Philippines business registration Archives - Dayanan Business Consultancy

One Person Corporation

The Revised Corporation Code 2019 of the Philippines or Republic Act No. 11232

Does a One Person Corporation (OPC) only need one individual to register?
Read below to find out the requirements to register an OPC.

1. Incorporators

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.

2. Corporate Name

The suffix “OPC” should be indicated by the one person corporation either be-low or at the end of its corporate name.

3. Single Stockholder as Director and Officer

The single stockholder shall be the sole director and president of the OPC.

4. Designation of Nominee and Alternate Nominee

The single stockholder is required to designate a nominee and an alternate nominee named in the Articles of Incorporation who shall replace the single stockholder in the event of the latter’s death and/or incapacity. The written consent of both the nominee and alternate nominee shall be attached to the application for
incorporation.

5. Only Articles of Incorporation Needed

The OPC shall file its Articles of Incorporation (AI) in accordance with the requirements of Section 14 of the Revised Corporation Code of the Philippines. The AI must set forth its primary purpose, principal office address, term of existence, names and details of the single stockholder, the nominee and alternate nominee and the authorized, subscribed and paid-up capital and such other matters consistent with law and which may be deemed necessary and convenient.

6. Bylaws

The OPC is not required to submit and file its Bylaws.

7. Minimum Capital Stock Not Required

The OPC is not required to have a minimum authorized capital stock except as otherwise provided by special law.

Further, unless otherwise required by applicable laws or regulation, no portion of the authorized capital is required to be paid-up at the time of the incorporation.

8. Officers

Within fifteen (15) days from the issuance of its Certificate of Incorporation, the OPC shall appoint a Treasurer, Corporate Secretary, and other officers, and notify the SEC thereof within five (5) days from appointment, using the Appointment Form as may be prescribed by the SEC.

The single stockholder shall not be appointed as Corporate Secretary but may assume the role of a Treasurer.

9. Bond Requirement for the Self-Appointed Treasurer

The single stockholder who assumes the position of the Treasurer shall post a surety bond to be computed based on the authorized capital stock (ACS) for the OPC as shown in the Table below:

ACS	Surety Bond Coverage*
1.00 to 1,000,000.00	1,000,000.00
1,000,001 to 2,000,000.00	2,000,000.00
2,000,001 to 3,000,000.00	3,000,000.00
3,000,001 to 4,000,000.00	4,000,000.00
4,000,001 to 5,000,000.00	5,000,000.00
P 5,000,001.00 and above = Amount of surety bond coverage shall be equal to the OPC’s ACS.

* Subject to renewal every two (2) years or as may be required, upon review of the annual submission of the Audited Financial Statements/Financial Statements certified under oath by the company’s President and Treasurer.

** The bond is a continuing requirement for so long as the single stockholder is the self-appointed Treasurer of the OPC.

*** The bond may be cancelled upon proof of appointment of another person as the Treasurer and Filing of the Amended Form for the Appointment of Officers.

10. Change of Nominee or Alternate Nominee

The single stockholder may, at any time, change its nominee and alternate nominee by submitting to the Commission the names of the nominees and their corresponding written consent. The Articles of Incorporation need not be amended.

11. Incapacity or Death of the Single Stockholder

In case the single stockholder becomes incapacitated, the nominee can take over the management of the OPC as director and president. At the end of the incapacity, the single stockholder can resume the management of the OPC.

In case of death or permanent incapacity of the single stockholder, the nominee will take over the management of the OPC until the legal heirs of the single stockholder have been lawfully determined and the heirs have agreed among themselves who will take the place of the deceased.

12. Who are Not Allowed to Form OPC’s

Banks, non-bank financial institutions, quasi-banks, pre-need, trust, insur-ance, public and publicly companies, non-chartered government-owned and controlled corporations (GOCCs) cannot incorporate as OPC.

A natural person who is licensed to exercise a profession may not organize as an OPC for the purpose of exercising such profession except as otherwise provided under special laws.

13. Foreign National

A foreign natural person may put up an OPC, subject to the applicable capital
requirement and constitutional and statutory restrictions on foreign participa-tion in certain invest areas or activities.

• Minimum required paid-in capital for a corporation with more than 40% foreign ownership catering to the Philippines domestic market USD200,000.00.

