Registration of Online Casino Gaming Gambling Sports Betting License Philippines

Philippines Online Casino License
Philippines Online Casino License

CEZA together with First Cagayan Leisure and Resort Corporation and North Cagayan Gaming & Amusement Corporation are no longer issuing licenses.

 

Foreign companies can obtain licenses in the Philippines to operate online gaming/e-gaming, online casino and sports betting businesses. A 100% foreign owned company can register and operate an online gaming business in the Philippines as a domestic corporation or by opening a branch office licensed by the SEC to transact business in the Philippines.

Officially, the only area where online gaming licenses are valid is the Cagayan Special Economic Zone (CEZA), but many operations are actually situated in Metro Manila due to the lack of the necessary infrastructure at the time the first licenses were awarded.

Incentives for CEZA Registered Enterprises:

•    4-6 years income tax holiday;
•    Special tax rate of 5% of gross income in lieu of all local and national taxes;
•    Tax credits for foreign corporations;
•    Tax and duty free importation of articles, raw materials, capital goods, equipment and consumer items;
•    Permanent resident status for foreign investors and immediate family (must maintain not less than USD150, 000 capital);
•    Other applicable incentives under Omnibus Investment Code of 1987:

o    Multiple entry visa, valid for a period of two years;
o    Tax treatment of merchandise in the Zone;
o    Tax credits;
o    Additional deduction for labor expense;
o    Exemption from local taxes and licenses;
o    Exemption from Contractor’s Tax;
o    Exemption from Wharfage Dues and any Export Tax, Duty, Impost and Fee on non-traditional export products

Full License (includes E-Casino and Sports Book)

New Application

The fees for a new application are USD40,000 (includes a non-refundable USD15,000 deposit payable upon submission of application) the balance of USD25,000 is to be paid upon issuance of the provisional of official license.

Gaming Levy: 2% of Gross Win/month from e-casino operations (on top of the special  CEZA tax rate) (Gross Win = Turnover – Player wins – Merchant Discount)

USD48,000 /annum for Sports book operations payable upon the issuance of the provisional or official license.

Annual Renewal Fees:

USD40,000 of which USD15,000 may be offset against the gaming levy payable each year.

Gaming Levy: 2% of Gross Win/month from e-casino operations (on top of the special CEZA tax rate) (Gross Win = Turnover – Player wins – Merchant Discount)

USD60,000 / annum for Sports book operations payable upon the issuance of the provisional or official license.

Restrictive Interactive Gaming License (Sports Betting):

New Application

The fee for a new application is USD26,000 upon submission of the application, of which USD18,000 is refundable if the application is unsuccessful.

USD2, 700 – Probity Cost per application chargeable to the applicant.
USD48,000 /annum – Restrictive Interactive Gaming Tax payable upon the issuance of the provisional license or official license.

Annual Renewal Fees for Restrictive Interactive Gaming License (Sports Betting):

USD15,000 – Renewal fee for Restrictive Interactive Gaming License payable upon submission of the documentary requirements necessary for renewal

USD60,000 /-annum – Restrictive Interactive Gaming Tax payable upon the renewal of the license.
Note: The fee for each additional Sporting Event is USD2,000 (per year)

Contact Dayanan Philippines Business Consultants for assistance with your application for registration of an online casino license.

Paid Up Capital Requirements for Philippines Business Registration


Business Registration Paid-up Capital Requirements

The amount of authorized capital, paid-in capital or inward remittance is determined either by the Corporation Code of the Philippines, the Foreign Investment Negative List, DTI, BSP or SEC regulations.

Depending on the nature of the business, and the amount of paid-up capital you may be required to open a Treasurer-in-Trust Fund (TITF) account to deposit the capital and obtain a bank certificate to certify that the funds are on deposit with a bank.

