SEC

US Companies Expanding to the Philippines: Why BIR and SEC Compliance Should Be Your First Priority

Expanding internationally is a strategic milestone for any organization. For many U.S. companies, the Philippines has become one of the most attractive destinations for growth in Southeast Asia.

With its highly skilled English-speaking workforce, competitive labor costs, and strong service sector, the Philippines offers a compelling environment for outsourcing, shared services, tech operations, and regional headquarters.

However, while market entry may look straightforward on paper, regulatory compliance in the Philippines — particularly with the Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue (BIR) — is where many foreign companies face unexpected complexity.

Before hiring employees or generating revenue, your financial and regulatory foundation must be properly structured.

Why US Companies Are Expanding to the Philippines

Several factors continue to drive U.S. expansion into the Philippine market:

  • Access to a skilled and cost-efficient workforce
  • Strong BPO and IT infrastructure
  • Favorable time zone overlap with the United States
  • Growing domestic consumer market
  • Strategic ASEAN positioning

But expansion success depends not only on operational setup — it depends on regulatory compliance.

Understanding the Role of the Philippine SEC for Foreign Companies

The Philippine Securities and Exchange Commission (SEC) regulates corporate registration and business entities in the Philippines.

For U.S. companies expanding to the Philippines, registration with the SEC is mandatory when establishing:

  • A Domestic Corporation (subsidiary)
  • A Branch Office
  • A Representative Office
  • A Regional Headquarters

The SEC is responsible for:

  • Approving your Articles of Incorporation
  • Issuing your Certificate of Registration
  • Regulating corporate governance compliance
  • Monitoring reportorial requirements

Failure to comply with SEC reportorial requirements can result in penalties, suspension, or revocation of registration.

For foreign companies, structuring the correct entity type at the beginning is critical — as it directly affects taxation, liability, and operational flexibility.

The Bureau of Internal Revenue (BIR): Tax Compliance Starts Immediately

Once SEC registration is completed, registration with the Bureau of Internal Revenue (BIR) follows.

The BIR oversees:

  • Taxpayer registration
  • Issuance of Authority to Print official receipts
  • Books of accounts registration
  • Tax identification numbers (TIN)
  • Monthly, quarterly, and annual tax filings

This is where many U.S. companies underestimate the administrative requirements.

Even newly registered entities — including those not yet profitable — may have ongoing filing obligations.

Common BIR Compliance Requirements Include:

  • Registration of manual or computerized books of accounts
  • Monthly VAT or percentage tax filings
  • Withholding tax reporting
  • Annual income tax returns
  • Financial statement submission

Non-compliance may lead to:

  • Financial penalties
  • Accrued interest charges
  • Audit exposure
  • Business permit renewal issues

For U.S. companies unfamiliar with Philippine tax procedures, professional bookkeeping support becomes essential.

Why Outsourced Bookkeeping Is Critical for US Companies Expanding to the Philippines

When entering a new regulatory environment, financial clarity is not optional — it is infrastructure.

Outsourcing bookkeeping in the Philippines provides several strategic advantages:

1. Immediate Local Compliance Expertise

Philippine tax and accounting processes differ significantly from U.S. GAAP reporting systems.

A local outsourced bookkeeping team ensures:

  • Proper transaction recording aligned with BIR standards
  • Accurate tax calculations
  • Timely filing of statutory reports
  • Maintenance of compliant books of accounts

This prevents costly corrections later.

2. Cost-Efficient Market Entry

Hiring in-house finance staff during early expansion increases fixed overhead.

Outsourcing eliminates:

  • Full-time salary commitments
  • Employment benefits and statutory contributions
  • Recruitment and onboarding costs
  • Infrastructure setup

This allows U.S. companies to allocate capital toward revenue-generating activities instead of administrative overhead.

3. Alignment Between US Headquarters and Philippine Operations

One of the biggest challenges for multinational companies is reconciling local statutory reporting with consolidated global reporting.

Professional outsourced bookkeeping ensures:

  • Clean financial records
  • Organized documentation
  • Reporting that can be easily integrated into parent company financial statements

This supports transparency for leadership, investors, and auditors.

4. Reduced Regulatory Risk

BIR audits and SEC compliance checks are part of operating in the Philippines.

