Expanding your business successfully is crucial to the overall health of your company. Firms often open branch offices for various reasons, including serving a key client, entering a new market, or extending the company’s reach. In the Philippines, while the corporation is the preferred business entity for foreign investors, several other structures are available, with branch offices and representative offices being the most common.
A branch office in the Philippines serves as an extension of a foreign company, operating under the rules and regulations of the Philippines. To legally conduct business, a Branch Office of a foreign corporation must obtain a license from the Securities and Exchange Commission (SEC). Additionally, the branch must appoint a resident agent in the Philippines, who will be responsible for receiving summons and legal documents. Opening a branch office in the Philippines allows your business to expand while complying with local legal requirements and regulations.
Features of Setting Up a Philippines Branch Office
- A branch office in the Philippines in 100% foreign-owned
- The minimum capital requirement to open a Philippines branch office is US$ 200,000
- One person can set up a branch office in the Philippines and act as the resident agent
- A Philippines branch office must pay 30% income tax and 12% value-added tax
- A branch office in the Philippines will also be subject to a withholding tax related to the compensation paid to the Filipino employee
How do you register a branch office in the Philippines?
The requirement to register a branch office in the Philippines depends on the business activities of the parent company. A branch office is allowed to commence its business operations only after obtaining a license from the Securities and Exchange Commission (SEC). A branch office in the Philippines has to complete specific requirements, which are:
- Fill out the complete application form (SEC Form No. 103). A person officially authorized by the applicant’s Board of Directors must sign this form. If signed outside the Philippines, the nearest Philippine Embassy or Consulate must authenticate it.
- Pay the SEC filing and legal research fees. Then, an assigned capital of US$ 200,000, along with the SEC registration fees, will be calculated based on its converted equivalent in Philippine pesos.
- Remit the capital amount directly to the Treasurer-in-Trust account opened for and on behalf of the branch office.
- Next, submit the latest audited financial statements and have them authenticated by the Philippine Embassy or Consulate in the place of execution.
- Within sixty days of obtaining the license to operate, the branch office must deposit marketable securities worth at least US$1,704 with the SEC. You can withdraw these securities upon the insolvency of the Philippine branch’s operations.
Documents Required to Set Up a Philippines Branch Office
The following documents must be submitted to register a branch office in the Philippines:
- Form F-103 (application for establishment of a branch office)
- Name verification slip
- Authenticated copy of the Board Resolution authorizing the establishment of a Branch Office in the Philippines; designating the resident agent to whom summons and other legal processes may be served to the foreign corporation
- Financial statements of dates not exceeding one year immediately prior to the application, certified by an independent Certified Public Accountant (CPA) of the home country and authenticated before the Philippine Consulate/Embassy
- Authenticated copies of the Articles of Incorporation
- Proof of inward remittance, such as a bank certificate, etc.
- Registration data sheet
- The resident agent’s acceptance of the appointment
Due to a variety of factors, many firms have pursued the strategy of opening a branch office in the Philippines. The country’s ever-growing economy and an increase in the flow of foreign investments are a few of the reasons why investors choose to register their company in this jurisdiction over other countries. If you are also looking for an advisor who will guide you through this process, then we at Business Setup Worldwide are at your service. Our advisors in the Philippines have years of experience in this field and will help you with the Philippines branch office registration as soon as possible. For more information, contact us. We’d be glad to assist you.