List of required minimum paid-up capital (not taking into account nature of business)

Majority Filipino Owned

Sole Proprietorship Filipino owned PHP 5,000 (TITF not required)
Partnership 60% Filipino owned PHP 100,000 *
Domestic Corporation 60% Filipino owned PHP 100,000 *

40% or More Foreign Owned

Sole Proprietorship Foreign owned USD 200,000 **
Partnership with more than 40% Foreign Ownership USD 200,000 **
Domestic Corporation with more than 40% Foreign Ownership USD 200,000 **
Representative Office USD 30,000
Branch Office USD 200,000 **
Regional Headquarters USD 50,000 annually
Regional Operating Headquarters USD 200,000

* Our recommendation
** Required of more than 40%  to 100% foreign owned business catering to the Philippines domestic market. Can be lowered to USD 100,000 under certain conditions:
1. Hiring a minimum of 50 employees
2. The use of new technology approved by the Department of Science and Technology.

Export enterprises and other businesses whose income is derived from overseas such as but not limited to BPOs and call centers can file for an exemption which will allow a minimum of PHP 100,000 paid-up capital.

Treasurer-in-Trust Fund 

Most banks will not allow the conversion of the Treasurer-in-Trust Fund to a corporate account until a license to transact business or a certificate of incorporation has been issued by the SEC.

To open a Treasurer-in-Trust Fund the bank will require depending on the entity being set up: the proposed articles of incorporation, partnership papers, sole proprietorship application and a board resolution for foreign companies.

The regulations always favor Filipino ownership. For 40% or more foreign ownership Foreigners are always required to maintain a higher paid-in capital.

Minimum Paid-up Capital Requirement

Based on industry:

Break Bulk Agent PHP 250,000
Cargo Consolidator PHP 400,000.00

Financing Company
– Metro Manila and other 1st class cities PHP 10,000,000
– Other classes of cities PHP 5,000,000
– Municipalities PHP 2,500,000.00

Freight Forwarders
– Domestic PHP 250,000
– International PHP 2,000,000.00

Health Maintenance Organization PHP 10,000,000.00

Insurance
– Insurance Broker PHP 20,000,000
– Reinsurance Broker PHP 20,000,000
– Insurance Broker and Reinsurance Broker PHP 50,000,000
– Life Insurance Company PHP 1,000,000,000
– Non-Life Insurance Company PHP 1,000,000,000
– Reinsurance Company PHP 2,000,000,000

Investment
– Investment Adviser/Manager PHP 10,000,000.00
– Investment Company PHP 50,000,000
– Investment House PHP 300,000,000
Lending Investor PHP 1,000,000

Local Manpower Contracting and Subcontracting PHP 3,000,000

Mining
– Required Authorized Capital Stock (PHP 10,000,000.00 authorized) PHP 2,500,000 paid-up

Non-Vessel Operating Common Carrier PHP 4,000,000

Pawnshop PHP 100,000.00

Pre-Need Plan Issuer PHP 100,000,000

Pre-Need Plan Agent PHP 5,000,000

Real Estate Investment Trust ( REIT) PHP 300,000,000

 Recruitment – Domestic 
– Corporation PHP 1,000,000
– Partnership PHP 1,000,000

Recruitment for Overseas Employment PHP 5,000,000

Retail Trade with Foreign Equity US$ 2,500,000

School (for stock corporations)
– Pre-elementary/Elementary Education PHP 1,000,000
– Elementary & Secondary Education PHP 2,500,000
– Elementary, Secondary, Tertiary PHP 5,000,000
– Post/Graduate Education

Security Agency PHP 500,000

Securities Broker/Dealer
– (New/SRO-Member) PHP 100,000,000
– Securities Broker/Dealer
– (Existing/SRO-Member) PHP 30,000,000
– Securities Broker/Dealer in Proprietary Shares (Non-SRO-Member) PHP 5,000,000

Special Purpose Vehicle PHP 31,250,000

Special Purpose Vehicle Special Purpose Corporation PHP 5,000,000

Secondary Mortgage Institution (SMI) PHP  2,000,000,000

Servicer for special purpose corporation
*Required Authorized Capital Stock (PHP 10,000,000.00) 

Transfer Agent PHP 1,000,000

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Setup Lending Investor

How to Open a Lending Investor in the Philippines

All you need to know on how to open, start and setup a lending investor in the Philippines (Lending Business or Loan Company)

Definition:  Lending Company shall refer to a corporation engaged in granting loans from its own capital funds or from funds sourced from not more than nineteen (19) persons. It shall not be deemed to include banking institutions, investment houses, savings and loan associations, financing companies, pawnshops, insurance companies, cooperatives and other credit institutions already regulated by law. The term shall be synonymous with lending investors.

