Philippines company registration

Philippines company registration


Since 2003, Healy Consultants Group PLC has assisted our Clients with business registration in the Philippines. Our services include i) Philippines company formation services ii) government license registration iii) corporate bank account opening services in the Philippines and abroad iv) employee recruitment v) visa strategies and vi) office rental solutions.

Philippines business setup summary

  1. Philippines is the 4th largest market in the ASEAN region and the 5th most competitive market within ASEAN in 2015. Incorporating a local company is recommended for Clients who are looking to increase their sales in ASEAN;
  2. A joint stock corporation is the most commonly used business entity in company formation in Philippines. For more information on the different business entities in Philippines click on this page;
  3. Foreign companies are obligated to appoint a Board of Directors for joint stock corporations, which must comprise of at least 5 members of which at least 3 of the members must be Filipino. As such, Healy Consultants do provide a passive nominal resident director/shareholder service to our Clients;
  4. The minimum paid up capital for a foreign company in Philippines is US$200,000, and may increase up to US$2.5 million in certain industries. Hence it is necessary to open a corporate bank account in Philippines before proceeding with registering a company;
  5. Philippines has quality English-speaking labour market, with a relatively low annual salary averaging at US$5,000 for manufacturing staff and US$7,500 for non-manufacturing staff. Our team can assist our Client with local staff recruitment in Philippines if needed.
SummaryJSCNominee fast solutionRegional or Area HQRegional operating HQBranch companyRepresentative office
Best use of company?Trading and manufacturingFast business setupSupervision & coordinationOperating companyTrading and manufacturingMarketing and research
Legally tax exempt if properly structured?NoNoYesNoNoYes
Corporate bank account location?CitibankCitibankStandard CharteredANZPNBBDO
Client must travel to Asia?NoNoNoNoNoNo
Can secure trade finance?YesYesYesYesYesNo
Limited liability entity?LimitedLimitedLimitedLimitedUnlimitedUnlimited
VAT payable on sales to local customers12%12%None12%12%None
Withholding tax on payments to shareholders?30%30%15%15%15%15%
Average total engagement costs?US$16,050US$26,310US$15,150US$20,510US$20,510US$15,150
Average total engagement period?12 weeks12 weeks10 weeks10 weeks10 weeks10 weeks
Accounting and tax considerationsJSCNominee fast solutionRegional or Area HQRegional operating HQBranch companyRepresentative office
Statutory corporation tax payable?30%30%0%10%30%0%
Must file an annual Philippines tax return?YesYesYesYesYesYes
Effective corporation tax rate on net profits of US$250,00030%30%0%10%30%0%
Must file annual financial statements?YesYesYesYesYesYes
Investment income is tax exempt in Philippines?NoNoNoNoNoNo
Access to double taxation treaties?YesYesYesYesYesNo
Monthly VAT reporting to the Government?YesYesYesYesYesYes
Legally tax exempt entity?NoNoYesNoNoYes
Dividends received are legally tax exempt?NoNoNoNoNoNo
Company registrationJSCNominee fast solutionRegional or Area HQRegional operating HQBranch companyRepresentative office
Resident director\partner\manager required?YesYesYesYesYesYes
Minimum number of shareholders\partners?5511Parent companyParent company
Minimum number of directors\managers?551111
Minimum paid up share capital?US$200,000US$200,000US$50,000US$200,000US$200,000US$30,000
Shelf companies available?YesYesNoNoNoNo
Time to incorporate a new entity?8 weeks8 weeks6 weeks6 weeks6 weeks6 weeks
Can easily convert to a local PLC company?YesNoNoNoNoNo
Can have preference shareholders?YesYesYesYesNoNo
Business considerationsJSCNominee fast solutionRegional or Area HQRegional operating HQBranch companyRepresentative office
Can invoice local customers?YesYesNoNoYesNo
Can hire local staff?YesYesYesYesYesYes
Can rent local office space?YesYesYesYesYesYes
Secures a residence visa for business owner?YesYesYesYesYesYes
Good entity for trademark registration?YesYesYesYesYesYes
Other useful informationJSCNominee fast solutionRegional or Area HQRegional operating HQBranch companyRepresentative office

Average monthly office rental? (US$ per sq. m)15-35
Minimum statutory monthly salary?US$10
Average monthly US$ salary for local employee?300
PHP deposit interest rate (1 year average)0.50%-1.75%
US$ deposit interest rate? (1 year average)0.50%-1.75%
Overseas remittance currency controls?No
Public register of shareholders and directors?Yes

