Register Company in Phillippines
To register company in Philippines is hassle-free if you know how to go about it. With Tetra Consultants at the wheel, you will be able to channel your time and energy into other more important aspects of your business.
With our lean-and-mean mentality, you can rely on our team of experts to provide you a seamless experience throughout the whole process of registering a business in Philippines. Our ultimate goal is for your company to be operationally ready within the stipulated time frame.
The company registration services in the Philippines provided by Tetra Consultants includes everything you will for setting up a business in Philippines:
- Register company in Philippines with Philippines Department of Trade and Industry
- Provision of local nominee director
- Company secretary and registered address
- Opening Philippines bank account
- Tax registration
- Annual accounting and tax services
Introduction to register company in Philippines
- The Philippines, officially known as the Republic of the Philippines, is an archipelago country in Southeast Asia consisting of 7641 islands. In recent years, the Philippines has successfully garnered interest from multiple foreign investors due to the country’s exceptional economic performance.
- In accordance with the International Monetary Fund (IMF), the Philippines ranked 36thout of 186 countries in terms of nominal Gross Domestic Product (GDP). Aside from this, the country’s vast domestic and regional market opportunities serve as a supplementary benefit for foreign investors.
- Not to mention, the country has an abundance of natural resources, accompanied by fertile lands and rich mineral deposits. The nation grants foreign investors a vast amount of offshore natural resources.
- The Philippines serves as an ideal location for an offshore jurisdiction due to continual growth in the economy and the presence of pro-investment government policies emplaced to attract foreign direct investments into the country. With a supportive government accompanied by a competent and extensive workforce, this country is an excellent place for onshore and offshore jurisdictions.
- Under the revised Philippines Corporation Code, there is no minimum capital stock required for stock corporations, unless otherwise specified by special law. Furthermore, the Revised Code does not mandate a requirement on the minimum number of shareholders to establish a new entity.
How long does it take to register company in Philippines and open corporate bank account?
- Tetra Consultants will complete your foreign company registration in the Philippines through a seamless and fuss-free procedure.
- Upon receiving the required due diligence documents of the directors and shareholders, Tetra Consultants will proceed ahead with the search for the availability of your preferred business trade name. Following this, we will complete company name registration with the Department of Trade and Industry.
- The incorporation process can be carried out remotely, and you will not be required to travel to register company in Philippines.
- For some business entities, you can expect the company to be registered within 3 weeks, you can expect to receive the documents of your new company including a company registration certificate, memorandum & articles of association as well as the register of directors and shareholders.
- Within 4 weeks upon proceeding to register company in Philippines, Tetra Consultants will either open a corporate bank account or with an overseas global bank depending on your business goals and objectives.
- Consequently, you can expect to start operations and issue invoices with your Philippines Company within 7 weeks upon engaging Tetra Consultants. Please note that this timeline may vary depending on the business entity, business activity, and corporate structure of your Philippines company.
- If you are keen to know more about how to register company in Philippines, Tetra Consultants has prepared a step-by-step guide.
How to open a company in Philippines?
Step 1: Planning and Strategy
- Tetra Consultants will first understand your business activities and needs before recommending the most suitable business entity for your business.
Step 2: Pre-registration requirements
- Once this is confirmed, we will advise you on the company registration requirements in the Philippines, which depend on the entity chosen for your business, and help in meeting the same. Some of the requirements include the need for a local resident agent, company secretary, preparation of financial statement for your business, and more.
- Tetra Consultants will check for the availability of your preferred business name and apply for the same with the Securities and Exchange Commission (SEC).
Step 3: Registration with SEC:
- After all the requirements are met, we will proceed with the preparation of the required incorporation documents, including the Article of Incorporation and the Treasurer’s Affidavit, and register company in Philippines with the SEC.
- The procedure to register company in Philippines can be carried out remotely under our assistance such that you will not be required to travel.
- Once the registration is completed, we will receive the Certificate of Incorporation, which will contain the company registration number. We will then courier the documents to your preferred office address.
Step 4: Acquire Barangay Clearance and Business Permit:
- Tetra Consultants will then apply to the Barangay, where the business is located. For this, we will require the Certificate of Business Registration from SEC, proof of address, and two identification documents.
- We will then apply for a Business Permit in the municipality, where the business is located. For this, we will require the Certificate of Business Registration, Barangay Clearance Certificate, proof of address, and two identification documents.
