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Philippines Company Registration

This article will describe the procedure for Philippines company registration . Along with it will discuss the advantages, tax structure, and documents required for company registration in the Philippines.

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Philippines Company Registration in 2023-24

Being digitally sound is one of the latest business trends and demands within the industry and Southeastern countries have stood up to the mark in this domain. The Philippines is one such nation that particularly focuses on outstanding business culture and the finance ecosystem for foreign investors. 

Philippines Company Registration

Today, the nation’s economy is expanding quickly and the current GDP of the nation lies at 6.6%, ranking the 3rd highest in the nominal GDP among Southeast Asian countries. Numerous European businesses are making investments in important Philippine industries such as production, engineering, and construction.

In addition to that, the information and communications technology (ICT) industry in the Philippines is developing quickly. The nation is well-known as a worldwide Business Process Outsourcing (BPO) hub and a desirable site for the IT and GIC services industries. As such, the  Philippines is currently ranked ninth internationally as a BPO location, due to its competitive edge being honed by a large skill pool of university graduates. 

This article will describe the procedure for company registration in the Philippines. Along with it will discuss the advantages, tax structure, and documents required for Philippines company registration.

Procedure for company registration in the Philippines

procedure for company registration in the phillipines

The procedure for company registration in the Philippines is described below:

1. Register the business name

The first step for Philippines company registration is to decide on a name for your business and register it with the Securities and Exchange Commission (SEC). A business name can be registered and reserved online with the SEC by setting up an account. 

2. Gather the documents

The entrepreneur must next compile and collect the necessary paperwork before submitting it to the Securities and Exchange Commission in order to register a company in the Philippines. The documents to be submitted include the articles of incorporation, the bylaws of the firm, and the Treasurer’s Affidavit.

3. Acquire the business licenses and permits

The entrepreneur must also secure various licenses before starting any commercial operations. The business owner must request the Barangay’s clearance, Mayor’s permit, and a business license.

4. Enroll with the Bureau of Internal Revenue (BIR)

You must enroll your new business with the Bureau of Internal Revenue(BIR) in order to comply with your tax requirements in the Philippines and obtain the tax identification number.

5. Enroll with the government agencies

If the company wishes to recruit workers, it must enroll as an employer with the following governmental bodies:

  • Social Security System (SSS)- All businesses are required to enroll with the Social Security System (SSS) and obtain an employer number
  • PhilHealth- The Philippine Health Insurance Corporation (PHIC) is in charge of running the medical insurance program known as PhilHealth. Every employer must enroll their staff with this organization. 
  • Pag-IBIG Fund– All workers insured by the Social Security System must obtain a house loan through the Pag-IBIG Fund (SSS). For those who are eligible, the Pag-IBIG Fund also offers different kinds of loans. 

Documents needed for company registration in Phillippines

documents needed for phillippines company registration

In order to  register a company in the Philippines, an entrepreneur must submit the documents that are listed below:

  • Notarized articles of incorporation– An Aarticle of Incorporation is a document that specifies a corporation’s name, objectives, location of its headquarters, number of founders, and the quantity and proportion of capital stock.
  • Tax identification number– The tax identification number can be acquired from the BIR.
  • Bylaws of the firm– The bylaws provide forth the guidelines for operating a company. Additionally, elections for the board of directors and executives together with other administrative obligations are covered.
  • Treasurer’s Affidavit- This is acknowledged by the selected treasurer, who hereby certifies that he or she has the authority to act in that position.

Business entities for Philippines company registration

The various business entities for Philippines company registration are:

1. Domestic Corporation

Domestic Corporation is the most prevalent form of business structure for company registration in the Philippines. It has a distinct legal personality from its shareholders and as such, the shareholders are only held accountable for the value that they contributed to the capital. A minimum of 2 and a maximum of 15 shareholders are needed to form a domestic corporation. Each stockholder is required to purchase a minimum of 1 unit of capital stock.

2. One-Person Corporation

A corporation with a solitary shareholder is known as One Person Corporation. The only shareholder will act as the firm’s incorporator, director, and president. Their obligation to the OPC is capped at the value of their possessions.

3. Regional Headquarters 

A regional headquarters (RHQ) is an administrative division of an overseas business with the authority to oversee, check up on, or plan activities for its affiliates, branch offices, and subsidiary companies all around the globe. Additionally, it is permitted to serve as a communications hub for all connected companies. It lacks a distinct legal personality from its parent firm and is not permitted to generate revenue.

4. Regional Operating Headquarters

An extension of an international firm that is permitted to generate money in the Philippines by providing qualified services to its head office and branch offices all over the globe is known as a Regional Operating Headquarters (ROHQ).

5. Representative Office

Establishing a representative office allows international businesses to evaluate their commercial potential in the Philippines marketplaces before committing any big expenditures.

It isn’t a distinct legal entity from its parent organization and is not permitted to engage in any profit-making operations. It is allowed to carry out market research, advertising, and marketing for the parent corporation.

