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 company 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.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) | Philippines law |
|
Best Used For |
Expanding the company’s activities to the Philippines. |
|
Minimum share capital for the branch in Philippines |
Minimum capital can apply according to industry and size of the branch; an annual registration fee and other fees apply. |
| Time frame for the incorporation (approx.) | About 1 to 2 months. |
| Documents to be filed by the parent company when they establish a branch in the Philippines |
Special license for the branch, the parent company’s Articles of Incorporation, list of shareholders, proof of registration in its country of origin, and financial information. |
| Management (Local/Foreign) |
Foreign |
| Legal representative required (YES/NO) in the Philippines |
Yes |
| Local bank account (YES/NO) |
Yes |
| Independence from the parent company |
The branch is not a separate/independent entity from the parent company. |
| Liability of the parent company | The parent company is fully liable for the debts and obligations of its Philippines branch, |
| Corporate tax rate in Philippines |
25% plus 15% tax on the profits remitted to the foreign tax office (after tax). |
| Annual accounts filing requirements |
Filing and disclosure obligations apply. |
| Possibility of hiring local staff |
Can hire staff according to the local rules. |
| Travel requirements for incorporating branch/subsidiary |
Yes |
| Double tax treaties | Access to around 40 tax treaties, according to the provisions of these DTAs. |
Table of Contents
Characteristics of branches in the Philippines in 2025
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. In case you are interested in opening a company in Vietnam or extending your business to this jurisdiction, we can put you in contact with our partners.
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:
- US$ 200,000 for the foreign branch office (in the case of a domestic market enterprise);
- PHP 5,000 for a foreign branch office (in the case of an export market enterprise);
- US$ 30,000 for a foreign representative office;
- US$ 50,000 for the company’s regional area headquarters;
- US$ 200,000 for the regional operating headquarters.
Please keep in mind that these are the minimum capital requirements imposed by the Securities and Exchange Commission (SEC) only for establishments of foreign entities. The minimum paid-up capital for domestic companies is based on the industry in which the company activates and our experts in company registration in Philippines can give you more details.
In addition to the minimum capital requirements, the SEC also imposes a set of fees for companies that open a branch in the Philippines. We list some of these below:
- The filing fee for the branch office is 1% of the inward remittance of the foreign company, however, no less than PHP 2,000;
- For foreign companies that open a representative office, the filing fee is 1/10th of the 1% of the inward remittance fee (but no less than PHP 2,000);
- Filing fees also apply in the case of regional operating headquarters, and for these, the filing fee is expressed in US$.
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 live in the Philippines permanently 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 2025:
- 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.
All documents need to be translated into English when they are originally issued in a different language. In some cases, an authenticated copy of a certain document can be required (such as an authenticated copy of the foreign company’s Articles of Incorporation) and in this case, the authentication is performed by a notary.
The SEC form to be filled out when submitting the application form depends on the type of business the foreign legal entity is setting up in the Philippines (stock branch office, stock representative office, or non-stock branch or representative office – relevant for those that set up foundations or NGOs).
Another relevant issue foreign companies should take into account when they set up a branch in the Philippines is the financial ratios required for this type of establishment:
- The solvency ratio needs to have a benchmark value of 1:1 (its calculation formula being total assets divided by total liabilities);
- The liquidity also needs to have a 1 to 1 value, calculated as current assets divided by current liabilities;
- Lastly, the debt-to-equity ratio needs to have a benchmark value of 3 to 1 (calculated as total liabilities divided by equity).
Our team specializing in company formation in Philippines will give you more details about the relevant financial requirements for branches, as well as details about the mandatory documents (including the need to translate or authenticate certain documents).
Our local advisors can help with the preparation of the documents related to setting up a branch in the Philippines. Working with our team will ensure the correct submission of all the needed documents and, in some cases, it can shorten the processing time – especially when there are no delays caused by incorrect or incomplete submissions.
Taxation of branch offices in the Philippines
Branch offices of foreign companies are subject to the following taxation and accounting requirements in 2025:
- The branch office must pay the 25% income tax and the 12% value-added tax;
- It will also be subject to a withholding tax related to the compensation paid to Filipino employees;
- A branch remittance tax of 15% is applicable on the profits made by the branch in the Philippines;
- The branch remittance tax is subject to an exemption on the profits derived from activities that take place within the Economic Zone Authority.
The Philippine Economic Zone Authority is in charge of establishing economic zones in the country that are dedicated to foreign investments. Companies that set up their permanent establishment in these areas benefit from certain tax incentives, support for their business, and certain simplified procedures for starting a business in the Philippines.
Moreover, certain non-fiscal advantages are available, such as special visas for foreign nationals (who are allowed to enter these areas by using multiple entry visas). These are issued to allow investors and their spouses to enter the country and, in time, even move to the Philippines, subject to conditions.
Expected economic growth
Philippines’s economy was projected to grow by 5.8% in 2024 and increase to 6.1 percent in 2025. Other economic projections are summarized below by our team:
- The Philippines continues to remain one of the highest growing economies in the region;
- Inflation is believed to settle within the government target for 2025. Officials said that they expect this to average 3 percent for 2025;
- As the country’s economy increased by 5.2 percent in the third quarter of 2024, the gross domestic product expansion recorded was 5.8 percent;
- It is expected that domestic demand will be important for economic growth.
Our team also includes specialists who can assist investors after the registration of their branch. Our accountant in the Philippines will provide services and assistance for the timely annual financial submissions and tax payments by branches.
For assistance with the registration of a branch office in 2025, please contact our company registration experts in the Philippines.