Step 5: Registration with BIR:
- We will then assist you in registering to the Bureau of Internal Revenue to receive the Community Tax Certificate which contains the Taxpayer Identification Number.
Step 6: Registration with other Agencies:
- If your business requires employing individuals, Tetra Consultants will proceed to register your business with other agencies such as the Social Security System, Philippine Health Insurance Corporation, and more.
- Depending on your business activities, we will aid you in obtaining any additional licenses or permits.
Step 7: Open a bank account:
- Tetra Consultants will then take advantage of our extensive banking network and assist you in opening a bank account.
Step 8: Compliant with the local laws:
- After the incorporation of your business is completed, we will ensure that you remain compliant with the local laws by filing tax returns annually, preparing your business’s financial statements, and more.
Types of companies in the Philippines
Foreign investors are presented with different types of companies in the Philippines prior to proceeding to register company in Philippines. Depending on your intended business activity and corporate structure and long-term business goals, Tetra Consultants will advise on the most optimum type of business entity for you.
- A Domestic Corporation is one of the most popular legal business entities for setting up a foreign company in the country. This entity is similar to a Limited Liability Company (LLC) and is regarded as a separate legal entity by the authorities.
- Business owners are not personally liable or responsible for the company’s debts and liabilities. Full foreign ownership is granted under selected business industries, which can be identified from the 11th Foreign Investment Negative List of 2018.
- Some of the requirements to open this type of business entity is:
- Resident Agent
- 2 to 15 directors, with the majority being local residents
- At least four corporate officers (President, Corporate Secretary, Treasurer, and Compliance Officer)
- Corporate Secretary, who is a Filipino
- Officers must be appointed within 15 days from the issuance of the Certificate of Incorporation. Furthermore, the Securities and Exchange Commission (SEC) must be notified within 5 days of their appointment.
- A minimum paid-up capital of USD200,000 is required for majority foreign-owned domestic corporations (at least 40% of Foreign Equity). However, the minimum paid-up capital can be reduced to USD100,000 if the company employs at least 50 Filipinos or uses advanced technology.
- For Domestic Corporations with less than 40% foreign ownership, the minimum paid-up capital is approximately USD100.
One Person Corporation (OPC)
- One Person Corporation is regarded as a separate legal entity by the authorities. This is a form of a limited company as business owners are not personally liable or responsible for the company’s debts and liabilities.
- One Person Corporation is often the common choice amongst foreign investors setting up a business entity in the Philippines as liability is limited. The owner of the firm is the sole shareholder, acting director, and president.
- Tetra Consultants will recommend you to set up an OPC if you are planning to start an SME business in Philippines. Do note that this is only applicable if your business is not in the banking or financial services industry.
- Full foreign ownership of the company is granted within selected industries such as manufacturing and export.
- There is no minimum authorised paid-up capital required. Additionally, the authorized capital does not need to be injected during the Philippine company formation.
- Some of the requirements to open this type of legal entity is:
- Resident company corporate secretary
- Resident company treasure
- The Articles of Incorporation (AOI) must include the appointment of 2 provisional candidates, one of whom will take over the company in the event of a director’s incapacitation.
- Officers must be appointed within 15 days from the issuance of the Certificate of Incorporation. Furthermore, the Securities and Exchange Commission (SEC) must be notified within 5 days of their appointment.
- Mandatory submission of the company’s annual audited financial statements within 120 days from the end of its fiscal year.
- A branch office is a viable option when foreign companies wish to expand their business in the Philippines. International business owners can establish an extension of the parent company by setting up a branch office in the Philippines.
- The purpose of a Branch Office is to facilitate operation and revenue generation in the Philippines on behalf of the foreign parent business entity.
- The parent company is completely liable for the debts and liabilities of the Branch Office.
- Some of the requirements for starting a company in Philippines in the form of a branch office are:
- Local resident agent
- Minimum one director of any nationality
- The minimum number of shareholders depends on the parent company
- Audited Financial Statements of the parent company
- A branch office in the Philippines is granted 100% foreign ownership.
- The branch office has to be registered with the Securities and Exchange Commission (SEC) to attain a business license that enables it to commence with business activities.
- For most branch offices, the minimum paid-up capital is US$200,000. However, this ultimately depends on factors such as your business activity, number of local employees, and whether you are using advanced technologies.
- Foreign investors interested in gaining an in-depth understanding of doing businesses and exploring investment opportunities in the Philippines have the option of setting up a Representative Office (RO) within the country.