Form of Organization

A lending company may only be established as a corporation. This excludes a sole proprietorship or a partnership from operating a lending business. No lending company shall conduct business unless granted an authority to operate by the SEC.

Corporate Name Requirement

The corporate name must include the words “Lending Company” or “Lending Investor” or any other word descriptive of its primary activity of granting loans to the public except words commonly used to identify financing companies shall always be included in the corporate and trade name.

Minimum Capital Requirement

The minimum required paid-in capital is One Million Pesos (PHP1,000,000.00) for the head office. Additional capital is required for each branch, extension, satellite office or unit established, the excess of the required minimum paid-up capital may be applied to the additional capital requirement as follows:

PHP300,000.00 : Metro Manila and other first class cities;

PHP150,000.00 : Second class and other cities;

PHP 75,000.00 : Municipalities.

Foreign Ownership of a Lending Investor

100% foreign ownership of a lending investor is allowed. No foreign national may be allowed to own stock unless the country of which he is a national accords reciprocal rights to Filipinos. More than 40% foreign ownership requires a minimum paid-in capital of US$ Two Hundred Thousand (USD200,000.00) .

Size of Loan and Interest

A lending company may give loans in such amounts and reasonable interest rates and charges as may be agreed upon between the lending company and the debtor: Provided, That the agreement shall be in compliance with the provisions of Republic Act No. 3765, otherwise known as the “Truth in Lending Act” and Republic Act 7394, otherwise known as the “Consumer Act of the Philippines”. As of August 19, 2013 there are no usury laws which limit the interest rate a lending investor my charge loan recipients. The Supreme Court has reduced the interest rate, in some cases as being excessive, iniquitous, unconscionable and exorbitant, hence, contrary to morals (“contra bonos mores”), if not against the law.

In accordance with the Truth in Lending Act and prior to the consummation of the transaction, a lending company shall furnish each debtor a disclosure statement, setting forth, to the extent applicable, the following information:

i. The principal amount of loan;
ii. Rate of interest of the loan;
iii. Service or processing fee, if any;
iv. Amortization schedule;
v. Any penalty charge for late amortization payment;

Requirements for Securing an Authority to Operate a Lending Investor from the SEC

i. Information Sheet;

ii. NBI clearance of Filipino directors/officers;

iii. Foreign directors/officers, shall submit a clearance from the Bureau of Immigration (BI), a photocopy of his passport showing a valid visa or stay in the Philippines, ACR i-card, and a work permit issued by the Department of Labor and Employment;

iv. President’s Sworn Statement and Undertaking that the corporation will not accept or solicit investments, other than loans, from more than 19 persons without SEC approval, and upon presentation of valid claims, it shall immediately indemnify or return the investments of persons from said unauthorized public solicitation of funds; Moreover, the sworn statement shall likewise contain an undertaking that the country or state of the foreign applicant allows Filipino citizens and corporations to do lending business therein.

v. Business plan including method of marketing its product and sources of the funds and maturities of credit; and

vi.Statement of its compliance with Rule 17.1(2)(A)(i) and (ii) of the Amended Implementing Rules and Regulations of the Securities Regulation Code.

Branches, Extension or Satellites Offices or Units

i. Loan transactions shall be booked in the authorized offices of the lending company;

ii. No lending company shall establish or operate a branch, extension office or unit or satellite office without prior approval by the SEC. The following documents shall be submitted for the opening of a branch office:

1) Information Sheet on the proposed branch;

2) NBI clearance of the manager, cashier and administrative officer of the proposed branch;

iii. The Certificate of Authority to operate a branch, extension office, unit or satellite office shall be coterminous with that of the Head Office.

SEC Licensing Fees (for secondary license):

i.Initial Application Fees shall be paid to SEC at the time of filing of application.

1) Head Office –

A fee of 1/10 of 1% of the paid-up capital of the lending company shall be paid for the issuance of a Certificate of Authority to Operate as a Lending Company.

2) Branch, extension office, unit or satellite office

A fee of 1/10 of 1% of the assigned capital of the branch, extension office, unit or satellite office shall likewise be paid for the issuance of an original Certificate of Authority.

ii. Annual fee –

An annual fee shall be paid not later than forty five (45) days before the anniversary date of the CA.

1) Head Office – 1/8 of 1% of the required paid-up capital

2) Branch Office – 1/8 of 1% of the required paid-up capital

Commencement of Operations

A corporation/company that has been duly registered and granted a Certificate of Authority to Operate as a Lending Company shall commence operations within one hundred twenty (120) days from date of grant of such authority. Failure to commence operations within said period shall be a ground for the suspension of its CA.

Usage of Funds

Lending Companies shall use at least 51% of their funds for direct lending purposes.

The total investment of a lending company in real estate and in shares of stock in a real estate development corporation and other real estate based projects shall not at any time exceed twenty-five (25%) percent of its net worth.

Maintenance of Books of Accounts and Records

(a) Every lending company shall maintain books of accounts and records as may be required by the SEC and prescribed by the Bureau of Internal Revenue and other government agencies. In case a lending company engages in other businesses, it shall maintain separate books of accounts for these businesses.

(b) The Manual of Accounts prescribed by the BSP for lending investors shall continue to be adopted by lending companies for uniform recording and reporting of their operations, until a new Manual of Accounts shall have been prescribed by the SEC.

Reportorial Requirements

General Information Sheet (GIS) – Within thirty (30) days from annual meeting, as stated in its SEC approved bylaws

Audited Financial Statements prepared by an external auditor accredited by the SEC – Within One Hundred Twenty (120) days from end of fiscal year, as stated in its SEC approved bylaws

Special Forms for Financial Statements in Electronic Format – Within thirty (30) days from the last day of submission of the annual Audited Financial Statements

Interim semi-annual financial statements (using Special Form) including the following:
• Balance Sheet;
• Income and Expense statement;
• Cash flow
• Statement of Changes in Equity
• Schedule of Liabilities
• List of Directors and Officers
• Aging of Receivables

– Within forty-five (45) calendar days from the end of the interim semi-annual period covered by the report.

Manual on Anti-Money Laundering
• If foreign participation in voting stocks is more than 40%; or
• If total assets is PHP10M or more

References:

Republic Act No. 9474 “Lending Company Regulation Act of 2007”
Republic Act No. 10881 “An Act Amending Investment Restrictions In Specific Laws Governing Adjustment Companies, Lending Companies, Financing Companies And Investment Houses Cited In The Foreign Investment Negative List And For Other Purposes.”
SEC Reduced Requirements for Financing and Lending Companies

Implementing Rules and Regulations of Lending Company Regulation Act of 2007 (Republic Act of 2007)

SEC Memo No. 3, Series of 2013

Tax Identification Number for Foreign Investors

Tax Identification Number for Foreign InvestorsForeign corporations and individuals whether resident or non-resident, who have opened/invested in a domestic corporation, branch office, representative office or any other legal entity licensed to transact business in the Philippines are now required to obtain a Tax Identification Number (TIN) from the Bureau of Internal Revenue (BIR).

SEC Filings

All documents to be filed with the SEC by corporations and partnerships after their incorporation (i.e. General Information Sheets, application for amendments) will not be accepted by the SEC unless the TIN of all its foreign investors natural or judicial, resident or non resident are indicated therein no matter their percentage of foreign ownership.

Foreigners are not required to obtain a TIN for incorporation but must instead indicate their nationality, passport number and date of issue in the registration documents (i.e Articles of Incorporation, etc…).

These new rules are to be found in Memorandum Circular No. 1, Series of 2013, issued by the Securities and Exchange Commission (SEC) which requires the mandatory inclusion of the Tax Identification Number (TIN) of foreign investors in all forms, papers and documents filed with the SEC.

The above memo was issued to comply with Revenue Regulation 7-2012 dated April 2, 2012, known as the “Amended Consolidated Revenue Regulations on Primary Registration, Updates and Cancellation”, which provides –

“Section 4(I)(V)– Non-resident Aliens Not engaged in Trade or Business (NRANETB) or Non-Resident Foreign Corporations (NRFC) shall be issued TIN’s for purposes of whithholding Taxes on their income from sources in the Philippines. The withholding Agent shall apply for the TIN in behalf of the NRANETB or NRFC prior to or at the time of the filing of thier monthly withholding tax return”

and in relation to E.O. 98, Series of 1998 signed by President Joseph Ejercito Estrada directing all persons whether natural or juridical having dealings with any government agencies and instrumentalities, including Government owned and/or Controlled Corporations (GOCCS), and all Local Government Units (LGUs) to include their TIN in all forms, permits, licenses, clearances, official papers and documents which they secure from these government agencies, instrumentalities, including GOCCs and LGUs by corporations/partnerships with foreign investors.

