Company Registration
Foreign Companies
If you are a foreign corporation who’s planning to set up an office in Cebu, Philippines, you have come to the right place.
As a foreign company, you can register with the Securities and Exchange Commission. The Foreign Investment Act liberalized the entry of foreign investment into the Philippines. Under the Act, foreign investors are generally treated like their domestic counterparts and must register with the Securities and Exchange Commission.
Domestic Companies
All corporations organized under the Corporation Code of the Philippines shall file with the Securities and Exchange Commission articles of incorporation in any of the official languages duly signed and acknowledged by all of the incorporators substantially containing the matters required by law.
Post Incorporation
Compliance Matters
Immediately after you have received your Certificate of Incorporation or License to
Operate as a Philippines Branch Office or Representative Office from the Philippines SEC the business needs to register with the Bureau of Internal Revenue, obtain Barangay Clearance and Mayor’s permit.
Depending on the structure of your business, your first step is to get a certificate of registration for your business name in one of these agencies:
- Department of Trade and Industry (DTI) – for single proprietorship
- Securities and Exchange Commission (SEC) – for partnerships or corporations
- Cooperative Development Authority (CDA) – for cooperatives
After getting your certificate of registration, you will need to visit the following offices:
- Homeowners Association – for businesses inside villages and subdivisions, you need to get a homeowner’s clearance
- Barangay Hall – secure a barangay clearance to operate your business
- Local Government Unit (LGU) – visit the municipality or city hall office and process your business permit
- Bureau of Internal Revenue (BIR) – apply for a business taxpayer identification number (TIN), register your books of accounts, point-of-sales (POS) machines and receipts
At this point, you may now legally start your business operations, but you’ll need to then register your employees (which may include yourself) to the following agencies:
- Social Security System (SSS) – secure an SSS number for yourself and your employees
- Department of Labor and Employment (DOLE) – for businesses with five workers or more, register your business with DOLE
- Home Development Mutual Fund (HDMF) – as required by RA 7742, SSS members earning at least P4, 000 a month must be registered with HDMF. This agency administers the Pag-Ibig Fund.
- Philippine Health Insurance Corp. (Phil Health) – all employers are required to register their employees to this agency as stated in the New National Health Insurance Act (RA 7875 / RA 9241). Phil Health manages and administers the government health care system.
Corporate Banking
Guide to Opening a Personal Bank Account in Philippines
In opening your Philippine personal bank account, you need to bring the following:
1. Two valid identification cards. These can be your SSS card, GSIS e-card, Passport, Driver’s License, Postal ID, Voter’s ID, PRC ID, OWWA ID, Senior Citizen card, Seaman’s Book, NBI clearance or police clearance (electronic) and Student ID. You need to be sure you take photocopies of these documents to provide the bank for their files.
2. Recent Photo (1x1 or 2x2)
3. A copy of a billing statement of utilities and/or credit card. The bank wants a photocopy of this so they can validate your address.
4. Initial deposit equal to the minimum balance required by the bank
For foreigners, you need to bring the following:
1. Two valid identification cards. These can be your passport, driver's license, company identification card. You need to be sure you take photocopies of these documents to provide the bank for their files.
2. A copy of a billing statement of utilities and/or credit card. The bank wants a photocopy of this so they can validate your address in the Philippines.
3. Alien Certificate of Registration. This is documents which can be obtained
from the office of the Bureau of Immigration nearest your residence.
4. Initial deposit equal to the minimum balance required by the bank.
5. It is also a good idea to take a copy of your Marriage Certificate, if you are married to a Philippine citizen. Some banks also require a copy of that.