Proper bookkeeping ensures:

  • Financial records are audit-ready
  • Required reports are submitted on time
  • Tax computations are properly documented

Risk mitigation begins with accurate records.

Structuring Your Philippine Expansion Correctly from Day One

For US companies expanding to the Philippines, the correct sequence typically includes:

  1. SEC registration of the chosen entity type
  2. BIR registration and tax mapping
  3. Books of accounts registration
  4. Setup of accounting systems
  5. Ongoing bookkeeping and compliance monitoring

Skipping steps or delaying compliance can create operational bottlenecks that slow growth.

Why Dayanan Business Solutions Supports International Companies

At Dayanan Business Solutions, we assist U.S. and international companies entering the Philippine market by providing:

  • SEC registration support
  • BIR registration guidance
  • Outsourced bookkeeping services
  • Ongoing tax and financial compliance management

We understand that foreign-owned entities require:

  • Regulatory clarity
  • Accurate financial reporting
  • Cost-efficient operational support
  • Confidence in local compliance

Our goal is to ensure your Philippine operations are compliant, structured, and financially organized from the beginning.

Frequently Asked Questions (FAQs)

1. What are the first steps for US companies expanding to the Philippines?

The first step for US companies expanding to the Philippines is choosing the appropriate legal structure (subsidiary, branch office, representative office, or regional headquarters). After selecting the entity type, registration must be completed with the Philippine Securities and Exchange Commission (SEC), followed by registration with the Bureau of Internal Revenue (BIR) for tax compliance. Proper bookkeeping systems should also be established immediately to ensure regulatory compliance from day one.

2. Do US companies need to register with both the SEC and BIR?

Yes. Foreign companies must register with the SEC to legally establish their entity in the Philippines. After SEC registration, the company must register with the BIR to obtain a Tax Identification Number (TIN), register books of accounts, and comply with tax filing requirements. Both registrations are mandatory for legal operations.

3. What is the difference between a Philippine subsidiary and a branch office?

A subsidiary is a separate domestic corporation incorporated under Philippine law, even if fully foreign-owned. A branch office, on the other hand, is an extension of the foreign parent company and is not considered a separate legal entity. The choice between the two affects taxation, liability, and capital requirements, making professional guidance essential.

4. What taxes must foreign companies file in the Philippines?

Depending on the structure and business activity, foreign companies may be required to file:

  • Corporate income tax
  • Value-added tax (VAT) or percentage tax
  • Withholding taxes
  • Annual financial statements

Filing obligations often apply even if the company has not yet generated revenue.

5. Is bookkeeping required even if the Philippine entity is not yet profitable?

Yes. Even newly registered companies without active revenue may have ongoing filing and reporting obligations with the BIR and SEC. Proper bookkeeping ensures that all transactions are recorded accurately and that compliance deadlines are met, preventing penalties.

6. Why should US companies outsource bookkeeping when expanding to the Philippines?

Outsourcing bookkeeping provides immediate access to local compliance expertise without the cost of hiring a full-time finance team. It ensures accurate financial records, timely tax filings, reduced risk of penalties, and better alignment between Philippine operations and US headquarters reporting systems.

7. How long does it take to register a foreign-owned company in the Philippines?

The timeline varies depending on the entity type and document readiness, but SEC registration typically takes several weeks. BIR registration follows thereafter. Delays can occur if documentation is incomplete or compliance requirements are misunderstood, which is why professional assistance can streamline the process.

8. Can US companies own 100% of a business in the Philippines?

In many industries, 100% foreign ownership is allowed. However, certain sectors remain restricted under Philippine foreign investment regulations. It is important to verify whether the intended business activity falls under any ownership limitations before registration.



Final Thoughts: Expansion Is Strategic. Compliance Is Foundational.

The Philippines presents tremendous opportunities for U.S. companies seeking operational efficiency and regional growth.

But expansion success depends on more than talent and market strategy.

It depends on:

  • Proper SEC registration
  • Full BIR compliance
  • Accurate bookkeeping systems
  • Ongoing regulatory alignment

If your company is planning to expand to the Philippines, ensure that your financial and regulatory foundation is established correctly from day one.

Because in international expansion, compliance is not an afterthought — it is a competitive advantage.

