| JSC | Free Zone Company | Sole Proprietorship | Holding Company | Holding-Operating Company | Branch Office | Rep Office | |
|---|---|---|---|---|---|---|---|
| Local Name | Joint Stock Company | SEZ company | Sole proprietorship | Regional HQ | Regional Operating HQ | Branch | Representative Office |
| Company Setup Time | 20 days | 25 days | 25 days | 25 days | 25 days | 25 days | 25 days |
| Bank Account Opening | 10 days | 10 days | 10 days | 10 days | 10 days | 10 days | 10 days |
| Government Grants Available | Yes | Yes | Yes | Yes | Yes | No | No |
| Government Contracts Bidding | Yes | Yes | Yes | Yes | Yes | No | No |
| Limited Liability | Yes | Yes | Yes | Yes | Yes | No | No |
| Client Required to Travel | No | No | No | No | No | No | No |
| Inquiry | Inquiry | Inquiry | Inquiry | Inquiry | Inquiry | Inquiry |
Corporate Structure Explained
Philippine Branch Office
- Foreign companies can open a branch office in the country, few industry specific restrictions exist. It requires the appointment a representative, which must reside in the Philippines. It does not require the appointment of any director or shareholder.
- This entity type must be registered with the Philippines Securities and Exchange Commission (SEC). If the branch creates more than 50 jobs, the head office is required to invest US$ 100,000 otherwise US$ 200,000 will be needed. If the branch plans to trade in the retail sector, the minimum investment is US$ 3 million.
Philippines Representative Office
- Foreign companies can open representative offices if they are not allowed to carry out business or productive activities. They can, however, engage in market research and promote the parent company business. A security bond of at least US$ 30,000 must be deposited.
Philippines Joint-Stock Corporation
- In order to register a JSC, the company must appoint a Board of Directors with at least five members having at least one share. Owners of such companies may be of any nationality except in industries which are limited to foreign investment.
- A JSC can be established by local residents with a share capital of US$ 150. If they are foreigners, US$ 100,000 is required, if the company has more than 50 employees, a minimum of US$ 200,000 is required. if the company plans to trade in the retail sector, the minimum investment is US$ 3 million.
- After incorporation, it is necessary to submit annual audited financial statements and annual returns, including the name / address of all owners, managers and directors, the company’s capital composition, the earnings and dividends granted to shareholders and investments made.
Philippines Free Zone Company
- Clients wishing to set up an export company can have a subsidiary in a special economic zone. Once the company has been fully incorporated, it must submit a business plan to the local administration.
- We recommend establish business in a free zone if more than 75% of the goods are expected to be exported.
Philippines Sole Proprietorship
- A sole proprietorship is the most appropriate option for those wishing to start their own business in the Philippines. There is no need for this entity to have capital.
- It can be incorporated by one person with responsibility of director and owner.
- For the incorporation of this business, the owner must not be resident except in restricted sectors for foreign investment.
- The owner of this entity is responsible for 100 per cent of the company’s losses. It can be limited in the case of small shops, guesthouses and small restaurants.
Holding Company (Regional Headquarters)
- A holding company requires a minimum initial investment of US$ 200,000 to set up business. A minimum annual amount of US$ 50,000 for transfers from its subsidiaries abroad. This type of business entity is totally exempt from corporate tax on its foreign income. If the company does not conduct business in the country, the corporate tax rate will be reduced to 10%.
- These entities are exempt from local taxes and customs duties on imported goods, such as equipment and cars. Visa requirements are also easier.
Holding-Operating Company (Regional Operating Headquarters )
- This business entity provides management services to the subsidiaries and the sister companies in the country. This is the main difference between a regional headquarters business entity. Philippine laws disallow services to companies not included in the Group.
- ROH enjoys a reduced corporate tax rate of 10% from revenues earned from local sources.