- A Representative Office aids foreign investor to comprehensively evaluate the viability of doing businesses in the Philippines before finalizing a decision to register a Philippines company.
- As such, Representative Offices are only allowed to conduct limited and non-commercial activities such as market research and marketing activities for their parent company. Tetra Consultants would encourage foreign investors interested in promoting the company’s presence in the Philippines to set up a Philippines Representative Office.
- Some of the requirements to register company in Philippines in the form of a representative office are:
- One resident director
- Article of Incorporation of the parent company
- Audited Financial Statements of the parent company
- No minimum number of shareholders
- Representative Offices in the Philippines are prohibited from partaking in commercial business activities. Hence, the Corporate Income Tax does not apply to Representative Offices in the Philippines.
- No access to Double Tax Avoidance Agreements (DTAAs).
- Holding company in the Philippines can serve to be advantageous for the business whose objective is to own and control assets of other companies. Such a company does not produce any of the commodities themselves.
- The steps to register a holding company will be as per the regulations of the Commercial Code.
- Some of the requirements to set up such a business entity includes:
- Multinational company with operation in at least one Asian-Pacific region
- Investment of at least USD 200,000
- Remittance of at least USD 50,000 per year from its foreign subsidiaries
- Such a company receives complete tax exemption on all earnings received from abroad if no operation is carried out within the country
- A 10% tax rate is levied on the business if the company carries out its operations within the country.
Free Trade Zone Company
- The Philippines’ Free Trade Zone(s) are specially designed to stimulate and catalyse the growth of onshore and offshore jurisdictions incorporated in the respective zones. The Department of Trade and Industry aims to utilize Free Trade Zones to facilitate an influx in foreign direct investments and business setups which will benefit the nation’s trade value and volume.
- Fiscal and non-fiscal incentives are granted to facilitate export-oriented manufacturing and service business operations.
- Enterprises within the Philippines’ Free Trade Zones are fully exempted from Corporate Income Tax for up to 6 years.
- Upon expiration of the income tax holiday, business entities will be subjected to a Special Tax of 5% on Gross Income and granted exemption from all national and local taxes. The tax exemption granted by the government alleviates the financial fiscal burden of business owners.
- An application and business plan consisting of a description of proposed business activities must be submitted for review and approval by the Philippines’ Economic Zone Authority (PEZA).
Advantages and disadvantages of choosing to register company in Philippines
The government highly values foreign direct investments and has provided foreign investors with a business-friendly environment in the Philippines. The nation lays out numerous attractive benefits to facilitate and ease the integration of international business owners into the country’s economy.
Tetra Consultants will address any queries you have at any point in time during your company registration. Additionally, we adopt a PESTLE framework to help you comprehensively analyse the feasibility and practicality of setting up a business in the country.
- According to the Corruption Perceptions Index (CPI) published by the Transparency International Organisation, the Philippines ranked 113thout of the 198 countries evaluated. The CPI is the leading global indicator of public sector corruption. The Philippines’ less than favourable ranking implies a higher risk of corruptive activities in the nation’s public sector which affects an investor’s confidence in the country’s political stability.
- The government maintains a stable and commendable political relationship with its neighbouring countries. With the help of the nation’s ASEAN membership, it has opened up a wide array of regional business opportunities for the Philippines due to high market exposure across multiple countries in the region.
- As such, the Philippines has become one of the fastest developing countries in Asia. The Philippines government’s positive political ties with neighbouring countries provide business confidence and assurance to foreign investors.
- The Philippines establishes global diplomacy relationships with several nations and is a member of the United Nations and World Trade Organisation (WTO). Furthermore, the nation’s healthy diplomatic relations led to Free Trade Agreements, facilitating the Philippines’ business access to international markets and hence opening up numerous business opportunities.
- Business entities in the country are subjected to significantly higher corporate income tax rates in the world. However, when properly structured, business owners are granted a tax exemption by the Philippines’ Board of Investment (BOI) when requirements are satisfied. Otherwise, a 30% Corporate Income Tax will be applicable, which is relatively higher in comparison to the Worldwide Average Statutory Corporate Income Tax Rate of approximately 24%, measured across 176 jurisdictions.
- With reference to the Global Competitiveness Report published by the World Economic Forum, the country ranked 64th out of 141 countries listed. Philippines’ satisfactory performance on the Global Competitiveness Index illustrates the country’s adequate productivity in utilising its available resources to ensure sustainable economic prosperity.
- In accordance with the International Monetary Fund (IMF), the Philippines ranked 36thout of 186 countries in terms of nominal Gross Domestic Product (GDP). Furthermore, the Philippines has the 13th largest economy in Asia and 3rd largest amongst fellow ASEAN members based on the nation’s nominal GDP.
- According to the EF English Proficiency Index, the Philippines has a high proficiency in English. The country is ranked 20thout of the 100 countries listed under the EF English Proficiency Index. Furthermore, the Philippines is 2nd in terms of English proficiency in Asia. Despite the nation’s remarkable performance on the EP English Proficiency Index, Filipino is one of the official languages in the Philippines. If required, Tetra Consultants will arrange for translation services conducted by a certified translator.
- The Philippines has a population size of approximately 106 million, with an average labour participation rate of 61% according to the World Bank. As such, foreign investors will gain access to a sizeable and inexpensive labour force. The Philippines’ labour force mainly falls under the nation’s services, agricultural and industrial sectors.
- The Philippines has one of the most vibrant economies and a growing middle-income consumer market. Additionally, in accordance with The World Bank, the Philippines has an extensive and vast population size of approximately 106 million. The immense nature of the nation’s overall population grants business owners accesses to a robust domestic market.
- Based on the latest Technological Readiness Ranking published by the Economist Intelligence Unit (EIU), the Philippines ranked 55th out of 82 economies assessed, making the country the 4th most tech-ready economy in Southeast Asia. The Technological Readiness Index measures the economy’s openness to digitalisation and innovation in the coming years. The Philippines has seen an improvement from its previous ranking of 60th.
- The Philippines’ National Banking Authority, the Bangko Sentral ng Pilipinas (BSP) recently launched a supervisory sandbox in hopes to assist the nation’s FinTech business sector to compete effectively against those located in other Southeast Asian countries. A supervisory sandbox will encourage the growth of FinTechs, projecting an air of stability in the nation’s FinTech development. Not to mention, FinTech companies can test ideas without the need to enter a costly and time-consuming authorisation process.
- The country’s road to digitalisation is boosted by a Special Economic Zone (SEZ) located in Cagayan Province in Northern Luzon. The Cagayan Special Economic Zone (SEZ) was established to provide a conducive business environment for cryptocurrency and blockchain businesses, creating a FinTech ecosystem for the nation’s innovation in financial services. A supportive tech business culture provides the necessary foundation to foster the success of tech start-ups in the Philippines.
- According to the latest annual ratings issued by the World Bank, the Philippines is ranked 95thworldwide in terms of the jurisdiction’s ease of doing business. The nation’s average ease of doing business ranking exhibits the Philippines’ mediocre conducive regulatory environment for business activities.
- Philippines’ Free Trade Zones exempts business entities from import and export regulations and interventions from custom authorities. Furthermore, investors have been entitled to a corporate income tax exemption for up to 6 years. As such, relaxed investment policies enacted by the governmental bodies helps to alleviate the fiscal financial burden on business owners.
- Just recently, the Philippines’ government revised the nation’s Corporation Code to simplify foreign investment procedures and facilitating the ease of doing business in the country. The amendments seek to simplify the business application process and approval of foreign direct investments. As such, there is no mandatory requirement for the minimum number of shareholders to establish a new business entity in the Philippines.
- The Philippines ranked 111thout of the 180 countries assessed on the Environmental Performance Index (EPI). The nation’s less than favourable ranking highlights the Philippines’ lack of proficiency in addressing the environmental challenges that it faces. There is an inadequate understanding of the detriments of environmental progress in the Philippines.
- The Philippines received USD24.5 million worth of funding from the United States Agency for International Development used to attain technologies to aid in environmental conservation efforts in the Philippines.
- As part of the Department of Environment and Natural Resources’ continuous efforts to improve the country’s industrial environmental compliance, laws and regulations are emplaced. An example would be the Republic Act 9275, which aims to protect the Philippines’ water bodies from pollutions arising from commercial activities and establishments.
Accounting and tax considerations
- Business entities are generally subjected to a relatively high Corporate Tax Rate of 30% in the Philippines, which is comparatively higher than the Worldwide Average Statutory Corporate Income Tax Rate of approximately 24%, measured across 176 jurisdictions. This tax is levied upon resident companies and branch offices set up in the Philippines. Conversely, business entities under the Free Trade Zones have entitled to a corporate income tax exemption for up to 6 years, subject to approval.
- An annual mandatory statutory audit regulated by the Bureau of Internal Revenue is applicable for Philippines’ business entities with a paid-up capital exceeding PHP 50,000 (approximately USD 1,000), including branch offices of foreign business entities or corporations with annual earnings exceeding PHP 3,000,000 (approximately USD 62,000).
- Tetra Consultants will register with the Philippine Bureau of Internal Revenue, where you must file for corporate tax returns annually.
- To find more information on the accounting and tax considerations for your business, please refer to our website.
Looking to register company in Philippines?
Contact us to find out more about how to register company in Philippines. Our team of experts will revert within the next 24 hours.
Can foreigners own a company in the Philippines?
- Yes, foreigners can open a company in the Philippines. Foreigners can have complete ownership over their business in selected industries, which can be found in the Foreign Investment Negative List.
How do I register my LLC in the Philippines?
- An LLC is similar to a Domestic Corporation in the Philippines. In order to register this form of business you need to follow these steps:
- Step 1: Check availability and reserve your preferred business name with the SEC.
- Step 2: Check to see if you meet all the requirements of setting up such a company which includes a need for a resident agent, local company secretary, 2 to 15 directors, and four corporate officers.
- Step 3: You must register the company with the SEC by submitting the Article of Incorporations and any other documents required.
- Step 4: You must acquire the Barangay Clearance from the Barangay where your business is located.
- Step 5: You must acquire the business permit from the Municipality where your business is located.
- Step 6: You must then register your business with the Bureau of Internal Revenue to receive a tax certificate.
- Step 7: If you wish to recruit employees, you need to obtain a license from other government agencies including the Philippine Health Insurance Corporation, Social Security, and more.
- Step 8: You must then set up a bank account.
How do you check if the company is registered in the Philippines?
- In order to check company registration in the Philippines, you can visit the Securities and Exchange Commission (SEC)’s official website and search for the business using its trade name.
How much is the business registration in the Philippines?
- The total engagement fee depends on the services you require from us. Our service package includes company registration, nominee director service, the opening of a bank account, and more.
- This total fee includes the government fee charged during the registration process. The government fee differs depending on the legal entity you wish to set up.
How much money do you need to start a business in the Philippines?
- The total money you need to start a business in the Philippines depends on your business activities, the type of business you wish to set up, and the services you require from us at Tetra Consultants.
- For example: if you wish to set up a foreign-owned Domestic Corporation, you will be required to invest a paid-up capital of USD 200,000 and if you wish to set up a Domestic Corporation (less than 40% foreign ownership), you need to invest a paid-up capital of USD 100. Moreover, if your foreign domestic corporation’s business activity involves the use of advanced technology or at least 50 locals, then the paid-up capital will be reduced to USD 100,000.
Who needs to register with DTI?
- DTI stands for the Department of Trade and Industry. Sole proprietors are supposed to register with the DTI. In order to apply, these individuals must meet the following criteria:
- The individual must be at least 18 years of age.
- The individual must be a Filipino citizen or a foreign national who has the Certificate of Registration of Sole Proprietorship to engage in Business in the country.
- The individual may be a refugee or stateless person.
Can a foreigner buy a house in the Philippines?
- Yes, foreigners can buy a house in the Philippines. However, they are not allowed to own any land in the country. The ownership of property is subject to various restrictions. For example: foreigner can purchase their own condos as long as 60% of the property is owned by Filipinos.
What is the purpose of a DTI permit?
- The purpose of a DTI permit is to register the business of a sole proprietor. This permit ensures that no other business or organisation can have the same business name as you and records the nature and activities of the business. This will ensure that there are no legal problems faced by the business in the future.
What is the best business to do in the Philippines?
- The best business to do in the Philippines will be one in the Service, Manufacturing, and Fintech industries. The service industry accounts for 60% of the GDP and employs up to 56% of the population. Business process outsourcing (BPO) is the most important in the success of this industry because of the specially skilled workforce who are proficient in English.
- Another possible industry that may be advantageous for your business is the manufacturing industry, which accounts for 24% of the country’s GDP and generates over three million employment opportunities. You can take advantage of the extensive capabilities of the country’s manufacturing industry.
- On the other hand, you can set up business in the Fintech industry which is growing worldwide due to an increased need for digital connectivity and advancement in this digital age. Additionally, the Philippines’ National Banking Authority, the Bangko Sentral ng Pilipinas (BSP) launched a supervisory sandbox to facilitate a conducive and FinTech friendly business environment for aspiring investors, which may be advantageous for the business choosing to enter this industry.