This is part of the government campaign to enforce tax compliance of foreign investors in the Philippines.

Philippines Business Registration for Shared Service Centers

Shared Services Business Registration

There are multiple business entities that can be used to operate a shared service center in the Philippines. Depending on the exact nature of its activities the center may be setup as a regular BPO which could be incorporated as a Domestic Corporation or Branch Office a ROHQ or RHQ may also be suitable.

A shared services center can be setup to manage a groups accounting, human resources, information technology and customer support or any other service that one or the other company participating in the center needs.

The Philippines offers tax holidays and incentives for companies located in PEZA approved locations. ROHQ have their own tax exemptions which can even extend to local employees.

Skilled Labor

Talented multilingual employees can be recruited for every kind of service that the center will manage for its members. High and mid-level management can also be found locally. The largest financial savings enjoyed by an overseas company doing business in the Philippines is the labor pool.

Opening a Business in the Philippines

Foreign companies starting a business in the Philippines might find bureaucratic hurdles that are not encountered in their home country. Dayanan Business Consultancy is here to take you step by step through the required SEC registration processes and local business permits for your business to be up and running quickly and efficiently. DBC will also advise you on complying with the foreign investment, local labor and tax laws to ensure your business success in the Philippines.

Philippines Business Registration Requirements Checklist

All businesses whether locally or foreign owned: corporations, branch offices or any other legal entity that will be licensed to do business in the Philippines are required to register their business with numerous government agencies.

The Philippines business registration requirements are:

1.    Verify and reserve the business name with the Securities and Exchange Commission (SEC)
2.    Obtain a Certificate of Inward Remittance  (for Branch and Representative Office, RHQ and ROHQ)
3.    Submit all the necessary application forms and other required documents to the SEC.
4.    Obtain from the SEC the certificate of incorporation or license to transact business

The order of the following steps may vary depending on the municipality.

5.    Obtain Barangay Clearance
6.    Obtain Mayor’s Permit (business permit)
7.    Purchase books of accounts
8.    Register the business and the books of account with the Bureau of Internal Revenue
9.    Pay to BIR the Documentary Stamp Taxes (DST) on the authorized capital
10.    Obtain an Authority to Print official receipts, invoices etc… from the BIR (can only be printed by an authorized BIR printer
11.    Register the company with the Social Security System (SSS), PhilHealth and Home Development Mutual Fund (HDMF)

Don’t forget to file the required monthly reports with the various government agencies the month following registering with them whether you have started operations or not. Failure to do so will incur penalties.

 

 

SEC Eases Registration Requirements for Branch and Representative Offices

Foreign companies whose home country does not require them to prepare and submit audited financial statements are no longer mandated by the SEC to submit an audited financial statement to obtain a license to transact business in the Philippines for their branch or representative offices.

In line with Administrative Order No.38 on Ease of Doing Business Reforms, the Commission in its meeting on 30 May 2013 resolved to revise the requirements on financial statements and supporting documents that shall be submitted with an application of a foreign corporation for a license to transact business in the Philippines, issued SEC Memorandum Circular No. 11 Series of 2013.

Extract of the memo:

A. For those whose home country requires audited financial statements, the applicant shall submit the audited financial statements (AFS) as of date not exceeding one (1) year immediately prior to the filing of the application;

If the date of the AFS exceeds the one-year requirement, the following shall be submitted:

i. Audited financial statements that are available as of date of filing of the application; and
ii. Unaudited financial statements (UFS) as of date not exceeding one (1) year immediately prior to the filing of the application.