Major Banks in the Philippines
Local Banks
§ Banco De Oro (BDO)
§ Bank of the Philippine Islands (BPI)
§ Metrobank
Foreign Banks
§ Citibank,
§ Standard Chartered
§ HSBC
Opening of Philippine Corporate Bank Accounts for Local and Offshore Companies
Requirements for Company, Corporate or Commercial Bank Accounts in most Philippine Banks
- Articles of Incorporation
- Certificate of Registration with the Securities and Exchange Commission
- Corporate By-Laws
- Board Resolution duly notarized incorporating the following:
- Authority to open a bank account with LANDBANK
- List of officers authorized to sign and the nature and extent of such authority
- Notarized List of Officers, Board of Directors, Stockholders
- Two (2) valid identification cards of signatories
Licenses and Permits
After successful incorporation, a business entity must secure the required licenses and permits before the start of their commercial transaction.
Community Tax Certificate
To obtain a Barangay clearance, a company must obtain a community tax certificate. The company is assessed a basic and an additional community tax. The basic community tax rate depends on whether the company legal form is a corporation, partnership, or association (PHP 500 or lower). The additional community tax (not to exceed PHP 10,000.00) depends on the assessed value of real property the company owns in the Philippines at the rate of Php2.00 for every Php5, 000.00 and on its gross receipts, including dividends or earnings, derived from business activities in the Philippines during the preceding year, at the rate of Php2.00 for every Php5, 000.00.
Barangay Clearance
This clearance is obtained from the Barangay where the business is located, and is required to obtain the business permit from the city or municipality. Barangay fees vary for each Barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits set by the Local Government Code and city ordinances.
Mayor’s Permit
To obtain a business permit, the applicant submits a business transaction form (BTF) which contains vital information to process the application.
Business Requiring Special Authority
There are several businesses that will require licenses or permits to operate. Private schools and banks are some examples of businesses that require license or permits by the Philippine authorities.
Educational Institutions
Except upon favorable recommendation of the Ministry of Education and Culture, the Securities and Exchange Commission shall not accept or approve the articles of incorporation and by-laws of any educational institution.
Work Visas
Philippine Visa
A Philippine Visa is an endorsement made on a travel document by a consular officer at a Philippine Embassy or Consulate abroad denoting that the visa application has been properly examined and that the bearer is permitted to proceed to the Philippines and request permission from the Philippine Immigration authorities at the ports of entries to enter the country. The visa thus issued is not a guarantee that the holder will be automatically admitted into the country, because the admission of foreign nationals into the Philippines is a function of the immigration authorities at the port of entry.
Overview of Philippine Work Visa
Before a foreigner may be allowed to work in the Philippines, he must obtain a work permit from the government. However, acquiring a “Pre-Arranged Employment Visa” from the Bureau of Immigration (BI) is not that simple since the applicant must prove that the services he would be rendering is not readily available in the Philippines.
Hence, it is up to the prospective employer to establish, in writing and under oath, that there is no other person in the Philippines, willing and competent enough to perform the services he requires. He must also prove that the foreign employee’s admission to the country will be beneficial to the public interest.
Two types of pre-arranged employment visa
Under the Philippine immigration law, there are two types of pre-arranged employment visa: the “commercial,” and the “missionary” visas.
A “commercial visa” is issued to foreigners applying as: professors and teachers of educational institutions; doctors and nurses of hospitals; scientists, professionals, and other workers in banking, commercial, industrial, agricultural and other business enterprises.
On the other hand, a “missionary visa” is issued to a foreigner who is:
§ A member of a religious denomination that is a bona fide non-profit organization in the Philippines
§ A minister or religious worker of a non-profit denomination
§ Requested by his religious organization to carry out a religious occupation in the Philippines
§ Scheduled to study a fixed curriculum in order to accomplish and undergo proper formation training.
Requirements
It is the prospective local employer who is obligated to file a petition with the Department of Labor and Employment (DOLE) asking its permission to allow the potential foreign employee to render his services in the Philippines. If all the requirements are complied with, the Labor Department then approves the petition and refers the matter to the Bureau of Immigration, who then endorses the documents to the Department of Foreign Affairs (DFA). The DFA then authorizes the Consular Office having jurisdiction over the applicant’s place of residence to issue the appropriate visa.
