsement of the Board of Investment
  • Proof of inward remittance of USD50,000 from any local bank

 

Incorporate a Regional or Area Headquarters in the Philippines


Regional Operating Office

Regional Operating Headquarters (ROHQ)

Unlike RHQs, a Regional Operating Headquarters (ROHQ) can be fully operational. In other words, an ROHQ is allowed to service its parent company’s subsidiaries, affiliates and branch offices from anywhere in the world. .

To successfully set up an ROHQ, it is mandatory to provide proof of initial inward remittance amounting to USD200,000.

The basic requirements to register an ROHQ in the Philippines include the following:

  • Application form
  • Name verification slip
  • Certificates proving the parent company is engaged in international trade with a minimum of 3 subsidiaries, affiliates or branch offices (authenticated copies)
  • Authorisation of the Board Resolution (authenticated copy)
  • Endorsement of the Board of Investment
  • Proof of inward remittance of USD200,000 from any local bank

 

Incorporate a Regional Operating Headquarters in the Philippines

 

Want to set up a company in the Philippines? Start by filling out the form below.

Contact our consultants