Register Branch Office in the Philippines
Branch Office of a Foreign Corporation operating in the Philippines must obtain a "license to do business" from the SEC. The foreign corporation's head office must prove its legal existence in its country of origin, its financial soundness, and its authorization to set up a branch in the Philippines. The Branch will need to appoint a Resident Agent in the Philippines who will be in charge of receiving summons and legal processes. This allows the SEC and other entities to obtain jurisdiction over the foreign company.
Setting up a branch office normally involves remitting US$200,000 as capital investment when registering a company with the SEC. However, there are exceptions, such IT-BPO operations exporting their services or generating income abroad.
Branches engaged in activities involving advance technology, or that employ at least 50 direct employees, are required to inwardly remit a reduced amount of US$100,000 as assigned capital.
Export-oriented branches are not subject to the $200,000 or $100,000 assigned capital if exporting physical goods or services or generating revenue from abroad amounting to more than 60% of its gross sales the branch office can be fully foreign-owned, as it is considered an Export Enterprise under the Foreign Investments Act. You can register a branch office in the Philippines with as little as P5,000 paid up capital.
Registration Requirements for a Branch Office
A branch is required to obtain a license to do business here in the Philippines with the Securities and Exchange Commission (SEC). This license shall be issued by the SEC upon compliance with the following requirements:
Fill up and file the SEC Form 103 (Application of a Foreign Corporation) to Establish a Branch Office in the Philippines). This application may be signed by any person authorized by the applicant’s Board of Directors. If this is signed outside of the Philippines, it must be authenticated by the nearest Philippine Embassy or Consulate.
Pay the SEC filing and legal research fees. For the registration of a branch with a US$200,000 assigned capital, the SEC registration fees shall be calculated on the basis of its converted equivalent in Philippine pesos.
For an initial assigned capital of US$200,000, the SEC registration fees may be calculated as the peso equivalent of the following:
Filing Fee (US$200,000 x 1%) = US$2,000 + Legal Research fee (US$2,000 x 1%) = US$20.00
or a total of US$2,020
This will not apply to export oriented businesses.
Remit the initial assigned capital of US$200,000 which should be remitted separately from the registration fees. The US$200,000 shall be remitted directly to the Treasurer-in-Trust account opened for and on behalf of the branch office;
Submission of the latest audited financial statements. Such financial statements must be authenticated by the Philippine Embassy or Consulate of the place of execution thereof.
Submission of the Articles of Incorporation, by-laws or similar document authenticated by the Philippine Embassy or Philippine Consulate.
Within sixty (60) days after obtaining the license to operate, the branch office is required to deposit marketable securities worth at least P100,000 with the SEC which may be withdrawn upon cessation of the Philippine branch’s operations.
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