Doing Business in the Philippines

Philippines Business Registration
Ayala Avenue Makati City Central Business District

Dayanan Business Consultancy assists individuals and foreign companies of all sizes in setting up their business operations in the Philippines. Doing business in the Philippines has many advantages as well as a large amount red tape.

Once we know your goals and the kind of business you want to launch in the Philippines,  DBC will recommend the best structure for your KPO, Call Center, IT or Web Development Outsourcing, Back Office Operation or Import and Export. DBC will advise you how to register your investment with PEZA or BOI to obtain tax incentives.

Get the Leading Business Process Outsourcing in the Philippines

We will also ensure that you will get the best Business Process Outsourcing in the Philippines. BPO is a cost-saving measure which is a method of subcontracting business-operations to a third party. One category of BPO is outsourcing of back office services, and Dayanan can help you starting from your business registration in the country.

DBC’s knowledge of the Philippine’s business environment and government agencies allows DBC’s clients to reach their objectives quickly. Personalized service is our commitment, whether your intention is to establish a:

Once the SEC has issued your License to Transact or Certificate of Incorporation, DBC will still be there to help get local business permits and licenses and register with other government agencies when necessary.

Other services DBC provides Business Development and Marketing, Business Plans, Visa Processing, Bookkeeping and Payroll.

Your Business Registration in the Philippines will be done quickly and professionally through Dayanan Business Consulting services.

Contact the DBC Team now for a free consultation.

SEC Memorandum Circular NO. 11 Series of 2013

Republic of the Philippines

Department of Finance

Securities and Exchange Commission

SEC Building, EDSA, Greenhills, Mandaluyong City

SEC MEMORANDUM CIRCULAR NO. 11

Series of 2013

 

SUBJECT:    FINANCIAL STATEMENTS TO SUPPORT AN APPLICATION FOR A LICENSE TO TRANSACT BUSINESS IN THE PHILIPPINES

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, as follows:

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

2. 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.

The aforementioned AFS and UFS must be signed under oath by the president or any other person authorized by the corporation. No authentication shall be necessary if the signatory to the said financial statements is the same as that in the corporation’s application.

Pursuant to Section 125 of the Corporation Code, the applicant’s financial statements must show that it is solvent and in sound financial condition.

This Memorandum Circular shall take effect immediately.

6th day of June 2013, Mandaluyong City, Philippines.

 

 

MA. JUANITA E. CUETO

Officer-in-Charge

 

SEC Resolution No. 165 Series of 2012

Republic of the Philippines
Department of Finance
Securities and Exchange Commission
SEC Building, EDSA, Greenhills, Mandaluyong City
Office of the Commision Secretary

1 October 2012

Mr. Ver S. Peralta
ACCRA Law Firm
ACCRALAW Tower
Avenue Corner 30th Street
Cresent Park Bonifacio, Global, Taguig City

Dear Mr. Peralta:
Per your request quoted hereunder is the excerpt from the minutes of the Commission Meeting held on March 22, 2012 which reads, to wit:

“SEC RES. NO. 165, a. of 2012

     RESOLVED, To REVISE the requirements on financial statements that accompany applications of foreign corporations for a license to transact business in the Philippines, as follows:

    For those whose home country requires audited financial statements, unaudited financial statements as of date not exceeding one (1) year immediately prior to the filing of the application provided that: (1) the said financial report is certified correct by the president or any other person authorized by the corporation, signed under oath and authenticated before the Philippine Consulate/Embassy; and (2) there is an undertaking to submit to the Commission its audited financial statements as of the most recent fiscal year end, within 105 calendar days from the date issuance of the license.

For those whose home country does not require audited financial statements, unaudited financial statements as of a date not exceeding one (1) year immediately prior to the filing of the application provided that: (1) there is a Certification from a responsible regulatory institution that corporations operating in their country are not required to prepare and submit audited financial statements, with a citation of the law or regulation on which it is based; (2) the said unaudited financial report is certified correct by the president or any other person authorized by the corporation; and (3) both of the said certifications are signed under oath and authenticated before the Philippine Consulate/Embassy.”

Very truly yours,
C.A. GERARD M. LUKBAN
Commission Secretary

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.

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
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 free consultation on how to open your company in the Philippines and all other Philippines business registration requirements.

Doing Business in the Philippines Made Easy

Dayanan Business Consultancy helps foreign companies get their business up and running in the Philippines.

Besides being known for the hospitality and warmth of its people, the Philippines has a promising culture. A developing country that boasts of fluent English speakers, this country is attracting foreign investors for its industrial competitiveness.