Dayanan Business Solutions is here to help you navigate through the Philippines Corporate Compliance landscape. Contact us.

Doing Business in the Philippines: Foreign Ownership, Capital Requirements, and Legal Framework

Philippines Foreign Investment Law

A Practical Guide for Foreign Investors

(RA 7042, as amended by RA 8179 and RA 11647)

Introduction

The Philippines continues to pursue a more liberal and competitive foreign investment regime, aligned with regional ASEAN standards. Legislative reforms over the past decades have reduced entry barriers, clarified ownership rules, and strengthened investor protection while maintaining constitutional safeguards.

The legal framework governing foreign investment is primarily anchored on the Foreign Investments Act of 1991 (Republic Act No. 7042), as amended by Republic Act No. 8179 and Republic Act No. 11647. These amendments significantly modernized the law, particularly with respect to capital requirements, market access, and ease of doing business.

Legal Framework: The Foreign Investments Act (RA 7042)

RA 7042 establishes the State policy to attract, promote, and welcome productive foreign investments that contribute to employment generation, technology transfer, and national economic development.

Key Legislative Amendments

🔹 Republic Act No. 8179 (1996)

RA 8179 introduced early liberalization measures, including:

  • Removal of technology-transfer and Filipino employment requirements as conditions for market entry
  • Greater flexibility for foreign-owned enterprises serving the domestic market
  • Simplification of registration and ownership rules

🔹 Republic Act No. 11647 (2022)

RA 11647 represents a major pro-investment reform. Key changes include:

  • Lower minimum paid-up capital requirements for foreign-owned domestic enterprises
  • Expanded powers of Investment Promotion Agencies (IPAs)
  • Enhanced ease-of-doing-business mechanisms to attract SMEs and professional firms

Foreign Ownership Rules and the Negative List

Foreign ownership is governed by the Foreign Investment Negative List (FINL), which identifies sectors subject to restrictions.

List A – Constitutionally or Statutorily Restricted Activities

Foreign equity limitations apply to sectors such as:

  • Mass media
  • Land ownership
  • Exploitation of natural resources
  • Certain public utilities and professions

Foreign ownership is typically capped at 40%, unless otherwise provided by law.

List B – National Interest and SME Protection

These activities are restricted for reasons of national security, public health, or protection of small and medium enterprises.

All sectors not included in the FINL are generally open to up to 100% foreign ownership.

Minimum Paid-Up Capital Requirements (Updated)

One of the most significant changes introduced by RA 11647 is the substantial reduction in minimum paid-up capital thresholds for foreign-owned domestic market enterprises.

Domestic Market Enterprises

A domestic market enterprise is one that sells goods or services primarily within the Philippines.

Minimum Paid-Up Capital:

Ownership StructureMinimum Paid-Up Capital
50-100% Foreign-Owned (Generally)USD 200,000
With advanced technology or endorsed as startupUSD 100,000
Employing at least 15 Filipino employeesUSD 100,000
Businesses engaged in RetailPHP 25,000,000 (and 10,000,000 per store)

Export Enterprises

An export enterprise is defined as one that exports at least 60% of its output.

Minimum Paid-Up Capital:

  • No minimum paid-up capital requirement* but suggested to have a sufficient paid-up capital that is to be used for pre-operating costs, corporate bank accounts, office equipment and etc.
  • May be 100% foreign-owned, subject to sectoral restrictions

This structure is particularly attractive for BPOs, manufacturing exporters, and offshore service providers.

Enterprises Engaged in FINL-Listed Activities

Enterprises operating in restricted or regulated sectors must comply with:

  • Applicable foreign equity caps
  • Industry-specific capital and licensing requirements
  • Constitutional and special law limitations

Capital requirements vary depending on the sector and regulatory agency involved.

Investment Incentives and Registration

Foreign investors may register with:

  • Board of Investments (BOI)
  • Philippine Economic Zone Authority (PEZA)
  • Other Investment Promotion Agencies (IPAs)

Incentives May Include:

  • Income Tax Holidays (ITH)
  • Special Corporate Income Tax (SCIT)
  • Duty-free importation of capital equipment
  • Full repatriation of profits and capital

RA 11647 strengthened coordination among IPAs to improve investor assistance and processing efficiency.

