Foreign investors interested in starting a business in the Philippines must comply with the regulations imposed by the Corporation Code, by the Civil Code and by the Foreign Laws Act. According to these laws, the following types of companies can be registered in the Philippines:
- the sole proprietorship and the partnership which are regulated by the Civil Code;
- the corporation which is regulated by the Corporation Act;
- the branch office, the representative office and the regional headquarters which are provided for by the Foreign Laws Act.
Our Philippines company formation consultants explain below the requirements to open the type of companies mentioned above.
The sole trader and the partnership in the Philippines
The Philippines sole trader is a type of structure registered by a single person who want to start a business in this country. It is the simplest form of doing business in the Philippines, however it still requires registration with the Department of Trade and Industry and must obtain a tax identification number.
With respect to the partnership, this type of company can be categorized into general and limited partnership and requires at least two individuals or companies in the Philippines. This type of company must also register with the Trade Register or the Securities and Exchange Commission, if its share capital exceeds 3,000 PS.
The Philippines corporation
Foreign entrepreneurs interested in company registration in the Philippines must know that the corporation is the most popular type of company in this country. The corporation can be:
- stock corporation in which the capital is divided into shares;
- non-stock corporation which is used for charitable, cultural or educational purposes.
The corporation must have at least 15 shareholders, individuals or other companies, and a minimum share capital of 15,000 PS. The Philippines corporation must be registered with the Securities and Exchange Commission.
Types of structures available for foreign companies in the Philippines
The Foreign Laws Act provides for the business forms foreign companies can set up in the Philippines. These are:
- the representative office which can be created for marketing purposes and must have a minimum remittance of 30,000 USD which must cover its expenses;
- the branch office which is an extension of the parent company in the Philippines and requires a minimum share capital of 200,000 USD;
- the regional headquarters which requires a share capital of 50,000 USD and has the role to supervise and act as communication channel between the parent company and its satellite companies in the Philippines;
- the regional operating headquarters which requires a minimum capital of 200,000 USD has an administrative role.
If you are interested in company formation in the Philippines and need assistance in choosing the right type of company, please contact us.