Over the past few decades, the Philippines has seen steady economic growth. Many European companies are investing in key sectors of the country, such as renewable energy, engineering procurement and construction, manufacturing, and so on. However, entrepreneurs who are willing to register a business in the Philippines may encounter many hindrances due to local regulations. However, they can avoid the hurdles by entering the market with a holding company in the Philippines.
What is a Holding Company?
A holding company is an entity that does not produce or manufacture goods itself but owns the shares of other companies that produce the goods and services. By retaining ownership of multiple companies, holding companies reduce owners' risk.
Advantages of Registering a Holding in the Philippines
Here are the benefits of registering a holding company in the Philippines:
Attractive Tax Policies
You can obtain a 100% corporate tax exemption on all earnings received from abroad if you register a holding company in the Philippines. A holding company will not be subject to any taxation by local authorities or customs duties on imported equipment and vehicles. However, it is advisable to consult a business advisor to gain a clearer understanding of your tax liability.
Easy Access to Visas
The employees will have easy access to visas due to the fewer document requirements.
Ease of Formation
Forming a holding company in the Philippines is a straightforward process. Promoters can buy shares in the open market, and the consent of the shareholders of the subsidiary company is not necessary. However, you must secure the approval of the Securities and Exchange Commission (SEC) in the Philippines for the same.
Large Capital
You can pool the financial resources of your holding company and other subsidiary companies together. Your company can undertake large-scale projects to increase its profitability. Moreover, you can avoid unnecessary competition between your holding and subsidiary companies.
Minimum Risk
Holding companies are structured to minimize their risk. They can also disperse assets through its subsidiaries. So, if the company goes bankrupt or insolvent, the holding company shall have a lower risk of losing all its assets.
Control over Management
The parent company takes control of a subsidiary by purchasing 51% or more of its shares. So, financially, the parent company has more control over the subsidiary. All the decisions are taken with the management in the loop.
These are the benefits of registering a holding company in the Philippines. It is crucial to research well before making a decision, and you must know these 7 things before starting a business in the Philippines. Setting up a business in the Philippines can be challenging and tedious, which is why it is recommended that you register a holding company. If you are looking to establish a holding company in the Philippines, contact us today, and our experts will guide you through the process.