Registration and Compliance Process

Foreign-owned entities are generally required to:

  1. Determine FINL applicability
  2. Confirm ownership and capital eligibility
  3. Register with the Securities and Exchange Commission (SEC)
  4. Secure secondary licenses and local permits
  5. Comply with ongoing reporting and regulatory requirements

Professional advisory support is recommended to ensure proper structuring and regulatory compliance.

Practical Advisory Notes

  • Early structuring is critical — capital and ownership decisions affect future scalability
  • Overlapping laws apply, including the Public Service Act and Retail Trade Liberalization Act
  • Periodic FINL updates may affect long-term business plans
  • Restructuring post-registration can be costly and time-consuming

Frequently Asked Questions

Can foreign investors own land?
No. Land ownership remains constitutionally restricted. Long-term leases are permitted under applicable laws.

Is 100% foreign ownership now easier?
Yes. RA 11647 significantly lowered capital requirements for domestic enterprises not covered by the FINL.

Does RA 11647 override constitutional limits?
No. Constitutional restrictions remain in force.

Is BOI or PEZA registration mandatory?
Registration is optional but required to avail of incentives.

Where can I see the Foreign Investment Negative List?
https://www.dayananconsulting.com/12th-regular-foreign-investment-negative-list-a-b/

Conclusion

The Foreign Investments Act (RA 7042), as amended by RA 8179 and RA 11647, reflects the Philippines’ continued commitment to liberalizing foreign investment while protecting national interests. With reduced capital barriers, clearer ownership rules, and strengthened institutional support, the Philippines presents compelling opportunities for foreign investors — provided that businesses are properly structured and compliant from the outset.

Foreign investment in the Philippines offers significant opportunities—but proper structuring and compliance are critical from the outset. Ownership limitations, capital requirements, and regulatory approvals can materially affect your investment outcomes if not addressed early.

Dayanan Business Solutions assists foreign investors with:

  • Investment structuring and ownership analysis
  • Capital requirement assessment under RA 7042, as amended
  • SEC registration and regulatory compliance
  • BOI and PEZA registration for incentives
  • Ongoing corporate and compliance advisory

If you are considering establishing or expanding a business in the Philippines, speak with our consultants to evaluate your options and ensure full regulatory compliance.

Contact Dayanan Business Solutions today Contact Us to schedule an initial consultation.

Steps in Registering Your Corporation in the Philippines: A Brief Overview

Philippines Business RegistrationOnce you have decided that the Philippines is a good place for setting up business, it’s time to begin the process of registering your corporation.

Here are the steps to registering a corporation in the Philippines:

1. Register your company name with the Philippine Securities and Exchange Commission (SEC) . This is the government agency under whose jurisdiction falls all corporations, associations, and partnerships established in the country.

SEC registration involves at least 5 steps, which begin with the online verification and reservation of the company’s proposed name, and ends with your claiming your SEC license/certificate in person at the SEC office.

2. Get clearance from the barangay hall. A barangay is a Filipino local government unit usually composed of several villages. Several barangays make up a municipality.

To get barangay clearance, go to the barangay hall of the area where you intend to put up your main office. Submit your SEC certificate, site map of your company’s intended location, your approved articles of incorporation and bylaws, and your application form. Then, pay the application fee, and receive your signed barangay certificate that very same day or next day.

3. Secure your municipal permit. Municipal permit application can be complex for two reasons: (1) municipalities vary widely in their requirements, and (2) before you can get your municipal permit, you will need to get supporting certificates from other government agencies outside the municipal hall, like the Bureau of Fire Protection, the municipal health center, etc.

Once you have secured all of your required certificates, bring them back to the municipal hall, pay the fees stated in your application form, then wait a week or two (or more) for your certificates to be ready.

4. Register with the Bureau of Internal Revenue (BIR). The BIR is the last stop in your business registration process. Armed with all the papers and certificates you have so far secured from the SEC, barangay hall, and municipal hall, plus all the other requirements you submitted to be able to secure those permits, go to the BIR revenue district office (RDO) in charge of the area where your business is located.

You may or may not need all the paper you bring with you. Like the municipal halls, RDOs can vary slightly in their requirements for registration.

At the RDO, fill out BIR forms 1903 (Application for Registration for Corporations) and 0605 (payment form for the registration fee).