• Export Enterprises; minimum recommended paid-in capital PHP250,000.00.

• Export enterprises located in Philippine Economic Zone Authority approved IT Buildings are required to have a paid-in capital equivalent to 25% of the total project cost.

Required documents/information:

Company Name
Nature of Business
Filipino Director: Name and Address, 2 x Government IDs, Tax Identification Number (TIN).
Foreign Director: Name and Address, copy of passport
Office Address
Name and Address of Treasurer in Trust

TAX ID

Every shareholder, director and officer of the company is required to obtain a Philippines Tax Identification Number (TIN). A Special Power of Attorney is required, authorizing Dayanan to file the TIN application.

All documents signed overseas must be authenticated by a Philippine Embassy/Consulate or with an apostille affixed thereto.

Starting a Philippine Business as a Foreigner

It doesn’t not matter whether you’re a foreigner or a Filipino, it really is difficult to start a business in the Philippines.

Tips for foreigners who want to register a company in the Philippines

Do your homework! There are many restrictions on foreign equity ownership of businesses in the Philippines. The percentage of foreign ownership will also dictate the allowed number of foreign directors and officers of the company.

There are exceptions; up to forty percent Foreign ownership of educational institutions is allowed as stated in the 1987 Constitution and in the Foreign Invest Negative List; but Presidential Decree No. 176 issued in 1973 disallows any foreigner from being a director or officer of an educational institution.

The Philippines Foreign Investment List (which is revised every few years) states the restrictions on foreign ownership but does not provide any information on other restrictions which may apply to your business, such as the number of allowed foreign directors, officers, residency obligations, secondary licenses or the minimum paid-in capital requirements for certain industries.

Obtaining the necessary and correct information to register and run a business in the Philippines is a difficult task and entails inquiring with multiple government agencies with some giving outdated facts.

Anti Dummy Law

To avoid foreign ownership regulations many people try to find schemes to circumvent the Philippines Foreign Investment Act. All these schemes using nominee shareholders (anti-dummy law) or misstating the primary purpose of the business in the articles of incorporation are illegal.

Registering a Business on Your Own – Unless you’re a frequent visitor to Philippine government agencies, there is no way to be sure that the forms you downloaded from their website are current and that application processes and fees haven’t changed. The multiple visits to the SEC and frustrations will make you regret not having hired a Philippine business consultant to guide you and process your documents.

Local Business Permits

Once a business has been licensed to transact business in the Philippines by the SEC, the company must still register with the local municipality where its principal office is located (Mayors’ Permit), BIR, SSS, HDMF and PhilHealth.
The new Unified Registration Record (URR) touted by the SEC as incorporation made easier and faster does not simplify registration with any government entity as a business will still need to go each and every government office to register and process application forms. Only the government will benefit from the URR as they will use it to insure compliance in filings and payments of fees and taxes.

All businesses registered in the Philippines must comply with BIR (Bureau of Internal Revenue) regulations and file monthly, quarterly and annual reports as well as an audited financial statement. Bookkeeping may only be computerized by submitting a special request with the BIR.

Payroll is quite complicated in the Philippines and it’s essential to have an extensive knowledge of taxation and labor laws to correctly compute it.

Starting a Philippine business, contact Dayanan now, to discover how we can remove the annoyances and exasperation of doing business in the Philippines.

Steps in Securing Your Corporation’s Business Permit at the City Hall

Once you’ve obtained your Securities and Exchange Commission (SEC) certificate of incorporation and your barangay permit, the next step in registering your Philippine-based corporation is to get a business permit – also called the mayor’s permit – from city hall.

The process of business permit application tends to vary among localities. In some places, the actual processing time can be as short as one hour, but the queues can be long, especially in January, when all businesses flock to the city hall for their annual permit renewal.

And then, there are localities where the process is more convoluted – but still navigable.

Requirements

The basic documents necessary for business permit application are your

• SEC registration;
• barangay clearance;
• your community tax certificate, which you can get at the city hall; and
• your office lease contract.

Now depending on where your company office is located, you may also be required to present your homeowner’s clearance, business insurance, etc. The city hall will inform you of these additional requirements.