Banking considerationsJSCNominee fast solutionRegional or Area HQRegional operating HQBranch companyRepresentative office
Multi-currency bank accounts available?YesYesYesYesYesYes
Corporate visa debit cards available?YesYesYesYesYesYes
Quality of e-banking platform?ExcellentExcellentExcellentExcellentExcellentExcellent

Benefits and problems of registering a company in Philippines

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  • Benefits and problems

    Benefits of Philippines company registration

    Philippines business registration services

    1. Foreigners can register a company in the Philippines without travelling and with a minimum of i) five corporate or individual shareholders ii) five individual directors, half of whom must be resident in the Philippines and iii) a paid-up capital of US$200,000, which is reduced to US$100,000 if the company hires more than fifty employees;
    2. Philippines is a promising frontier market for worldwide entrepreneurs because:
      • The Filipino market is the third largest of Southeast Asia by its size of US$345 billion, after Indonesia (US$1,000 billion) and Thailand (US$430 billion). It also benefits from the second largest population of the region (106 million inhabitants), expected to increase by another 6 million by 2020 according to the International Monetary Fund;
      • Along with Vietnam, the Philippines’ economic growth should attain around 6.2% per year, the highest pace amongst major ASEAN economies. This will translate in numerous investment opportunities for businessmen setting up businesses in this country;
      • Over the past years, the economy of the Philippines has significantly strengthened and the economy is now much less vulnerable than it used to be, as demonstrated by the fact that the country’s sovereign debt benefits since 2015 from an investment grade rating by both Moody’s, Fitch and Standard and Poor’s.
    3. Philippines is also a great place to form an export oriented service company because:
      • Salaries in the Philippines are low. Foreign companies are usually able to find quality employees by providing annual salaries below US$5,000 per year, according to the Japanese External Trade Organization;
      • Most Philippine workers who graduated from high school are able to converse in English, making the country a great place for the relocation of call and BPO centers;
      • Philippines is also a great place for expat workers: due to its former status as a United States colony and US base during the Vietnam war, the country has an important expat community, with restaurants, bars catering for a Western expatriate population;
      • The Philippine Government also offers tax incentives for foreign investment projects including i) corporate tax holidays and ii) reduced/waived custom duties on imported equipment and raw materials. Eligible projects include: i) medical tourism centers ii) hospitality projects for the retirement tourism industry and iii) IT businesses. See this page for further details on the list of eligible projects and incentives available;
      • Office space and utilities and infrastructure costs are low. Our readers can find more statistics on a range of costs on this page prepared by the Philippines Government.

    Problems with Philippines company registration

    1. Starting business in the Philippines is challenging because:
      • The Philippines laws do not provide for a limited liability company. Foreigners willing to do business in the Philippines are consequently required to use one of the following strategies: i) register a branch, which subject their overseas business to unlimited liability against their operations in the Philippines or ii) register a joint stock corporation, which require the appointment of at least three resident directors;
      • Our Clients registering a subsidiary instead of a branch are also required to offer at least one share of the company to each of the three resident director. While this has no impact on the ownership of the company, this makes it impossible to wholly foreign-own a company in the Philippines;
      • Minimum paid-up capital for foreign invested companies is at least US$200,000. In industries subject to foreign investment restrictions including i) retail trade ii) agriculture and iii) advertising, such paid up capital requirement can increase to up to US$2.5 million and may go along an obligation to form a joint venture with a majority joint venture partner of Filipino nationality;
      • Philippines company formation follows lengthy procedures, requiring the approval of licenses by several Ministries and by the municipality of the place where the company will conduct operations;
      • For all the reasons listed above, Philippines is currently ranked as the 20th most difficult place in the world to start a business by the World Bank.
    2. Doing business in the Philippines is challenging also because:
      • Philippines is a developing country where the population lives with an income per capital below US$3,000 per year. One quarter of the population lives below the poverty level and less than one inhabitant out of two lives in a city;
      • Philippines is an archipelago of more than 7,300 islands. However, the maritime infrastructure of the country is generally poor and tends to be ridden with red tape, especially when the products are imported;
      • While educated workers in the cities tend to speak good English, most of the population is only able to speak the local language Tagalog;
      • Mindanao, the southernmost island of the Philippines, is still subject to an insurgency fomented by Islamist movements in favor of the formation of an independent State.
  • Best uses for a Philippines company

    1. Philippines is mostly popular for the formation of export oriented services businesses, such as call centers and BPOs. The English fluency of the local workforce and its adequate level of training are strong assets for such type of businesses;
    2. Philippines is also a good place for the formation of an agroforestry business, thanks to the natural endowments of the Archipelago and the availability of a low cost workforce.

Frequently asked questions

Contact us

For additional information on our company registration services in Philippines, please email us at Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi