Some of our clients prefer to have their own corporate entity in the Philippines. We assist those clients in setting up and managing entities in the Philippines. All of our services are overseen by licensed attorneys and accountants. On this page we evaluate the steps and approximate costs for your consideration.
There are a few different types of entities in the Philippines which leads to some confusion. We list they main 3 types below. This incorporation is generally overseen by the Philippines Securities Exchange Commission (SEC).
A domestic corporation in the Philippines must have at least 5 shareholders, and all of the shareholders can be foreigners in certain circumstances. A domestic corporation is required to submit annual tax documents, and is taxed as a local corporation.
A branch office is a wholly owned subsidiary of an overseas corporation. Branch Office does not have a juridical personality separate and distinct from its parent company. Thus the parent company (overseas) will be responsible for its liabilities.
A representative office is a wholly owned subsidiary of an overseas corporation. Under Philippines law it has no shares in the Philippines. It has a local representative that must be a Philippines national, and Brealant can act at this representative for you.
Fees: We charge a flat "ALL-IN" fee of 79,000PHP to setup all three of the above types of entities. This includes all government fees, as well as registration with all the necessary local entities to get your operating license. Generally this registration time period takes about 30 days, however, it can take longer. The 79,000PHP promotion price includes registration in Bonifacio Global City (BGC). Please contact us for detailed fees if your office is located in a different location (as local fees can differ).
The Philippines has two more options that can be added to Domestic Corporation and Branch office (both discussed above). These are two powerful and important options that are often confused and mixed up. Each of these options carry additional costs and considerations.
PEZA refers to the Philippine Economic Zone Authority. There are other economic zones such as Clark Freeport Zone, Cagayan Economic Zone Authority, etc. A domestic corporation or a branch office can apply for a tax waiver from these export promotion zones to save on VAT. PEZA registration is a time consuming process and can add 6-12 months of additional time to the company formation. Normally 5 employees in the Philippines are required and minimum registered capital is 1,000,000PHP.
We charge a flat fee of 120,000PHP to facilitate PEZA registration, which is in addition to the above 79,000PHP.
BOI waiver that allows a entity to waive the restriction on the % of revenue that may be derived from sales in the Philippines. Only a business that plans to sell products or services locally in the Philippines (such as McDonalds or Starbucks for example) need to consider this option.
We charge an additional 10,000PHP to process this waiver. There are also an additional 50,000PHP in stamp duty, as the entity's registered capital is higher (resulting in additional stamp duty).
Brealant can provide your company with local shareholders, Directors, Resident Agent, Secretary, and/or Treasurer.
Please contact us for pricing for these options.
Here we will describe a few examples of incorporation to give you an idea of the costs in major cases. Of course your case may differ, but these three options cover the majority of incorporations.
This is the most popular option, as the cost to setup is zero. Yes, exactly $0. Others use this option as an interim solution while their corporation is being setup (as corporate setup takes time.)
Scope: Entity supports a company in the United States providing phone answering, accounting, and website development to the head office. It does not sell anything in the Philippines. Staff about 50 employees in the Philippines.
Solution: We form a branch office which is a wholly owned subsidiary. We elect PEZA to get the tax benefits. We do not elect BOI.
Timeframe & Costs: 89,000PHP for entity setup and 120,000 for PEZA election. Total fee to Brealant is 209,000PHP and takes about 12 months to setup. Registered capital is 1,000,000PHP.
Scope: Entity is a company in the Philippines providing IT services to overseas and also sells about 20% of services in the Philippines (measured by % of revenue). They are a startup and do not have enough capital to elect PEZA or BOI.
Solution: We form a domestic company.
Timeframe & Costs: 89,000PHP for entity setup. Registered capital is 100,000PHP.
Brealant Inc provides accounting, audit, and compliance services to our company registration clients.
Our fees for these services are tailored to client needs and start at about 7999PHP per month for small entities with few monthly entries.
If you form a domestic corporation you are required to file monthly reports of sales as well as annual audited financial statements.
Various statutory and secretarial compliance tasks are required of all companies that are registered with the SEC.
PEZA, CEZA, Clark, and other export incentive programs have frequent compliance requirements (often monthly) to notify the Philippines government that you are meeting your stated goals relating to export of sales or services. This includes frequent on site inspections.
Every company has unique needs and it is best to give you advice based upon exactly what you plan to do. Please contact us for more details.