B. For those whose home country does not require audited financial statements, the applicant shall submit the unaudited financial statements (UFS) as of a date not exceeding one (1) year immediately prior to the filing of the application provided that the UFS shall be accompanied by a Certification signed under oath by an officer of a responsible regulatory institution or by the applicant’s legal counsel that the applicant is not required to prepare and submit audited financial statements, with a citation of the law or regulation on which it is based.
This new regulation will allow foreign corporation to save time and fees in obtaining the necessary documents needed for their branch or representative office application.
This memo differs slightly from SEC Resolution No. 165 Series of 2012 revising the requirements on financial statements that accompany applications of foreign corporations for a license to transact business in the Philippines.

Business Registration in the Philippines

Business Registration in the Philippines

Whether you are a foreign company or an individual, you have multiple options depending on the nature of the business your company intends to operate.

To legally conduct business in the Philippines, your company should be registered with either the DTI or the SEC. Once registered with one of the latter, you will be required to obtain local company business permits.

Certain company structures are a better choice for individuals intending to open a small business. Philippines foreign investors generally may own and control any business within the limits of the Philippine foreign investment negative list.

 

Organized under Philippine Laws

Is a business structure which is owned by a single individual who owns all the assets and has unlimited personal liability for losses. There is no legal distinction between the owner and the business. A sole proprietorship must apply for a business name and be registered with the DTI.

Partnership

Partnerships may either be general partnerships, where the partners have unlimited liability for the debts and obligation of the partnership, or limited partnerships, where one or more general partners have unlimited liability and the limited partners have liability only up to the amount of their capital contributions. It consists of two or more partners. The managing partner always has unlimited liability, must be a Filipino citizen and resident of the Philippines. A partnership with more than P3,000 capital must register with the Securities and Exchange Commission (SEC). Under the Civil Code of the Philippines, a partnership is treated as juridical person, having a separate legal personality from that of its members.

Must be registered with the SEC and have a minimum of 2 incorporators whom are usually the first directors. Every director must own at least one share of the corporation. The liability of the shareholders of a corporation is limited to the amount of their share capital. A corporation can either be stock or non-stock company regardless of nationality. A corporation, if 60% Filipino-40% foreign-owned, is considered a corporation of Filipino nationality; If more than 40% foreign-owned, it is considered a domestic foreign-owned corporation and of foreign nationality.

A one person corporation (OPC) is a corporation with a single stockholder, who can only be a natural person, trust or estate.
The incorporator of an OPC being a natural person must of be of legal age.

Organized under Foreign Laws

1. Branch Office – is a foreign corporation organized and existing under foreign laws that carries out business activities of the head office and derives income from the Philippines. It is required to remit to the Philippines a minimum of US$200,000 as paid-in capital (this can be reduced depending on the nature of the business) .Registration with the SEC is mandatory.

2. Representative Office – is a foreign corporation organized and existing under foreign laws. It may not derive income from the Philippines and is fully subsidized by its head office. It deals directly with clients of the parent company as it undertakes such activities as information dissemination, acts as a communication center, and promotes company products, as well as quality control of products for export. It is required to have an initial minimum inward remittance in the amount of US$30,000 to cover its operating expenses and must be registered with the SEC

3. Regional Headquarters (RHQs) – An RHQ undertakes activities that shall be limited to acting as supervisory, communication, and coordinating center for its subsidiaries, affiliates, and branches in the Asia-Pacific region. It acts as an administrative branch of a multinational company engaged in international trade. It does not derive income from sources within the Philippines and does not participate in any manner in the management of any subsidiary or branch office it might have in the Philippines. Annual required minimum inward remittance is US$50,000 to cover operating expenses.

4. Regional Operating Headquarters (ROHQs) – An ROHQ performs the following qualifying services to its affiliates, subsidiaries, and branches in the Philippines.
– General administration and planning
– Business planning and coordination
– Sourcing/procurement of raw materials components Corporate finance advisory services
– Marketing control and sales promotion
– Training and personnel management
– Logistic services
– Research and development (R&D) services and product development
– Technical support and communications
– Business development
– Derives income in the Philippines
– Required capital: US$200,000 – one time remittance

Once the entity you have chosen to setup has been licensed to transact business in the Philippines you may apply for work visas. It is necessary to have the appropriate visa to avoid being deported or placed on the immigration blacklist.

Philippines Government Agencies

The Philippines has numerous government agencies making it one of the most bureaucratic countries in South East Asia. It takes time to know exactly what process each agency handles. To make it easier here is our Philippine Government Agency guide.