Steps

1. Get an application form at the city hall’s Business Permits and Licensing Office, and fill it out.

2. Submit your application form for the computation of your basic fees and the encoding of your data. The fees are based on your stated business capitalization and size of your office.

Now you will pay the fees, or you may be instructed to visit other offices first and get your required clearances.

Be sure to have your application printout photocopied. If you’ve already paid for something, photocopy the official receipt as well before going to the next step.

3. Make the rounds to secure other necessary clearances. You’ll need to visit

• the engineering office for your certificate of occupancy or building permit,
• the city planning and development council for your location clearance,
• the health center for your sanitary permit, and
• the fire department for your fire safety clearance.

Some of these offices may require additional fees and inspections. They may also issue you a temporary clearance, pending on-site investigation, just so you can finish your registration at the city hall. If that is the case, you will need to secure the actual clearances within 90 days after registration.

5. Submit your papers (clearances, receipts, and application printout) back at the city hall. You will be informed when to return to claim your permit. This could be within the day, but in some cases, it will be after a few days or even a few weeks. Make sure to get a contact number so you can call ahead and confirm that your permit is indeed ready before you return to claim it.

With your business permit (or at least, your official receipt) on hand, you may now proceed to the Bureau of Internal Revenue (BIR) for the last step in your business registration process.

Avoid the hassle of multiple visits and long lines at city hall. Hire Dayanan Business Consultancy to obtain your permits from city hall for you.

Philippines SEC Name Reservation

The first step in registering a business in the Philippines is to reserve a name by either visiting the SEC or through their online reservation system http://iregister.sec.gov.ph/MainServlet.

First time of users of the system will need to signup as a new user. Once you have an account you will be able to verify and reserve proposed company names.

The 8 Steps to Philippines SEC Name Reservation

Step 1. Accept Terms and Conditions

click Accept

Step 2. Select Type of Company

The choices are:

Stock Corporation
Non-stock Corporation
General Partnership
Limited Partnership
Professional Partnership
Foreign Stock
Foreign Non-Stock
Foreign Partnership

Step 3. Select Type of Industry
This list displays the industries that require endorsement from other government agencies. Select the industry listed to classify your company. If your company’s classification does not fall under any of the listed industries, click Continue.

(for industries that do not require endorsement from other government agencies see below)

Select the type of industry listed to classify your company. If the list indicates that there is more than one page, click Next or Last to view the other industries. You may select the page number from the dropdown box and click Go To Page to view your selected industry page. You may enter a keyword in the Search Industry field below and click Search to look-up for industries to match your keyword.

(you may have to drill down the industry by clicking 5 or 6 times to get to the next step)

Step 4. Verify Company Name
Enter your Proposed Company Name at the field provided. Then select the appropriate Company Suffix of your Company Name by clicking on the drop-down box below. The Company Suffix you selected should not be included at the Proposed Company Name you entered. To verify Proposed Company Name, click Continue. To go back to the previous page, click Back.

For a domestic corporation you have the following choices: Inc., Incorporated, Corp., Corporation.

If the system accepts the name you will see the following:

– Checking your proposed name against:
>> Offensive words … PASSED
>> Internationally known foreign corporations … PASSED
>> Registered names … PASSED
>> Reserved names … PASSED
>> Company-owned words … PASSED
>> Restricted words in accordance to existing laws … PASSED

– Proposed Company Name is Available!

Step 5. New User Profile

Provide information for the following Profile details. Click Continue to complete your other Profile details. To return to the previous page, click Back.

Step 6. Reserve Company Name

Select the duration of reservation and method of payment for your company name. Enter the name of the person who is reserving the current company name on the Reserved By field.

SEC Teller or UnionBank Teller payments should be in the form of Cash, Cashier Checks, Manager Checks or Certified Checks.

Funds Transfer payments require you to have a UnionBank account. If you do not have a UnionBank account, open one at the nearest UnionBank branch. To use the funds transfer facility, enroll first by clicking the UnionBank Funds Transfer Enrollment link below. If you are already enrolled, click Continue button to proceed.

A name can be reserved for a maximum of 90 days. Extensions are possible.
The cost is PHP40 per 30 days. It is best to pay the reservation fee at the SEC Teller as the bank API is not always able to update the SEC Name Reservation Database.