In order for the working visa to be approved, the petition must state that the local employer exerted all efforts to locate an employee locally, but was unable to find a suitable and competent person who can render the services.
Grounds for employer-employee relation must be present (commercial)
The petition must also show that the potential foreign applicant intends to be a bona fide employee by illustrating that the following circumstances are present:
1. That the employee was selected by the employer, and that his services is being engaged to perform the required work
2. that the employee is to be paid a salary for services to be rendered
3. that the employer can dismiss the foreign employee for justifiable legal ground
4. that employer exercises the power of control over the foreign employee as to the means and methods by which his work is to be accomplished
As long as these four elements are present, there is a presumption that an employer-employee relationship exists. In this case, the pre-arranged employment visa may justifiably be issued by the Philippine government.
The employer’s petition must state the true nature of the services to be rendered by the foreigner, as well as the estimated length of time which the work is to be rendered, and the wages and other forms of compensation which the worker is to receive. It must also state the reasons why the admission of the foreign employer would be beneficial to the public interest.
Missionary visa
In the case of a “missionary visa,” the application must be accompanied by a notarized letter of request from the petitioner-organization together with the details of the applicant’s place of assignment, the certified true copy of the SEC Certificate of Registration, Articles of Incorporation and By-laws of the petitioner-organization.
Aside from the letter of request from the petitioner organization, applicants for a missionary visa must obtain formal letters from their home church to help authenticate the “mission” aspect of the aspirant intending to enter the country via the missionary visa.
Corporate Services
Registered Office Address
§ The registered address can be either a private residential or commercial address
§ Registered address cannot be a PO Box.
Philippine Chartered Secretary
Role of Company Secretary in Philippines
The position of Company Secretary is a very important one as s/he is responsible for providing advice and guidance to the Board on company law and regulations. Given the growing complexity of this area, it is essential that the person responsible is given every opportunity to keep up to date on all relevant matters. The Company Secretary is appointed by the Board and can only be removed by the Board.
Duties of the company secretary include but are not limited to the following:
Statutory duties
§ Ensure, along with the Directors, that the requirements of the Companies Acts are complied with by the company in association with the Directors
§ Co-sign, along with a Director, the annual return and certify along with a Director, copies of documentation to be annexed to the annual return as being a true copy
§ Verify the statement of affairs required where the court has made a winding-up order, or appointed a provisional liquidator or where a receiver has been appointed
Other duties
§ Maintain the statutory books of the company
§ Ensure that statutory forms (including annual returns, director and auditor reports) are filed promptly with the Registrar of Companies
§ Attend meetings of the Board, shareholders and Board Committees and assist with drafting of the agenda, minutes, etc.
§ Counter-sign, along with a Director, the affixing of the company’s seal where authorized by the Directors
§ Act as a confidential sounding board to the Chairperson, Non-Executive Directors and Executive Directors
§ Ensure that the company holds the AGM within the time limits specified
§ Organize and administer Board meetings.
Web Site and Domain
Web Site and Domain Registration
A web site is a must-have tool for marketing and public relations. If your business is an online retail it is all the more important to create an e-commerce site that is most suitable for you products.
We can help you establish a web presence by helping you register a domain name and create a web site.
All in One – Web Design and Hosting
Our experienced team will help you create and design the website that will suit your needs. We will take care of each detail from domain registration to technical support.
Team Expertise
Our team is updated with the most current advances in web design. We can create sites as your business requires. Each web expert is more than capable of achieving their tasks. With our experienced team, our clients are guaranteed competitive and professional services.
Customer Satisfaction
We work for our client’s advantage and satisfaction. Our web team is available to offer web marketing strategies and solutions to enhance your website.
Affordable Rate
We pride ourselves on our ability to provide the quality and accountability you deserve, and at a reasonable cost. We can offer you the best web hosting and web design package at an affordable rate.