Submit your application form and all required supporting documents, pay the registration fee and documentary stamps, and you’re done for the day. The BIR will tell you when you should call back to confirm whether your certificate of registration (COR) is ready.

Once your COR has been issued, you have 30 days to have your official receipts and sales invoices printed.

6. Register with the Social Security System (SSS), Home Development Mutual Fund (HDMF), Philippine Health Insurance Company (Philhealth), and the Philippine Department of Labor and Employment (DOLE). Registration with the DOLE becomes mandatory when you have 5 or more employees in your payroll. On the other hand, companies with even just one employee are required to register as employer with the SSS, HDMF, and Philhealth, so that their employee/s may enjoy the benefits of these agencies.

At present, the Philippine government is revising SOPs and putting up infrastructure and to speed up and simplify the system of business registration in the country.

Frustration among registrants is usually caused by the lack of communication from the involved government offices. For instance, it is not uncommon for registrants to discover that the requirements for business permit that are published in a municipality’s website are not complete, and the registrant ends up having to go back and forth to complete the required documents. Many a registrant has also experienced falling in line at a certain window, following instructions indicated by a flowchart posted on the wall, only to find out half an hour later that the flowchart is inaccurate and they are in the wrong queue.

Dayanan Business Solutions Inc. is well versed in the ins and outs of the Philippine business registration process. We’ll be happy to guide you in every step of your company registration in the Philippines. Call us now to learn more about our services.

2014 Filing Dates of Annual Financial Statement SEC Philippines

2014 Audited Financial StatementAll corporations, including branch offices, representative offices, regional headquarters and regional operating headquarters of foreign corporations must file their Annual Financial Statements with the Securities and Exchange Commission depending on the last numerical digit of their SEC registration or license number, as follows:

Filing Dates

Filing DateLast Digit of SEC Registration/License
April 14, 15, 16, 17, 18“1” , “2”
April 21, 22, 23, 24, 25“3” , “4”
April 28, 29, 30, May 2“5” , “6”
May 5, 6, 7, 8, 9“7” , “8”
May 12, 13, 14, 15, 16“9” , “0”

The above filing schedule does not apply to the following:

a) Those whose fiscal years on a date other than December 31, 2013. These entities shall file their AFS within 120 calendar days from the end of their fiscal year;

b) Those whose securities are listed on the Philippines Stock Exchange. These entities shall continue to observe the due date of filing of their AFS as attachment to their Annual Reports;

c) Those whose AFS are currently being audited by the Commission on Audit (COA).

d) Prior to April 14, 2014 all corporation may file their AFS regardless of the last numerical digit of their registration or license number.

The SEC will only accept AFS, other than consolidated financial statements which have been stamped “received” by the Bureau of Internal Revenue or its authorized banks.

Late filings will be accepted starting May 19, 2014 and shall be subject to the prescribed penalties calculated from the last date of the filing schedule.

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:

SEC Name Reservation Philippines

  1. Stock Corporation
  2. Non-stock Corporation
  3. General Partnership
  4. Limited Partnership
  5. Professional Partnership
  6. Foreign Stock
  7. Foreign Non-Stock
  8. 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.

Doing Business in the Philippines

Philippines Business Registration
Ayala Avenue Makati City Central Business District

Dayanan Business Solutions Inc. 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 Amends GIS Requirements

Every business registered with the Philippines SEC is required to submit a General Information Sheet (GIS) every year to the Securities and Exchange Commission.

The amended GIS requirements can be found in SEC Memorandum Circular 10 Series of 2013.

The changes are:

1. Number of copies to be submitted reduced to 4 from 5
2. Tax Identification Number (TIN) for all foreign nationals who are directors/trustees, officers, stockholders/members and resident agents of both domestic and foreign corporations
3. Inclusion of Gender in the page for directors, trustees and officers
4. Inclusion of page I-A pursuant to Anti-Money Laundering Act, as amended

There are four different GIS forms that may be submitted according to the kind of legal entity:

A. Domestic Corporation to be submitted within thirty (30) calendar days from the date of the annual stockholders’ meeting.
B. Non-Stock Corporation to be submitted within thirty (30) calendar days from the date of the annual members’ meeting as stated in the by-laws.
C. Foreign Corporation (Branch Office, Representative Office) to be submitted within thirty (30) calendar days from the anniversary date of the issuance of the sec license
D. Regional Operating Headquarters (ROHQ), Regional Headquarters (RHQ) to be submitted: i.) within thirty (30) days after the issuance of the sec certificate of registration and license and ii.) within thirty (30) days from the anniversary date of the issuance of the sec certificate of registration.

