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.
About David Elefant
Philippines business consultant specializing in assisting companies setup their operations in the Philippines.
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