Opening a representative office in the Philippines is an effective method for global businesses to build a base before commencing commercial trading activities. This setup acts mainly as a liaison hub, allowing a head office to manage promotional activities and quality control across the country.
Understanding the Basics
A representative office in the Philippines is viewed as an extension of a overseas entity. In contrast to a branch office, it does not earn income from Philippine sources. Instead, all operating expenses must be completely subsidized by the parent company abroad. Because it does not function as a revenue-generating unit, it is usually exempt from local income taxes, making it a strategic entry point for foreign firms.
Registration Requirements
To register a representative office, the Securities and Exchange Commission stipulates a minimum capital deposit of US$30,000. This fund is meant to handle the office's startup operating costs. Moreover, the foreign corporation must select a resident agent residing in the Philippines to accept legal summons on the company's behalf.
What Can You philippines representative office Do?
While the range of operations is limited, it delivers significant opportunities:
Market Research: Performing feasibility studies to gauge the Philippine market landscape.
Advertising: Sharing information about the head office's products.
Inspection: Ensuring that locally sourced materials meet the corporate standards.
Communication: Acting as a point of contact between philippines representative office customers and the overseas headquarters.
How to Register
The journey to establishing your representative office involves multiple key steps:
Name Verification: Checking philippines representative office the corporate name with the SEC.
Documentation: Gathering apostilled versions of the By-laws philippines representative office and Board Resolutions from the home country.
Bank philippines representative office Deposit: Remitting the required $30,000 into a Philippine corporate account.
SEC Submission: Filing the Form F-104 and attachments for license issuance.
Local Permits: Securing Mayor's permits and filing with the Bureau of Internal Revenue.
Benefits of This Structure
Choosing a representative office is a smart move for businesses planning to test the market before committing to complex tax burdens. It permits efficient administrative support and establishes brand awareness in one of Southeast Asia's fastest-growing economies. When the business opportunity is validated, the entity can potentially transition into a branch for commercial operations.