The GIS should also be submitted to the SEC any time there have been changes in shareholders, board of directors/officers, resident agent and contact address of a company,  whether it is a corporation 100% Foreign owned, 60% Filipino owned – 40 % Foreign owned, Branch Office, Representative office.

How to open a business in the Philippines.

 

 

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 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.

 

9th Regular Foreign Investment Negative List A

9th Regular Foreign Investment Negative List A

LIST A: FOREIGN OWNERSHIP IS LIMITED BY MANDATE OF THE CONSTITUTION AND SPECIFIC LAWS

No Foreign Equity

1. Mass Media except recording (Art. XVI, Sec.11 of the Constitution; Presidential Memorandum dated 04 May 1994)

2. Practice of all professions *1 (Art. XII, Sec.14 of the Constitution, Sec. 1 of R.A. 5181)

a) Engineering
i. Aeronautical engineering (P.D. 1570)
ii. Agricultural engineering (R.A. 8559)
iii. Chemical engineering (R.A. 9297)
iv. Civil engineering (R.A. 1582)
v. Electrical engineering (R.A. 7920)
vi. Electronics and Communication engineering (R.A. 9292)
vii. Geodetic engineering (R.A. 8560)
viii. Mechanical engineering (R.A. 8495)
ix. Metallurgical engineering (P.D. 1536)
x. Mining engineering (R.A. 4274)
xi. Naval Architecture and Marine engineering (R.A. 4565)
xii. Sanitary engineering (R.A. 1364)
b) Medicine and Allied Professions
i. Medicine (R.A. 2382 as amended by R.A. 4224)
ii. Medical Technology (R.A. 5527 as amended by R.A. 6318, P.D. 6138, P.D. 498 and P.D. 1534)
iii. Dentistry (R.A. 9484)
iv. Midwifery (R.A. 7392)
v. Nursing (R.A. 9173)
vi. Nutrition and Dietetics (P.D. 1286)
vii. Optometry (R.A. 8050)
viii. Pharmacy (R.A. 5921)
ix. Physical and Occupational Therapy (R.A. 5680)
x. Radiologic and X-ray Technology (R.A. 7431)
xi. Veterinary Medicine (R.A. 9268)
c) Accountancy (R.A. 9298)
d) Architecture (R.A. 9266)
e) Criminology (R.A. 6506)
f) Chemistry (R.A. 754)
g) Customs Brokerage (R.A. 9280)
h) Environmental Planning (P.D. 1308)
i) Forestry (R.A. 6239)
j) Geology (R.A. 4209)
k) Interior Design (R.A. 8534)
l) Landscape Architecture (R.A. 9053)
m) Law (Art. VIII, Sec. 5 of the Constitution; Rule 138, Sec. 2 of the Rules of Court of the Philippines)
n) Librarianship (R.A. 9246)
o) Marine Deck Officers (R.A. 8544)
p) Marine Engine Officers (R.A. 8544)
q) Master Plumbing (R.A. 1378)
r) Sugar Technology (R.A. 5197)
s) Social Work (R.A. 4373)
t) Teaching (R.A. 7836)
u) Agriculture (R.A. 8435)
v) Fisheries (R.A. 8550)
w) Guidance counseling (R.A. 9258)
x) Real estate service (R.A. 9646)
y) Respiratory therapy (R.A. 10024)
z) Psychology (R.A. 10029)

3. Retail trade enterprises with paid-up capital of less than US$2,500,000
(Sec. 5 of R.A. 8762) *2
4. Cooperatives (Ch. III, Art. 26 of R.A. 6938)
5. Private Security Agencies (Sec. 4 of R.A. 5487)
6. Small-scale Mining (Sec. 3 of R.A. 7076)
7. Utilization of Marine Resources in archipelagic waters, territorial sea, and exclusive economic zone as well as small scale utilization of natural resources in rivers, lakes, bays, and lagoons (Art. XII, Sec. 2 of the Constitution)
8. Ownership, operation and management of cockpits (Sec. 5 of P.D. 449)
9. Manufacture, repair, stockpiling and/or distribution of nuclear weapons (Art. II, Sec. 8 of the Constitution) *3
10. Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons and anti-personnel mines (Various treaties to which the Philippines is a signatory and conventions supported by the Philippines) *3
11. Manufacture of firecrackers and other pyrotechnic devices (Sec. 5 of R.A. 7183)

