Incorporation in Philipines

Types of Business Entity

 

There are Six Options available - Corporation, Partnership, Sole Proprietorship, Branch Office, Representative office, and Regional Headquarters.  The following two are the most common for foreign investments in the Philippines: 

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(1)  Corporation

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Corporations are juridical persons established under the Corporation Code and regulated by the Securities and Exchange Commission with a personality separate and distinct from that of its stockholders. The liability of the shareholders of a corporation is limited to the amount of their share capital. It consists of at least five (5) to fifteen (15) incorporators each of whom must hold at least one share and must be registered with the Securities and Exchange Commission (SEC). Minimum paid up capital: five thousand pesos ( 5,000.00).

 

For a domestic corporation, this is required certain Filipinos individuals as incorporators (where we would assist).  If 60% Filipino-40% foreign-owned, is considered a Filipino corporation.  To register, apostilled copies of IDs and/or parent company's documents are required.  

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(2) Branch Office

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A Branch office is a foreign corporation organized and existing under foreign laws that carries out business activities of the head office and derives income from the host country. It is required to put up a minimum paid in capital of US$200,000.00, which can be reduced to US$100,000.00 if (a) activity involves advanced technology, or (b) company employs at least 50 direct employees. Registration with the SEC is mandatory.

 

For a branch set-up, apostilled copies of HK Incorporation documents, latest audited Financials Statements and Bank statements, would be required for submission with SEC in Philippines.  Then, the assigned local Agent/Representative can arrange registration. then you will need to assign a Agent or local representative for the Branch (where a deposit at least US$50,000 is needed).

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Office Address

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Your corporate address will give out a huge impact on the basis of your taxation. In our area we have a locators hub where tax incentives are given out. You may refer to www.bir.gov.ph .  If any assistance is needed, please kindly let us know.

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Tax Rate

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Corporate income tax: 25%

VAT Tax: 12%

Withholding tax: 0 - 25%

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Company Name

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Business Name Registrations are under Department of Trade and Industry (DTI) for Sole Proprietorships and registrations for partnerships and corporations are with the Securities and Exchange Commission (SEC)

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