The Philippines, located in Southeast Asia, is one of the emerging business platforms that has become a one-stop-shop for investors.
Gone are when business investors had to deal with complicated business processes to start their business operations.
Today, incorporating a business unit in the zone has become hassle-free and can be initiated with just one click of a button. As a result, today, the international company in the Philippines hold a higher value.
When it comes to incorporating a business unit, one has to be very sure regarding the corporate structure that one selects. Finalizing the corporate design entirely depends on the capital invested and the number of shareholders available.
If you are looking forward to starting a business in the Philippines, then a corporation can be considered.
Corporation in the Philippines
A corporation is a legal business structure that holds a separate identity from its shareholders or incorporators.
The ownership division is divided into Shares and Stocks issued to the shareholders, who then become the business owner.
The entity is entitled to enter into contracts, loan, hire employees, pay taxes etc., and requires a minimum of 5 individuals who can be called incorporators.
The Philippines doesn't hold a Limited Liability Company (LLC) concept. Thus, a corporation is one of the closest structures preferred by the investors, granted by the Corporation Code of Philippines.
There are two types of corporation in the Philippines, namely:
- One-person corporation (1 Director)
- Domestic corporation (2 to 15 Directors)
Why Set Up Corporation Philippines Company?
Company registration in the Philippines is one of the most brilliant moves you can make if you are willing to invest your money to fetch higher returns.
A few of the benefits that you can avail yourself by registering a corporation in the Philippines involve:
Risk is limited to the corporation
When it comes to investment, the first thing that triggers investors' mindset is the risk they might have to bear if the company suffers losses.
In that case, the Philippines corporation company turns out to be a saviour as the risk to be borne is limited to the corporation.
This benefits the investors greatly, and thus, they get provoked towards investing and company registration in the Philippines.
Exist indefinitely
Any corporation incorporated in the Philippines stands separately from its shareholders, which means it holds a unique identity accordingly.
The business structure also holds the capacity to act independently from its shareholders.
Escalate capital accordingly
When it comes to a corporation, the capital invested can be increased accordingly. When it comes to leveraging the capital bar, a business unit can do it in various forms, like:
- Get financed by early-age investors
- By reinvesting the profit chunk
- Borrow through banks or bonds
- Selling company stocks
Ownership is transferable
Another benefit that the business investors can avail of by incorporating a corporation setup is that you can transfer the company owns at ease.
Knowing the taxation part will help you stay the upper hand, and thus, here's a guide on VAT Registration in the Philippines, which is a must-read!
How to Incorporate Corporation in the Philippines?
A specific law gets passed in every nation that specifies the regulations and business code. In the Philippines, the Corporation Code has been revised, which took effect on 23rd February 2019.
The core aim was to simplify the business procedures, and thus, the revision eased the entire process of doing business in the Philippines.
You need to follow a few steps to incorporate a business in the Philippines, which includes:
Reservation of Trade Name
A business trade name has to be unique and specific, aligning with the same with the activities that will be carried out accordingly.
You need to undergo the research process and then select a business name at the initial stage. Make sure that the chosen name doesn't sound offensive in any way. Also, it shouldn't match the name of the existing players in the market.
Preparation of the Relevant Business Documents
Business documents can't be overlooked when it comes to company formation.
To start a corporation business in the Philippines, one has to submit the following essentials:
-
- Cover sheet for registration
- Articles of association
- Memorandum of association
- By-laws
- Certificate of bank deposit
- SEC Form No. F-100 to conduct business under Foreign Investment Act of 1991
- Payment filings
- Treasure's affidavit
- A joint affidavit, in case, if two incorporators undertake steps to name the corporation
Get Barangay Clearance
Once your business is registered with the Commission, the next step is to get a Barangay Clearance in the Barangay where your business is located. Submit an application form to the officials with the following documents:
- Certificate of Business Registration from the SEC
- Two valid IDs
- Address proof such as Contract of Lease or Certificate of Land Title
This process requires one day for completion upon submission of the documents.
Acquire Business Permit from the Mayor's Office
Visit the nearest Municipal office where the business is located and fill up the application form. Upon filling, submit the application form with the following documents:
- Certificate of Business Registration from the SEC
- Barangay Clearance Certificate
- Two valid IDs
- A valid address proof
After submitting all the documents, it will take around one week to complete this process.
Register with the Bureau of Internal Revenue (BIR)
Once you have the Mayors' Business Permit, you can register your business with the BIR. Firstly, you need to go to the Regional District Office (RDO), where your business is located. Fill up the application form and submit the same with the following documents:
- Certificate of Business Registration from the SEC
- Barangay Clearance Certificate
- Business Permit from the Mayors' Office
- Two valid IDs
- A valid address proof
Completing the mentioned steps sequentially is of utmost importance. However, how well are you aware of the steps to be followed or how many connections you hold to complete your task faster?
Well, being a foreigner, you may not have the correct answer to the above query, and thus, you need to be smart enough to get your task done in a more intelligent and faster way.
Getting in touch with professional experts is highly recommended as they are well-versed with the overall proceedings.
Business Setup Worldwide is one of the top ten business consultants in Dubai that you can count on to give a kick-start to incorporate your dream business.
Our experts are here to listen to your business needs and provide tailored solutions accordingly. For more information, get in touch with us today- we'd be glad to assist!