For those who want to streamline the processing of their documents with the government, Dayanan Philippines Business Consultants is here to assist you with Philippines business registration, tax incentive application and alien employment visa.

Philippines Government Agencies

Philippines Securities and Exchange Commission SEC

Philippines SEC
Philippines SEC

The SEC was set up on 26 Oct 1936 by virtue of the Commonwealth Act No. 83 or the Securities Act. Its establishment was prompted by the need to safeguard public interest in view of local stock market boom at that time. The SEC was abolished during the Japanese occupation and was replaced with the Philippine Executive Commission. It was reactivated in 1947 with the restoration of the Commonwealth Government. Due to the changes in the business environment under Pres. Ferdinand Marcos, the agency was reorganized on 29 Sept 1975 as a collegial body with 3 commissioners and was given quasi-judicial powers under PD902-A.

The SEC has jurisdiction and supervision over all corporations, partnerships or associations who are the grantees of primary franchises and/or a license or permit issued by the Government. It also supervises the registration of branch offices, representative offices and regional headquarters.

Philippines Department of Trade and Industry DTI

Philippines DTI
Philippines DTI

The DTI serves as the principal coordinative, sponsorship, and facilitative arm for trade, industry and investment activities, and a means to increase private sector activity to accelerate and sustain economic growth through the following strategies:

  • A comprehensive industrial growth strategy
  • A progressive and socially responsible liberalization and deregulation program
  • Policies designed for the expansion and diversification of both domestic and foreign trade

Under the DTI are seven major functional groups composed of bureaus that provide support to DTI’s line agencies and are involved in line operations, which deliver business and consumer services directly to the stakeholders and the public.

DTI agencies of special interest to foreign investors are:

– PEZA (Philippines Economic Zone Authority)

– BOI (Board of Investments)

– IPO (Intellectual Property Office)

– SEC (Securities and Exchange Commission)

It also supervises the registration of company names and sole proprietorship.

Philippines National Telecommunications Commission (NTC)

Philippines NTC
Philippines NTC

The NTC is the government agency established under Executive Order No. 546 promulgated on July 23, 1979, and conferred with regulatory and quasi-judicial functions taken over from the Board of Communications and the Telecommunications Control Bureau which were abolished in the same Order.

First and foremost, the NTC is the sole body that exercises jurisdiction over the supervision, adjudication and control over all telecommunications services throughout the country. For the effective enforcement of this responsibility, it adopts and promulgates such guidelines, rules, and regulations relative to the establishment operation and maintenance of various telecommunications facilities and services nationwide.

Although independent, in so far as its regulatory and quasi-judicial functions are concerned, the NTC remains under the administrative supervision of the Department of Transportation and Communication as an attached agency.

Philippine Social Security System SSS

Philippines SSS
Philippines SSS

The SSS is funded by salary deductions and employer contributions. Its role is to provide employee with health, disability, retirement, maternity, death and funeral benefits and salary, housing and business loans.

Home Development Mutual Fund HDMF

The birth of the Home Development Mutual Fund (HDMF), more popularly known as the Pag-IBIG Fund, was an answer to the need for a national savings program and an affordable home financing for the Filipino worker. The Fund was established on 11 June 1978 by virtue of Presidential Decree No. 1530 primarily to address these two basic yet equally important needs. Under the said law, there were two agencies that administered the Fund. The Social Security System handled the funds of private employees, while the Government Service Insurance System handled the savings of government workers.

Pag-IBIG membership mandatory for all SSS and GSIS member-employees.

Philippine Health Insurance Corporation PhilHealth

PhilhealthPhilhealth
Philhealth

PhilHealth’s role is to ensure sufficient financial access of every Filipino to quality health care services through the effective and efficient administration of the National Health Insurance Program. It is a Government owned and Operated Health Care Corporation. Its main mission is to provide basic health insurance and health care financing to all Filipinos. Funding is provided by the central and local governments and employee

Department of Labor and Employment DOLE

Philippines DOLE
Philippines DOLE

DOLE started as a small bureau in 1908. It became a department on December 8, 1933 with the passage of Act 4121. The DOLE is the national government agency mandated to formulate and implement policies and programs, and serve as the policy-advisory arm of the Executive Branch in the field of labor and employment. It consists of the Office of the Secretary, 7 bureaus, 6 services, 16 regional offices, 12 attached agencies and 38 overseas offices with a full manpower complement of 9,806.

