Incorporating a company in the Philippines as a foreigner can be a rewarding venture, given the country’s robust economic growth and strategic location in Southeast Asia. This guide will walk you through the essential steps and considerations to help you successfully register company in Philippines.
Step 1: Determine the Business Structure
Before starting the incorporation process, decide on the most suitable business structure for your company. Common options for foreigners include:
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Domestic Corporation: Allows up to 40% foreign ownership.
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Partnership: Can be fully foreign-owned but must be registered with the SEC.
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Branch Office: An extension of a foreign company that can engage in revenue-generating activities.
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Representative Office: Can perform non-revenue-generating activities like promotion and liaison.
Step 2: Verify and Reserve Your Company Name
Your company name must be unique and comply with the SEC’s guidelines. You can verify and reserve your desired name through the SEC’s online portal. It’s advisable to prepare alternative names in case your first choice is not available.
Step 3: Prepare Incorporation Documents
The key documents required for incorporation include:
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Articles of Incorporation: This document outlines the company’s purpose, capital structure, and information about the incorporators.
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By-laws: This contains the rules for managing the company’s affairs.
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Treasurer’s Affidavit: Confirms the subscription and payment of the required capital stock.
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Bank Certificate of Deposit: Proof of deposited paid-up capital in a Philippine bank.
Step 4: Register with the SEC
Submit the prepared documents to the SEC along with the reservation confirmation for the company name. The SEC will review your application, and once approved, they will issue the Certificate of Incorporation.
Step 5: Obtain Local Business Permits
Once registered with the SEC, you need to secure permits from the local government unit (LGU) where your business will operate. This includes:
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Barangay Clearance: Obtainable from the barangay where your business is located.
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Mayor’s Permit: Issued by the city or municipality’s local government.
Step 6: Register with the Bureau of Internal Revenue (BIR)
Registration with the BIR is crucial for tax purposes. You will need to secure a Tax Identification Number (TIN) and authority to print official receipts and invoices. The BIR registration will also categorize your company for various tax types, such as income tax, value-added tax (VAT), and withholding taxes.
Step 7: Open a Corporate Bank Account
A Philippine bank account is essential for managing your company’s finances. Most banks in the Philippines require the SEC Certificate of Incorporation, local permits, and identification documents of the signatories to open an account.
Additional Considerations
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Foreign Ownership Limits: Be aware of industry-specific restrictions on foreign ownership. Certain sectors may require majority Filipino ownership.
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Tax Incentives: Explore potential tax incentives available through investment promotion agencies like the Philippine Economic Zone Authority (PEZA) or the Board of Investments (BOI).
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Professional Assistance: Engaging local legal and accounting professionals can help navigate the complexities of the incorporation process and ensure compliance with local regulations.
Incorporating a company in the Philippines involves navigating a structured process with various regulatory requirements. By following this guide and seeking professional assistance when necessary, foreign entrepreneurs can establish a successful and compliant business in the Philippines, tapping into the vibrant opportunities the country has to offer.