6. Branch Office

A branch office is a division of an international company that operates in the Philippines in the same manner as the parent corporation does overseas. It is not a distinct legal entity from its parent corporation and the parent corporation is liable for all the debts and obligations of a branch office. It is permitted to carry on commercial activities and generate revenue from its operations in the Philippines.

Eligible criteria for Philippines company registration

eligibility criteria to register a company in phillippines

The eligible criteria for Philippines company registration are given below:

  • Incorporators: Every domestic corporation must have a minimum of two incorporators and a maximum of fifteen investors.
  • Business Secretary: A business secretary must be appointed by all domestic businesses in the Philippines.
  • Capital Requirement: The necessary capital required for domestic corporations with 100% Filipino ownership is PHP 5,000, or $100.

Cost to register a company in the Philippines

In order to register a company in the Philippines, an entrepreneur must pay the necessary fees associated with incorporating the business. 

Here are the various fees that must be paid by an entrepreneur for company registration in the Philippines:

  • SEC enrollment charges: Total SEC charges for Philippines company registration is PHP 6,750. 
  • Bureau of Internal Revenue cost: The overall cost for Bureau of Internal Revenue registration is PHP 530.
  • Department of Trade and Industry: The overall fee for enrollment with the Department of Trade and Industry is PHP 1700.

Tax structure in the Philippines

Every entrepreneur who has done company registration in the Philippines must pay various business taxes in the country.

  • Corporate income tax: The CIT rate on net revenue from every source for domestic companies is 25%.
  • Value-added Tax: A constant rate of 12% is used for the VAT. There are some transactions that are zero-rated or VAT-exempt.
  • Capital gains tax: When “capital assets” are sold or exchanged, that results in capital gains. When assets or properties that aren’t really employed in a company’s operation are sold, exchanged, or otherwise disposed of, a final tax of 6% is applied to the higher of the overall sales price or the fair market value.

Why register a company in the Philippines?

  • The ASEAN Trade in Goods Agreement (ATIGA), which the Philippines is a signatory to, provides a number of benefits for market access when incorporating a firm there.
  • Given that the Philippines has a robust ex-pat community, a high ranking on quality of life indexes, and few barriers to hiring, local businesses there can draw in foreign personnel.
  • The nation of the Philippines has been progressing economically and the present GDP growth rate in the country is 6.6.%. 
  • For entrepreneurs looking to invest in the Philippines, the Philippine Economic Zone Authority (PEZA) provides a variety of beneficial services.
  • An international entrepreneur can register a company in the Philippines without physically visiting the country.

Advantages of company registration in the Philippines

Here are the advantages of Philippines company registration:

Tax incentives

The Philippine government provides tax breaks for corporations, lower customs duties on imported machinery and raw supplies, and various forms of assistance for international investment projects.

English speaking population

English is a language that is widely spoken in the Philippines, giving the Philippines a significant language advantage. This is a great advantage for entrepreneurs who wish to register a company in the Philippines.

Reasonable cost of labor

The expense of labor in the Philippines is low in comparison to the United States and the United Kingdom. In addition to that, the cost of office buildings, utilities, and infrastructure are reasonable in the Philippines.

Conclusion

The Philippines is an ideal location for incorporating a business. The nation offers entrepreneurs numerous advantages such as attractive taxation and governmental incentives, reasonable cost of labor, highly skilled labor force, English-speaking population, and so on. Additionally, entrepreneurs prefer the Philippines as their ideal destination since the process of incorporating a firm in the nation can be done without the need to physically visit the country.

If you want to do Philippines company registration, you can reach out to our company formation experts at OnDemand International. Our experts will guide you through the process of company registration in the Philippines.

FAQ’s

A company can be registered in the Philippines by submitting an application to the Securities and Exchange Commission along with the notarized documents of the firm.

  • Domestic Corporation
  • One-Person Corporation
  • Regional Headquarters 
  • Representative Office
  • Regional Operating Headquarters
  • Branch office
  • The nation of the Philippines has been progressing economically and the present GDP growth rate in the country is 6.6.%. 
  • For entrepreneurs looking to invest in the Philippines, the Philippine Economic Zone Authority (PEZA) provides a variety of beneficial services.
  • An international entrepreneur can register a company in the Philippines without physically visiting the country.
  • SEC enrollment charges: Total SEC charges for Philippines company registration is PHP 6,750. 
  • Bureau of Internal Revenue cost: The overall cost for Bureau of Internal Revenue registration is PHP 530.

There are various benefits of registering a firm in the Philippines, such as attractive taxation and governmental incentives, reasonable cost of labor, highly skilled labor force, English-speaking population, and so on. Additionally, entrepreneurs prefer the Philippines as their ideal destination since the process of incorporating a firm in the nation can be done without the need to physically visit the country.

Every domestic corporation must have a minimum of two incorporators and a maximum of fifteen investors.