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A Guide to Regional Operating Headquarters (ROHQ) in the Philippines

Foreign investors must look out for doing business in the Philippines, thanks to the abundance of resources, steady economic growth, developing infrastructure, tax reforms, and so much more. Additionally, the country offers a talented and economical workforce that can give your business a much-needed boost.

Experts believe that the Philippines is a fast-growing emerging market, which has led to many foreign enterprises setting up Regional Operating Headquarters (ROHQ) in the country. An ROHQ, unlike Regional Headquarters or RHQ, is not limited to supervisory or coordinating business functions only. The former can derive income in the Philippines via the performance of essential business-related tasks, while an RHQ doesn't.

If you plan on setting up a business in the Philippines and deriving desirable income, an ROHQ may be the perfect solution. Read on to learn more!

What Is a Regional Operating Headquarters (ROHQ) in the Philippines? 

The Filipino government has streamlined the process of starting a business in the Philippines for foreigners by introducing tax incentives, improved infrastructure, etc. Foreign companies can now earn a lucrative income by setting up a Regional Operating Headquarters in the country.

Foreign investors must note that the only corporations allowed to conduct business through an ROHQ are those with branches, subsidiaries, clients, or other affiliates in the region. In addition, the ROHQ will have to follow the country's laws in which it originally came into being. Finally, the parent company will have to submit an inward remittance worth $200,000 towards annual support for operating expenses and capitalization.

How Can an ROHQ Acquire Income in the Philippines? 

A Regional Operating Headquarters in the Philippines can derive much-needed income from the following types of services:

  • General Administration
  • Business Planning
  • Sourcing and procurement of components and other raw materials
  • Marketing and sales promotion
  • Training services
  • Logistics
  • Personnel management
  • Financial advisory services to aid corporate enterprises
  • Research services and product development
  • Technical support

It is important to note that an ROHQ cannot offer any of the aforementioned services to anyone outside of its affiliates and subsidiaries. It is also not allowed to implore and market products and services in place of the parent company and other affiliated entities.

What Are the Registration Requirements for an ROHQ? 

Foreign entrepreneurs must get their hands on a license from the Securities and Exchange Commission (SEC) before an ROHQ company registration PhilippinesHere is a list of the documentary requirements:

  • Application Form
  • Name Verification Slip
  • A Certificate of Proof from the Philippine Consulate/Embassy authenticating the company's engagement in foreign business and trade with branches and subsidiaries across the Asia-Pacific region; The company can also acquire the certificate from the Philippine Commercial Office and the Philippine Department of Trade and Industry or DTI in its home country.
  • A certificate of proof from Principal Officer of the foreign enterprise authenticating that the ROHQ in the Philippines has been permitted by the Board of Directors or the Governing Body
  • A proof of the payment of inward remittance worth $2000
  • Registration Data Sheet
  • A form of clearance or endorsement from any relevant government agencies (if applicable)
  • A form or clearance or endorsement from the Board of Investments
  • Up-to-Date Financial Statements confirming the head office's solvency

What Incentives Have Been Made Available to ROHQs in the Philippines? 

Following successful business incorporation PhilippinesROHQs will be subjected to the following lucrative fiscal and non-fiscal incentives.

●Fiscal Incentives 

The government of the Philippines has paved the way for desirable budgetary incentives such as:

  1. Exemption from local tax, fees, and charges (It does not cover real property tax on equipment and land improvement)
  2. Tax and Duty-free importation of different materials for conferences and training
  3. Importation of brand-new motor vehicles (It is subject to the payment of applicable taxes and duties)

●Non-Fiscal Incentives 

The Non-Fiscal Incentives introduced by the Filipino government to ensure effective ROHQ set up in the country include:

  1. Multiple Entry VISA for expatriates, their spouses, and unmarried children (below 21 years of age)
  2. Exemption from payment via reefs for expatriates (except administrative costs)
  3. Exemption from acquiring the Alien Certificate of Registration for Expatriates
  4. Once the necessary documents have been submitted to the Bureau of Immigration, a non-immigration VISA will be processed in three days.
  5. Preferential tax rate of 15% applicable on salaries or any other form of compensation made available to expatriates
  6. Exemption from Travel Tax
  7. Tax and Duty-free importation of household goods and personal items

Setting up a business in the Philippines has become a popular idea among foreign investors due to its cost-effectiveness and enviable tax incentives. If you wish to learn more about how you can operate out of an ROHQ in the country, contact us today!