The Philippines, a burgeoning economy in Southeast Asia, offers a wealth of opportunities for business investment. Its strategic location, young and talented workforce, and supportive government policies make it an attractive destination for foreign entrepreneurs. If you’re a foreigner looking to register a company in the Philippines, this guide will help you navigate through the necessary steps and highlight some key aspects of doing business in this vibrant country.
Understanding the Business Landscape in the Philippines
The Philippines has a diverse economy characterized by its growing service sector, burgeoning manufacturing industry, and a significant agricultural sector. The country’s economic policies are designed to attract foreign investment, and several sectors are open to 100% foreign ownership, particularly in outsourcing, manufacturing, and export-oriented enterprises. The government also provides various incentives for investors, such as tax holidays and duty exemptions for importation of equipment.
Types of Business Entities
As a foreigner, you can choose from several types of business entities to establish in the Philippines:
1. **Sole Proprietorship**
2. **Partnership**
3. **Corporation**
– **Domestic Corporation**: At least 60% Filipino ownership.
– **Foreign-Owned Domestic Corporation**: More than 40% foreign ownership.
4. **Branch Office**
5. **Representative Office**
6. **Regional Headquarters (RHQ)**
7. **Regional Operating Headquarters (ROHQ)**
Each entity has its advantages and compliance requirements. For instance, a wholly foreign-owned domestic corporation offers the flexibility of full control, while branch offices are extensions of parent companies and not separate legal entities.
Requirements and Steps for Company Registration
1. **Name Reservation**: Before doing anything, you need to reserve a business name through the Securities and Exchange Commission (SEC) online system. Make sure the name is unique and complies with naming rules.
2. **Register with the SEC**: For corporations and partnerships, submit the necessary documents to the SEC. These typically include Articles of Incorporation (for corporations), Articles of Partnership (for partnerships), and the Treasurer’s Affidavit. You also need to pay the appropriate registration fees.
3. **Minimum Capital Requirements**: Foreign-owned companies have specific minimum capital requirements:
– Export enterprises: USD 100,000
– Domestic market enterprises: USD 200,000 (or USD 100,000 if advanced technology is used or employs 50 direct employees)
4. **Obtain Business Permits and Licenses**: After SEC registration, you need to secure a business permit from the local government unit (LGU) where your business will operate. This includes Barangay Clearance, Mayor’s Permit, and zoning clearance.
5. **Register With BIR**: You must register your company with the Bureau of Internal Revenue (BIR) to obtain a Tax Identification Number (TIN) and Authority to Print (ATP) official receipts and invoices.
6. **SSS, PhilHealth, and Pag-IBIG Registration**: Register your employees with the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and the Home Development Mutual Fund (Pag-IBIG Fund).
Additional Considerations
1. **Investment Incentives**: Explore incentives under the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) for tax holidays and other benefits.
2. **Employment Regulations**: Familiarize yourself with local labor laws, including mandatory benefits and wage rates.
3. **Anti-Dummy Law**: Be aware of the Anti-Dummy Law which restricts foreigners from exerting control when limited foreign ownership is imposed.
4. **Legal Assistance**: It’s advisable to seek legal assistance from a local law firm to navigate through compliance and documentation effectively.
Conclusion
Registering a company in the Philippines as a foreigner involves multiple steps but is definitely achievable with the right information and preparation. The country’s friendly business environment and supportive policies present a fertile ground for foreign investments. With thorough planning and adherence to local laws and regulations, your business venture in the Philippines can be a rewarding endeavor.
Sure! Here are some suggested related links about how a foreigner can register a company in the Philippines:
Securities and Exchange Commission Philippines
Department of Trade and Industry Philippines