Step 7. Review Reservation Summary

Make sure that your Reservation Details are correct. Click Submit to finalize the reservation. If you want to make changes, click Back.

Step 8. Print Reservation Notice

It’s important to keep the original printout as you will have to present it to the SEC.

Notes:

You may also reserve Doing Business As names as they will also need to be indicated in the Articles.

Foreign companies may be required to make three name reservations.

Ex: Head office; name Abcxyz Limited – Abcxyz Limited Manila Branch – Abcxyz Limited under the name Abcxyz Limited Manila Branch.

Business Registration Cost Philippines Corporation

The cost for a business registering a corporation in the Philippines is based on the amount of authorized capital. Depending on the nature of the business and the percentage of foreign ownership there may be a minimum paid-in capital requirement.

Schedule of fees and charges for registration of a new corporation:N

Articles of Incorporation:

SEC fees for the registration of the articles of incorporation are calculated based on the amount of authorized capital. The minimum fees are based on an authorized capital of PHP 400,000.00.

1/5 of 1% of the authorized capital stock or the subscription price of the subscribed capital stock whichever is higher but not less than PHP 1,000.00 .

By-laws: PHP1,010.00

Legal Research Fee (LRF):

1% but not less than PHP10.00 on the Articles of Incorporation and By-laws fees

Application Under Foreign Investments Act (FIA):

PHP3,000.00 required for corporations which have more than 40% foreign ownership.

Stock and Transfer Book:

Purchase and registration PHP470.00

Notarization:

PHP 150.00 per document

Example Business Registration Cost Philippines:

A corporation with an authorized capital of PHP400,000 and more than 40% foreign ownership and one name reserved for 60 days.

Articles of Incorporation	PHP 2,000.00
By-laws	PHP 1,010.00
Foreign Investment Act Application	PHP 3,000.00
Legal Research Fee	PHP 20.00
Stock & Transfer Book	PHP 470.00
Notarial	PHP 900.00
Total	PHP 7,400.00

Updated February 7, 2019

How to Open a Company in the Philippines

There are many options to open a company in the Philippines. Some though can only be used for marketing and export inspection such as a representative office or for regional management RHQ.

We recommend either setting up and registering a branch office or a corporation rather than a partnership or a sole proprietorship. A corporation limits the liability of the shareholders and therefore offers more protection in case of litigation.

How to Open a Company in the Philippines

A branch office of a foreign corporation requires many documents from the home country which must be in English and authenticated by the Philippines Embassy in the country of origin. These documents must be submitted to the SEC with an application form for a license to transact business.

A sole proprietorship must be registered with the Department of Trade and Industry (DTI). It can only be foreign owned, if the business that it will operate is allowed to be 100% foreign owned as per the negative list A and B. Another requirement for foreign ownership is a minimum capitalization of USD200,000. The disadvantage is the full liability of its owner.

Reservation of Business Name

No matter what vehicle you will use to start your business in the Philippines the first step is the reservation of the business name with the SEC or DTI. Even though the SEC will issue a certificate of reservation for your chosen name you will still need to prepare an affidavit of undertaking to change name in the event that another entity has prior right to its use by registration with other government agencies.

Once the your desired name has been reserved the next step is to prepare the articles of incorporation or partnership and bylaws for domestic companies and for foreign owned companies you will need to obtain copies of all documents that show proof of existence in the host country as well as audited financial statements in English and authenticated by the Philippines embassy of the country of origin.

Paid-in Capital

Proof of paid-in capital or inward remittance is needed. A treasurer in trust account or a non-resident account must be opened in a bank located in the Philippines who will issue a bank certificate certifying the amount of funds which have been deposited.

With all the above you are now ready to submit your application for a business license with the Philippines SEC.

Though the corporation code of the Philippines allows a minimal capitalization of PHP5,000 we highly recommend that you start with a at least PHP100,000 or higher. A low paid-in capital will hinder your applications for bank loans or obtaining credit from potential suppliers. Certain kinds of businesses may require a higher paid-in capital than others.

Contact DBC now for a consultation on how to open your company in the Philippines and all other Philippines business registration requirements.

Business Registration in the Philippine

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

Sole Proprietorship

Partnership

Corporation

One Person Corporation

Sole Proprietorship

Partnership

Corporation

One Person Corporation

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.