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A Guide to Setting up Regional Headquarters in the Philippines

The Philippines has become a natural choice for many foreign investors hoping to tap into the thriving Asia-Pacific market. In addition to displaying hospitality towards foreigners, the country also offers other business-friendly advantages in a strategic location, advancing infrastructure, an attractive economic market, a top-notch workforce, and so on. All these factors have streamlined the process of doing business in the Philippines. 

Thanks to the business-friendly environment in the Philippines, foreign businesses must wonder how to register a corporation in the Philippines. Read on to know more about RHQs in the Philippines and how they can benefit your business endeavours!

What is Regional Headquarters (RHQ) in the Philippines? 

As the name suggests, an RHQ in the Philippines serves as the regulatory base for foreign companies hoping to make a breakthrough into the Asia-Pacific region. The company should be such that it boasts branches, subsidiaries, and clients across the globe. The RHQ is not a separate legal entity from the parent corporation and cannot earn any income from any type and sources to and from the Philippines.

A parent corporation goes forward with setting up a company in the Philippines in the form of RHQ to supervise the functioning of its subsidiaries, affiliates, and branches across the globe. In addition to serving as a communication centre, the RHQ also serves general administration and business planning.

The parent company needs to set up $50,000 as paid-up capital to operate in the Philippines successfully. However, the government has paved the way for RHQs to source raw materials, train the workforce, conduct research and development projects, and promote products subject to certain restrictions.

RHQ company registration Philippines has gained traction as many foreign entrepreneurs are looking to reduce operational costs, thanks to the economic workforce, tax incentives, and improving infrastructure that the country has to offer.

What Are the Requirements to Set Up an RHQ in the Philippines? 

Any foreign company hoping to register a corporation in the Philippines in the form of an RHQ must take care of the following:

●Appointment of a resident agent

The foreign company must appoint a resident agent at the receiving end of a summons and any legal proceedings served to or against the RHQ in the Philippines. The resident agent can be a person residing in the country or any domestic company doing business in the Philippines. 

●Proof of Official Business Address 

You will need to display proof of your registered office address in the Philippines. This must be taken care of before you kickstart the company registration Philippines process. But, first, you will have to serve a Contract of Lease concerning your office address to the BIR or the Bureau of Internal Revenue and other Local Government Units (LGUs).

If you fail to get your hands on the contract of Lease, you can rent a virtual office for your business undertakings. Once you are done with the registration process, you can shift to a brick and mortar office space.

Documentary Requirements for an RHQ in the Philippines 

A foreign corporation must present the following documents to set up an RHQ in the Philippines successfully:

  • Application Form
  • Name Verification Slip
  • The corporation must present a certificate from the Philippine embassy, the Philippine Commercial Office, or the equivalent office of the Philippine Department of Trade and Industry (DTI) in the parent company’s country of origin. This certificate must attest that the foreign corporation is engaged in foreign trade with different subsidiaries, branches, or affiliates across the globe. If the equivalent office of the DTI issues the certificate, it shall be authenticated by the Philippine consulate or embassy.
  • The corporation must present a certificate proving that the parent company has set up an RHQ in the Philippines. This certificate shall be given by the Principal Officer of the Parent Company.
  • A verification of Inward Remittance of US $50,000 as the paid-up capital and the annual support for operating expenses.
  • Clearance of an endorsement from relevant government agencies (if applicable)
  • An endorsement from the Board of Investments or BOI
  • Up-to-date authenticated financial statements

What Are Some Restrictions Imposed on RHQs in the Philippines? 

An RHQ in the Philippines cannot administer the business functions of the parent company’s subsidiaries, branches, and affiliates across the globe. Therefore, foreign companies hoping to go ahead with RHQ company registration Philippines must be mindful that the latter cannot offer its services to any third party inside or outside the country. In addition, the RHQ cannot enter into any business transactions with the clients of the parent company in the country.

The RHQ in the Philippines is exempted from paying any income or VAT due to it being a non-income generating country. However, the RHQ can acquire tax exemptions such as exemption from all local taxes, fees, or charges mandated by the LGU, importation of new motor vehicles (subject to payment of taxes and duties), and so forth. If you wish to open an RHQ in the Philippines to keep an eye on business dealings, the time is now. Get in touch with us to effectively set up a regional headquarters in the country!