Frequently Asked Questions
How are the filing fees with the SEC computed?
Filing fee for SEC is 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 P1,000.00
Timeline to incorporate?
The registration process including the opening of a bank account and application with government agencies normally takes 8 – 12 weeks. SEC registration alone can be completed within only 2 weeks.
Do we offer virtual office services?
Yes. Our firm offers virtual office services in Makati and Fort Bonifacio.
Up to what amount of foreign ownership can an individual have?
A non-Philippine national may be allowed up to one hundred percent (100%) ownership if at least 70% of its products or services are exported overseas, also known as Foreign Investment in Export Enterprises, and if its proposed business activities do not fall within the Foreign Investment Negative List (FINL), Section 8, which has been categorized as Lists A and B.
A non-Philippine national may be allowed one hundred percent (100%) ownership of a domestic market enterprise unless foreign ownership is restricted or prohibited by the Foreign Investment Negative List, Section 8 as amended by R.A. 8179.
What are the visa requirements if I become employed by my Philippine corporation? What kind of visa do I get? What about my family?
A foreign national entering the Philippines to engage in a lawful occupation is issued a 9g Work Visa. Dependents of the principal holder include the spouse and dependent’s unmarried children under the age of 21 years. Other visas that may be applicable to the foreign employee depend on the nature of the business of the Philippine corporation. To know more about Philippine visas visit Kittelson & Carpo’s visas services page.
When can we start hiring employees?
Employees may be hired as soon as the enterprise has received its registration certificates from the SEC and BIR.
What are taxes involved if I want to remit profits back to my parent corporation (for Branch Offices)?
A fifteen (15%) percent branch profits remittance tax is applied to profits remitted from the Philippine branch office to its parent company, however, lower tax rates may be provided under the applicable tax treaty. Philippine Branch Offices whose activities are registered under the Philippine Economic Zone Authority (PEZA) are not subject to the branch profit remittance tax.
What is the difference between a representative office and an ROHQ?
A representative office, when compared to an ROHQ is an investment vehicle that only allows representation of an office in the Philippines which limits its activities to deal directly with clients of its head office located in the Philippines, only provide information dissemination about the company’s products / services and quality control.
A Representative office, therefore, is a cost center that should not be fully subsidized by its parent office and may not derive income from the Philippines.
An inward remittance of USD 30,000 must be remitted to the Philippines for operating expenses.
Whilst a ROHQ is allowed to derive income in the Philippines by providing qualifying services to its branches, subsidiaries, or affiliates in the Philippines and other foreign markets.
Qualifying services are as follows:
- General administration and planning
- Business planning and coordination
- Sourcing/procurement of raw materials and components
- Corporate finance advisory services
- Marketing control and sales promotion
- Training and personnel management
- Logistics services
- Research and development services, and product development
- Technical support and maintenance
- Data processing and communication
- Business development
A ROHQ is prohibited from offering its products or services to enterprises other than its branches, subsidiaries or affiliates.
Tax wise, what is the most cost efficient corporate set up?
For services offered only to the enterprises’ branches, subsidiaries or affiliates, ROHQs are taxed 10% of taxable income compared to the 30% tax of Domestic Corporation and resident and non-resident foreign corporations.
Enterprises may avail of tax incentives, depending on their proposed business activity.
What are local government permits and why are they necessary to my registration?
It is necessary to register and obtain a license from the Local Government Unit to legalize your business in the city or municipality where you intend to locate your business.
How often do we need to renew our business or mayor’s permit?
Business permits expire on the 31st of December (unless permits are issued on a quarterly basis) and must be renewed annually. Renewal is every January, depending on the city or municipality where you hold office.
Is there a penalty for delayed renewal of Business Permit?
How do I skirt the USD 200,000.00 minimum paid up capital requirement?
Foreign Investment Exporting Enterprises or enterprises exporting 70% of its products or services overseas do not have to comply with the USD 200,000 paid up capital requirement. A foreign investment exporting enterprises’ minimum paid up capital requirement may be as little as PhP 5,000. Banks may require a higher deposit between PhP 25,000 – 50,000.
What are the yearly reportorial requirements?
Reportorial requirements for entities registered with the SEC with primary license
- General Information Sheet (GIS) – must be certified and sworn to by the Corporate Secretary
- Audited Financial Statement (AFS) – stamped “RECEIVED” by the Bureau of Internal Revenue (BIR)
- Electronic Copy/Diskette of GIS and AFS
Can you give an estimated cost of government fees?
Please click on this link to see the SEC’s government fees or you may visit their website.
What is the purpose of a Corporate Secretary? Requirements to be one?
Corporate officers must be formed when establishing a corporation in the Philippines. They are comprised of the company president, corporate treasurer, and corporate secretary. A corporate secretary must be a resident and citizen of the Philippines. It shall perform the duties, functions, and responsibilities as prescribed by the company’s By-Laws. In addition, the corporate secretary is required to:
- Attend all board meetings, except when justifiable causes occur.
- Inform the members of the board the agenda of their meetings and provide the necessary information that the board may need to arrive at an intelligent decision when their approval is required.
- Drafting the minutes of the meeting of the board and its preservation and safe keeping.
- Ensure all board rules and regulations are strictly followed by the members of the board