Highlighting how doing business in the Philippines can be advantageous but prone to red tape, Dayanan Business Consultancy or DBC assists individuals and foreign companies of all sizes in setting up their business operations in the Philippines.

Through its website, DayananConsulting.com, DBC guarantees to help customers by preparing business plans and obtaining business permits on their behalf. In addition, DBC can provide services for feasibility studies, business plans and real estate studies and consultancy.

Business Registration Incorporation Philippines SEC

Dayanan Business Consultancy explains that its knowledge of the Philippines’ business environment and government agencies allows its clients to reach objectives quickly. The company commits to personalized service for businesses seeking to establish in the Philippines Foreign Ownership of Corporation, a 100% Foreign Owned Domestic Corporation (subsidiary), Representative Office, Foreign Branch Office, Partnership, Sole Proprietorship or Regional Headquarters.

DBC, as a business consultant in the Philippines, will recommend the best structure for BPO, KPO, Call Center, IT or Web Development Outsourcing, Back Office Operation or Import Export. DayananConsulting.com will also advise businesses on how to register their investments with the Philippine Export Zone Authority or the Board of Investments to obtain tax incentives.

Once the Securities and Exchange Commission has issued a License to Transact or Certificate of Incorporation for a business, DayananConsulting.com will still be there to help get local business permits and licenses and register with other government agencies as may be necessary. Other services that DBC provides include Business Development and Marketing, Business Plans, VISA Processing, Bookkeeping and Payroll. The DBC Team also offers free consultation services.

Benefit from Dayanan Business Consulting services to register and obtain Philippine business permits quickly and professionally. Check out https://www.dayananconsulting.com now and learn how business can start operating in the country in no time.

About: Dayanan business consultancy helps foreign companies get their business up and running in the Philippines. They can help customer obtaining business permits and prepares business plans. In addition, the company can provide services for feasibility studies, business plans and real estate studies and consultancy.

Company Contact Information
DayananConsulting.com
Public Relations
Unit 12C, Valero Towers 122 Valero St. Salcedo Village, Makati, Philippines
1227
Phone : +639178125014

Representative Office Registration

Philippines Representative Office

The process for obtaining a license to transact business from the Philippines SEC to operate a Foreign Company Representative Office in the Philippines is similar to that of the Foreign Company Branch Office.

The required annual minimal inward remittance of funds for a Foreign Representative Office as working capital is US$ 30,000.00 as opposed to a one time minimum remittance of US$200,000.00 of a Foreign Branch Office as mandated by the SEC regulations. Every year the parent company must remit at least US$ 30,000.00 to cover operating expenses.

A Representative Office of a foreign corporation may not derive income from its operations in the Philippines. All of its operating costs must be covered by transfer of funds from the parent company.  Usual activities allowed are dealing with the clients of the parent company, dissemination of information, promotion of company products and quality control of products for export. It is forbidden to offer services to 3rd parties.

A Representative Office does not pay income taxes as none of its income is derived from the Philippines and is not qualified to apply for tax incentives with the BOI or PEZA authorities.

Dayanan Philippines Business Consultants will assist you with the setup and registration of your business with the relevant government agencies for a quick opening of a representative office in Philippines.

Philippines Representative Office Requirements

1 – Application Form

2 – Name Verification Slip (A name search will be done at the SEC to determine if the corporate name has any similarity with an existing corporation already registered with the SEC).

3 – Certified copy of the Board Resolution authorizing the establishment of an office in the Philippines; designating the resident agent to whom summons and other legal processes may be served in behalf of the foreign corporation; and stipulating that in the abscence of such or upon cessation of its business in the Philippines, any summons of legal process may be served to SEC as if the same is made upon the corporation at its home office

4 – Audited Financial Statements as of date not exceeding one year immediately prior to the filing of the application certified by an Independent Certified Public Accountant of the home country and authenticated before the Philippines Consulate/Embassy

5 – Certified copies of the Articles of Incorporation/By-laws/Partnership
with an English translation thereof if in a foreign language (not English)

6 – Proof of Inward Remittance such as a bank certificate of inward remittance in the amount of US$30,000.00

7 – Resident Agent’s acceptance of appointment 9not necessary if agent is the signatory in the application form)

All foreign documents must be authenticated by the Philippines Embassy/Consulate of the home country.

Once the SEC has issued a license to operate, the representative office is required to obtain Philippines local business permits and register with the Bureau of Internal Revenue. The representative office may now apply for work permits and visas for its foreign employees.