The Alien Employment Visa (AEP) is issued by DOLE.

 

Technical Education and Skills Development Authority TESDA

The Technical Education and Skills Development Authority (TESDA) was established through the enactment of Republic Act No. 7796 otherwise known as the “Technical Education and Skills Development Act of 1994”, which was signed into law by President Fidel V. Ramos on August 25, 1994. This Act aims to encourage the full participation of and mobilize the industry, labor, local government units and technical-vocational institutions in the skills development of the country’s human resources.

tesda
TESDA

TESDA is mandated to:

Integrate, coordinate and monitor skills development programs;
Restructure efforts to promote and develop middle-level manpower;
Approve skills standards and tests;
Develop an accreditation system for institutions involved in middle-level manpower development;
Fund programs and projects for technical education and skills development; and
Assist trainers training programs.

 

Contact Dayanan Philippines Business Consultants now for assistance with Philippine government agencies.

 

Philippines Regional Headquarters RHQ Registration

A RHQ or Regional Headquarters can only be setup and operated by a foreign corporation, which has subsidiaries, branches, affiliates and clients in the Asia-Pacific Region and other foreign markets. It is a branch of a multinational company that exists under the laws of a nation other than the Philippines..

The primary purpose of an RHQ is to act as a supervisory, communications, and coordinating center for its subsidiaries affiliates and branches in the Asia- Pacific region and is not allowed to derive income in the Philippines.

 

RHQ Philippines Regional Headquarters

Philippines Regional Headquarters RHQ Registration

A minimum of USD50,000.00 must be remitted yearly to the Philippines RHQ to cover operational expenses.

Appointing a Local Agent is obligatory.

Documentary Requirements for RHQ registration.

– Name Verification Slip issued by the SEC

– Certification by the Philippine Consulate/Embassy or the Philippine Commercial Office or from the equivalent office of the Philippines Department of Trade and Industry (DTI) in the applicant’s home country that said foreign firm is an entity engaged in international trade with affiliates, subsidiaries or branch offices in the Asia Pacific and other foreign markets; in case the certification is issued by the equivalent of the Philippine DTI, the same shall be authenticated by the Philippines Consulate/Embassy

– A certificate from principal officer of the foreign entity that the said foreign entity has been authorized by its board of directors or governing body to establish its regional or area headquarters in the Philippines

– Endorsement by the Board of Investments (BOI)
– Bank certificate: Proof of inward remittance of USD50,000

Tax Incentives for Philippines RHQ

  • Exemption from corporate income tax
  • Exemption from value-added tax (0%VAT)
  •  Sale or lease of goods and property, and services to the RHQ shall be subjected to zero VAT
  • Exemption from all kinds of local taxes, fees or charges imposed by a local government unit, except real property tax on land improvement and equipment
  • Tax and duty free importation of equipment and materials for training and conferences needed and solely used for the RHQ functions, and which are not locally available, subject to prior BOI approval.
    • Equipment disposed of within 2 years after importation subject to payment of taxes and duties
  • Importation of brand new motor vehicle but subject to payment of taxes and duties.

For Expats and Filipinos

Withholding tax of 15% on compensation applicable to foreign executives holding managerial and technical positions.
(Revenue Regulation 11-2010)*

Non Fiscal Incentives for Expats

  • Special Multiple Entry Visa
    • Expatriates, including spouse and unmarried children below 21 years old will be issued this type of visa
    • Multiple entry visa will be processed within 72 hours from submission of documents to the Bureau of Immigration
    • Valid three (3) years extendible for another three (3) years
    • Exempt from securing Alien Certificate of Registration (ACR) from the Department of Labor and Employment (DOLE)
  • Tax and duty-free importation of used household goods and personal effects
  • Travel tax exemption
    • Personnel and their dependents

Contact Dayanan Philippines Business Consultants to find out how to setup your RHQ business in the Philippines.

Other business 100% foreign owned entities are domestic corporations, branch offices, ROHQ and representative offices.