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 | |
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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. |
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:
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:
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 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.
Foreign companies are required to file the following documents with the SEC upon the opening of a Philippines branch in 2024:
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:
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.
Branch offices of foreign companies are subject to the following taxation and accounting requirements in 2024:
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.
Foreign investments in the Philippines are increasing, as shown by statistical data published in February 2024. The data concerns the fourth quarter of 2023 and it shows the following:
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 2024, please contact our company registration experts in the Philippines.