Setting up a representative office in the Philippines is an ideal method for foreign corporations to build a base before engaging in full-scale business. This legal structure serves mainly as a support hub, enabling a parent company to handle client communications and quality control within the country.
What is a Representative Office?
A Philippines representative office is viewed as an extension of a overseas entity. Unlike a branch office, it does not generate profit locally. Rather, all costs must be fully funded by the head office. Since it is not a revenue-generating unit, it is typically exempt from local income taxes, making it a strategic entry point for foreign firms.
Key Requirements and Capitalization
To incorporate a Philippines representative office, the SEC requires a initial inward remittance of US$30,000. This fund is meant to handle the office's startup operating costs. Furthermore, the parent firm must designate a philippines representative office local representative who lives in the country to accept official notices on the company's behalf.
What Can You Do?
Although the philippines representative office scope of operations is limited, it offers important benefits:
Surveys: Executing feasibility studies philippines representative office to gauge the Philippine market landscape.
Marketing: Providing philippines representative office information about the head office's services.
Quality Control: Monitoring that Philippine goods meet the global specifications.
Customer Liaison: Acting as a bridge between customers and the overseas office.
How to Register
The journey to establishing your representative office involves several essential phases:
Name Verification: Reserving the business name with the Securities and Exchange Commission.
Document Preparation: Compiling apostilled versions of the Articles of Incorporation and Board Resolutions from the head office.
Bank Deposit: Remitting the required $30,000 into a Philippine corporate account.
Application: Submitting the application form and attachments for license issuance.
Licensing: Obtaining Barangay clearance and registering with the BIR.
Final Thoughts
Opting for a Philippines representative office is a prudent decision for enterprises looking to test the waters without committing to complex tax burdens. It philippines representative office permits efficient administrative support and creates visibility in one of Southeast Asia's fastest-growing economies. Once the market potential is validated, the office can later conversion into a full corporation for commercial operations.