Up to Twenty Percent (20%) Foreign Equity

12. Private radio communications network (R.A. 3846)

Up to Twenty-Five Percent (25%) Foreign Equity

13. Private recruitment, whether for local or overseas employment (Art. 27 of P.D. 442)
14. Contracts for the construction and repair of locally-funded public works (Sec. 1 of CA 541, LOI 630) except:

a) Infrastructure/development projects covered in R.A. 7718; and
b) Projects which are foreign funded or assisted and required to undergo international competitive bidding (Sec. 2a of R.A. 7718)

15. Contracts for the construction of defense related structures (Sec. 1 of CA 541)

Up to Thirty Percent (30%) Foreign Equity

16. Advertising (Art. XVI, Sec. 11 of the Constitution)


Up to Forty Percent (40%) Foreign Equity

17. Exploration, development and utilization of natural resources (Art. XII, Sec. 2 of the Constitution) *4
18. Ownership of private lands (Art. XII, Sec. 7 of the Constitution; Ch. 5, Sec. 22 of CA 141; Sec. 4 of RA 9182)
19. Operation and management of public utilities (Art. XII, Sec. 11 of the Constitution; Sec. 16 of CA 146)
20. Ownership/establishment and administration of educational institutions (Art. XIV, Sec. 4 of the Constitution)
21. Culture, production, milling, processing, trading excepting retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the by-products thereof (Sec. 5 of P.D. 194) *5
22. Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation (Sec. 1 of R.A. 5183)
23. Project Proponent and Facility Operator of a BOT project requiring a public utilities franchise (Art. XII, Sec. 11 of theConstitution; Sec. 2a of R.A. 7718)
24. Operation of deep sea commercial fishing vessels (Sec. 27 of R.A. 8550)
25. Adjustment Companies (Sec. 323 of PD 612 as amended by P.D. 1814)
26. Ownership of condominium units where the common areas in the condominium project are co-owned by the owners of the separate units or owned by a corporation (Sec. 5 of R.A. 4726)

Up to Forty-Nine Percent (49%) Foreign Equity

27. Lending Companies (SEC.6 of R.A. 9474) *6

Up to Sixty Percent (60%) Foreign Equity

28. Financing companies regulated by the Securities and Exchange Commission (SEC) (Sec. 6 of R.A. 5980 as amended by R.A. 8556) *6
29. Investment houses regulated by the SEC (Sec. 5 of P.D. 129 as amended by R.A. 8366) *6 (Sec. 6 of R.A. 5980 as amended by R.A. 8556) *6

*1 This is limited to Filipino citizens save in cases prescribed by law

*2 Full foreign participation is allowed for retail trade enterprises: (a) with paid-up capital of US$2,500,000 or more provided that investments for establishing a store is not less than US$830,000; or (b) specializing in high end or luxury products, provided that the paidup capital per store is not less than US$250,000 (Sec. 5 of R.A. 8762)

*3 Domestic investments are also prohibited (Art. II, Sec. 8 of the Constitution; Conventions/Treaties to which the Philippines is a signatory)

*4 Full foreign participation is allowed through financial or technical assistance agreement with the President (Art. XII, Sec. 2 of the Constitution)

*5 Full foreign participation is allowed provided that within the 30-year period from start of operation, the foreign investor shall divest a minimum of 60 percent of their equity to Filipino citizens (Sec. 5 of P.D. 194; NFA Council Resolution No. 193 s. 1998)

*6 No foreign national may be allowed to own stock in lending companies, financing companies or investment houses unless the country of which he is a national accords the same reciprocal rights to Filipinos (Sec. 6 of RA 9474; Sec. 6 of R.A. 5980 as amended by R.A. 8556; P.D. 129 as amended by R.A. 8366)

Philippines Foreign Investment Negative List B