Company Formation in the Philippines

K&C’s team of business consultants, lawyers and accountants specialize in company formation for foreign companies registering businesses in the Philippines.  We carefully assess your future business in the Philippines and determine the ideal investment vehicle. We will assist with formation procedure, planning, and registration with the relevant government agencies such as the Philippines SEC, DTI, BIR and other Philippines government agencies .

K&C assists in determining type of Company Formation in the Philippines

• 100% fully foreign owned Branch Office
• 100% fully foreign owned Representative Office
• 100% fully foreign owned domestic corporation (subsidiary)
• 60/40 owned domestic corporation
• Regional Headquarters
• Regional Operating Headquarters
  

K&C will perform the following for Company Formation

• Determine company (Foreign Branch, Foreign or 60/40 Domestic Corporation)
• Determine Capital Requirement
• Open local bank account
• Register and secure company name with SEC or DTI
• Identify Shareholders, Directors, Nominees and Incorporators
• Draft Articles of Incorporation and By-Laws
• Process documents with SEC, BOI, PEZA, BIR, SSS, etc
• Process Mayor's Permit and Business Permit
  

SEC - Securities & Exchange Commission Registration

Foreign investors typically register and start a business in the Philippines through a Domestic corporation or a Branch Office . These are the most common types of entities registered by foreign businesses in the Philippines.  Either entity has its advantages and disadvantages. Corporations are more favorable in terms of administrative regulation. Branches, which may be more advantageous taxwise, cannot be used if the activities they intend to undertake are included in the Foreign Investment Negative list . Corporations on the other hand, can accommodate the necessary Philippine equity requirements instituted by Philippine law.

If a company exports goods or services and generates revenue from abroad in excess of 60% of its gross sales are considered Export Enterprise under the Foreign Investments Act which can be fully foreign owned and not required to comply with the regular $200,000 assigned capital requirement for DMEs.   Branch and domestic corporations considered export enterprises can be registered with as little as P5,000 paid up capital.  However, most banks require P25,000 - P50,000 to open a corporate bank account. The company will NOT have to remit the $200,000 to have full foreign ownership.

Domestic Corporation (Subsidiary) Formation in the Philippines
Forming or registering a corporation requires a minimum of 5 incorporators, each of whom must be actual persons who must hold at least a single share in the company. Majority of the incorporators must be Philippine resident. A Corporation must have between 5 and 15 directors (or trustees if a non-stock corporation), each of whom must have at least one qualifiying share of stock. Majority of the directors (or trustees) must be Philippine residents. All Domestic Corporations (those incorporated in the Philippines) obtain their license from and are registered with the Securities and Exchange Commission. The SEC requires prospective Corporations to reserve and register a name, submit proposed Articles of Incorporation and By-Laws which are compliant with the requirements of the Corporation Code of the Philippines, and prove that they have the minimum capitalization requirements for the industry or business it is engaged in. Under the Foreign Investment Act , the minimum paid-up capital requirement for corporations considered Domestic Market Enterprises (DMEs) where the foreign equity exceeds 40% is US$200,000, which must be remitted into the Philippines. The registration requirements (assigned capital, in particular) do not apply to DMEs that are export-oriented or involve advance technology and will employ at least 50 employees. Assigned capital requirements for these entities are substantially less.

Banch Office Formation in the Philippines
A Branch of a Foreign Corporation doing business in the Philippines must obtain a license to do so from the SEC upon registration. The foreign corporation's head office must prove its legal existence in its country of origin, its financial solvency, and its authorization to set up a branch in the Philippines. The Branch will need to appoint a resident agent in the Philippines who will be in charge of receiving summons and legal processes on its behalf. This allows the SEC and other entities to obtain jurisdiction over the foreign company.

Starting and setting up a branch normally involves remitting US$200,000 as capital investment when registering a company with the SEC in the Philippines. Branches engaged in activities involving advance technology, or that employ at least 50 direct employees, are required to inwardly remit a reduced amount of US$100,000 as assigned capital. Export-oriented branches are NOT subject to minimum assigned capital requirements of $200,000 or $100,000. Special rules apply for certain types of branch operations. It is advisable for companies to register their remittance with Central Bank of the Philippines or Bangko Sentral ng Pilipinas and obtain a BSRD .

The failure of a foreign corporation to obtain a license to do business prevents the entity from filing suit in the Philippine courts. The issuance of a certificate of incorporation from the SEC signifies the commencement of corporate existence and juridical personality for a company.

Before commencing operations in the Philippines, businesses must also register with the Bureau of Internal Revenue (BIR), the Social Security System (SSS), the Home Development Mutual Fund (HDMF), the Philippine Health Insurance Corporation (Phil-Health) , and the local government unit where its principal office will be located.  View SEC & Other Government Fees for Formation

Formation of Foreign Owned Company

• Register BPO, KPO, Outsourcing or Backoffice Company
• Register Call Center Company
• Register IT, Software or Web Development Company
• Register Animation Development or Design Company
• Register Online Casino, Betting and Gaming Company
• Register Engineering Company Company
• Register Medical Transcription Company
• Register Legal Transcription Company
• Register Import, Export or Trading Company
• Register Manpower Recruitment Company
• Register Mining Company
• Register Shelf Corporation
  

Tax and Incentives Registration

• PEZA - Philippine Economic Zone Authority
• BOI - Board of Investments
• CEZA - Cagayan Economic Zone Authority
• BCDA - Bases Conversion and Development Authority
• SBMA - Subic Bay Metropolitan Authority
• CDC - Clark Development Corporation
  

Contact Kittelson & Carpo Consulting