Accounting Services
Tax on Goods
What is an Excise Tax?
Excise tax is a tax applicable to certain specified goods or articles manufactured or produced in the Philippines for domestic sale or consumption or for any other disposition, and to things imported into the Philippines.
a. Specific tax - an excise tax imposed on certain goods based on weight or volume capacity or any other physical unit of measurement. It applies to alcohol and alcohol products, tobacco and tobacco products, and petroleum products.
b. Ad valorem tax - an excise tax imposed on certain goods based on selling price or other specified value of the goods. It applies to mineral products, automobiles and non-essential goods.
Philippine Income Tax Rate
Taxable Income
Taxable personal income is all income less allowable deductions and personal exemptions. It includes compensation, business income, capital gains (arising from the sale of real property and share transactions), dividends, interest, rents, royalties, annuities, pensions and a partner's distributive share of the net income of general professional partnerships.
Taxation for Alien Individuals
An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines. Resident aliens are taxed in the same manner as resident citizens on income sourced within the Philippines.
Capital Gains Tax
An individual is subject to capital gains tax on the sale of real property at a rate of 6% of the gross sales price or current fair market value, whichever is higher. An individual is also subject to capital gains tax on the sale of shares not traded on the stock exchange at a rate of 5% of the net gain not exceeding PHP 100,000, and 10% on the excess. Gains derived from the sale of shares listed and traded on the stock exchange are taxed at one-half of 1% of the gross sales price.
Annual Filing Requirements
Tax Filing and payment of tax
Tax returns are due on or before 15 April after the close of the tax year. Tax on compensation income is withheld monthly by the employer either manually or through the Electronic Filing and Payment System on or before the 10th day of the month following the month in which withholding was made for the months of January to November, and on or before 15 January of the following year for the month of December.
Individuals receiving only compensation income from one employer during the taxable year may qualify for substituted filing provided the amount of tax due equals the amount of tax withheld by the employer at the end of the taxable calendar year. In case of married individuals, the same requirements must be met to qualify for substituted filing.
Penalties
Late payments incur a penalty equal to 25% of the amount due. Annual interest of 20% is assessed on the unpaid amount from the due date until fully paid. A compromise penalty will be based on the tax due exclusive of the 25% surcharge and 20% interest.
Corporate Tax
Tax Rate
The corporate income tax rate both for domestic and resident foreign corporations is 30% based on net taxable income. Excluded from the income tax are dividends received from domestic corporations; interest on Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements; and other passive income previously subject to final taxes.
Company tax is payable by domestic companies on all income derived from sources within and without the Philippines. Foreign corporations, whether resident or nonresident, are taxable only on income derived from sources within the Philippines.
However, non-resident foreign corporations are, in certain circumstances, subject to a final withholding tax on passive (investment) incomes at rates generally higher than the applicable tax rates applying to domestic and resident foreign corporations. Resident companies are those that are created or organized under the laws of the Philippines or foreign companies duly licensed to engage in trade or business in the Philippines.
| Tax Type | Rates |
| Corporate Income Taxes | |
| Domestic/Resident Foreign Corporations Regular Income Tax Rate | 30% of net taxable income |
| Non-Resident Corporation Regular Income Tax | 30% of the gross amount of Philippine-source income such as dividend, rents, royalties, compensation, and remuneration for technical services |
| Income Tax Rates as Passive Income of Domestic/Resident Corporation | |
| Dividends received from domestic corporations | Not subject to tax |
| Interest on any currency bank deposit and yield or other monetary benefit from deposit substitutes and from trust fund and similar arrangements | 20% of final tax |
| Interest from foreign currency deposits with foreign currency deposit units (FCDUs) | 7.5% of final tax |
| gains from sale or exchange of shares of stock not listed and traded in the local stock exchange | 5% capital gains tax (CGT) on net gains not exceeding Peso 100,00 and 10% on the excess. |
| Gains from sale or exchange of land or buildings not actually used in business and treated as capital issue | 6% CGT on gross selling price or fair market value, whichever is higher |
| Royalties | 20% final tax |
| | |
Nominee Services
The purpose of using nominee service is to ensure the highest degree of security and confidentiality.
