The Philippines enjoys a highly strategic location in the heart of Asia and boasts an extensive range of natural and mineral resources. Thanks to the availability of a young workforce and developing infrastructure, the country has grasped the attention of foreign entrepreneurs. Thus, starting a business in the Philippines has never been more advantageous.
Some of the top industries that investors have been tapping into include travel and tourism, agriculture, real estate, manufacturing, retail, and so forth. The Philippine government has introduced the Revised Corporation Code to streamlining business activities in the country. The Code has also paved the way for One Person Corporation (OPC) in the Philippines.
If you wish to gain from the business opportunities available in the newly industrialized country, you have come to the right place. Read on to learn more about doing business in the Philippines as a sole entrepreneur.
What is One Person Corporation (OPC) in the Philippines?
An OPC, composed of a single stockholder, can be set up in the Philippines as per the Revised Corporation Code (Republic Act No. 11232). The sole stockholder can be a natural person, trust, or estate. The period of its existence is perpetual, but in the case of trust or estate, it shall be co-existent with the presence of the same. Therefore, anyone hoping to go forward with single-person company incorporation Philippines must include “OPC” in the corporate name.
The following institutions or entities are not allowed to form a Single Person Company in the country:
- Non-Bank Financial Institutions
- Pre-need, Trust, Insurance Companies
- Public and Publicly Listed Companies
- Non-Chartered GOCCs
- A Natural Person who has been authorized to exercise a specific occupation for purposes of exercising his occupation
It is important to note that a foreign natural person may be subjected to specific capital necessities or constitutional and statutory requirements in certain areas of business investments.
What Are the Powers of a Sole Director in a One Person Corporation (OPC)?
When it comes to one person company formation in the Philippines, the single stockholder enjoys being the sole director and President of the corporation. However, the Philippine law mandates that the OPC appoint a Treasurer, Corporate Secretary, and other officers within fifteen days from issuing the certificate of Incorporation.
The sole stockholder cannot hold the position of the Corporate Secretary. However, they can serve as the Treasurer, and they will have to publish a bond based on the authorized capital stock of the OPC if they wish to hold the position of a Treasurer simultaneously. As long as the sole stockholder serves as the Treasurer, the bond will continue to exist. Furthermore, the bond will have to be renewed every two years.
When single-person company incorporation Philippines, the sole stockholder shall assign their nominee or alternate nominee, the latter can take over as director, and the President of the single stockholder is indisposed. If the single stockholder succumbs to death, the nominee shall temporarily serve as the director and President until the legal heirs decide.
What Are the Documents Required for OPC Registration?
Single person company incorporation in the Philippines requires the entrepreneur to present the following documents:
- Articles of Incorporation (Natural Person or Trust/Estate)
- Acceptance Letter of Nominees
- Notice to Change the Name of the Company
What Are the Reportorial Requirements Imposed Upon an Entity at the Helm of an OPC?
It is mandated that the OPC comply with the following requirements:
- The OPC shall submit annual audited statements to the SEC or Securities and Exchange Commission within 120 days from the end of the fiscal year.
- The OPC shall send a report on the comments made by the President based on adverse remarks from auditors in the financial statement.
- A declaration of all the self-dealing and related party transactions between the OPC and the single stockholder, and
- Any other reports mandated by the OPC
The Philippine market has so much to offer to interested business investors. In addition to the plethora of natural and mineral resources, the country also warrants strategic location, substantial workforce resources, fast-improving infrastructure, and unlimited business opportunities. Are you wondering about how to start a business in the Philippines? Do you wish to set up a single person company without any hassle? Get in touch with us today to learn more!