Both foreign individuals and companies are allowed to set up companies, respectively operations in the Philippines. While the corporation is the most suitable business form used by foreign citizens, overseas companies have several other types of structures available. Among these, the branch and the representative offices are the most common in the Philippines.
A branch is an extension of a foreign companies carrying out undertakings in another country following the rules of that country, in this case, the Philippines. Our company formation advisors in the Philippines can offer more information on the establishment of a branch office.
Characteristics of branches in the Philippines in 2023
As extensions of foreign companies, branch offices will be bound to undertake only the activities of the parent company. Also, the foreign business will be liable for the debts and obligations of the branch office.
All foreign companies opening branch offices in the Philippines are required to appoint a local agent to complete the registration procedure.
Branches can confidently contact our accountants in the Philippines for complete services that include bookkeeping, annual filing, tax filing and payment, payroll and social security contributions management, as well as others. Our experts cover the accounting for the local branch by taking into account the parent company’s accounting system, combined with the local requirements.
We also invite you to watch our video on how to establish a branch in the Philippines:
Requirements for setting up a Philippines branch office
The requirements to open a branch office in the Philippines depend on the activities of the parent company. With respect to that, an important aspect which must be taken into consideration is the share capital of the branch. The following amounts are required, based on the activities of the Philippines company:
- when registered with the Securities and Exchange Commission, the minimum amount required is 200,000 PHP;
- in the case of IT branch offices with a maximum of 50 employees, the amount is reduced to 100,000 PHP;
- for branch offices of import and export companies, the minimum amount necessary ranges between 5,000 and 10,000 PHP, with a few exceptions;
- for other activities, the branch needs the minimum share capital of 5,000 PHP
The foreign company must also appoint a local agent to complete the Philippines company formation process. Another requirement is related to the license which must be obtained with the SEC.
Our company registration agents in the Philippines can explain if other requisites apply in terms of branch office incorporation. Do you want to open a branch in another country, such as Bahrain? We can put you in contact with our partners.
Foreigners who wish to permanently live in the Philippines can discuss their options with our team as special conditions apply according to the nationality of the applicant. To immigrate to Philippines, one needs to be a citizen of a country that grants the same permanent residence rights to Filipino citizens. We can give you more information about the general application requirements upon request.
Documents related to registering a branch office in the Philippines
Foreign companies are required to file the following documents with the SEC upon the opening of a Philippines branch in 2023:
- the prescribed form issued by the SEC and which needs to be filled out;
- the proof of the name reservation issued by the Philippines Trade Registrar;
- the notarized copy after the foreign company management board’s decision to create the branch office;
- the notarized financial statements of the parent company for the last year;
- the drafted and notarized incorporation documents of the Filipino branch office;
- the registration data information and the proof of depositing the share capital;
- the documents through which the local representative of the branch is appointed.
Our local advisors can help with the preparation of the documents related setting up a branch in the Philippines.
Taxation of branch offices in the Philippines
Branch offices of foreign companies are subject to the following taxation and accounting requirements in 2023:
- the branch office must pay the 30% income tax and the 12% value added tax;
- it will also be subject to a withholding tax related to the compensation paid to the Filipino employees;
- a branch remittance tax of 15% is applicable on the profits made by the branch in the Philippines;
- a reduced branch remittance tax is available under the Philippines’ double tax treaties.
For assistance with the registration of a branch office in 2023, please contact our company registration experts in the Philippines.