The reasoning behind nominee services is to protect the identity of the client, ensuing discretion and anonymity. The motive of using nominee services is so that the nominee person(s) appears in the corporate documents other than the beneficial owner of the Company. However nominees have no control over the company and are not entitled to manage. A nominee is a person who takes a superficial interest in the Company's business and is basically there to sign documents accepting appointments.
Power of Attorneys can be provided by us authorizing whoever appointed to deal with the day to day running of the business.
Using nominee services is basically a legal way of helping a person keep there identity disclosed, we carefully plan and arrange to ensure full legality but enables you to keep your personal details out of public records. Nominee services include Nominee Director and Nominee Shareholder.
Nominee Director
Why have and what is a Nominee Director?
A nominee director is a person who acts as a non-executive director on the board of directors of a firm, on behalf of another person or firm such as a bank, investor or lender.
The basic function of the nominee director is to shield working executives of limited and other companies from the public disclosure requirements. The essence of a nominee director service is that it is the names of the nominee directors are indicated in the corporate documentation. This means that names of the company's beneficial owners are not disclosed to the Companies Registry, so that clients are ensured the utmost confidentiality.
Nominee Shareholder
Why have and what is a Nominee Shareholder?
The nominee shareholder is the ostensible or registered owner who holds shares of stocks on behalf of the actual owner (beneficial owner) under a custodial agreement.
Each nominee shareholder appointed will sign a declaration of trust to the beneficial owner that they are holding the shares on behalf of the beneficial owner and will return the shares into the name of the beneficial owner or will transfer them to another party as requested.
With our service the nominee is not the legal owner of the shares, and the underlying investors have the "beneficial interest" in the shares: i.e. they are entitled to all income and capital gains on them.
Nominee Agent
Who is a Nominee Agent/Resident Agent?
For foreign companies that are interested in setting up a branch office in the Philippines, you must file with the Securities and Exchange Commission a written power of attorney designating some person who must be a resident of the Philippines, on whom any summons and other legal processes may be served in all actions or other legal proceedings against such corporation, and consenting that service upon such resident agent shall be admitted and held as valid as if served upon the duly authorized officers of the foreign corporation at its home office.
A resident agent may be either an individual residing in the Philippines or a domestic corporation lawfully transacting business in the Philippines: Provided that in the case of an individual, he must be of good moral character and of sound financial standing.
Services & Fees
Company Incorporation Fees
| SERVICES | RATE |
| Philippine Company Incorporation | $ 800 |
| Registered Office Service | $ 500 per year |
| Phone/Fax Service | $ 750 per year |
Foreign Company Registration Services
| SERVICES | RATE |
| Philippine Subsidiary Company Registration | $ 750 |
| Representative Office Registration | $ 1250 |
| Philippine Branch Office | $ 1250 |
Business License Registration
| SERVICES | RATE |
| Mayor’s Permit/Business License | $ 150 |
| Other Licenses | $ 100 |
Accounting Services Fees
Our monthly accounting services are ideal for small-mid-sized companies that are actively doing business in the Philippines and may also have small staff strength.
| SERVICES | RATE |
| Bookkeeping/Accounting | Per month: $ 200 Per year: $ 1250 |
| Payroll Handling | Per month: $ 125 Per quarter: $ 450 Per year: $ 1350 |
| Audited Accounts + Tax Return + Preparation and Filing | Per year: $1000 - 2500 |
| Personal Tax Return Computation and Filing | Per year: $ 1000 - 2500 |
Nominee Services
| SERVICES | RATE |
| Nominee Director | $ 1750 |
| Nominee Shareholder | $ 1750 |
| Nominee Agent + refundable security deposit | $ 1750 |
