Our law firm will assist in the planning, creation and finally the registration of the business enterprise with government agencies concerned in the Philippines more particularly the SEC (Securities and Exchange Commission), Local Government Unit (Cebu, Mandaue, Lapu-Lapu and Cebu Province, BIR (Bureau of Internal Revenue), SSS (Social Security System), HDMF (Home Development Mutual Fund) and Phil-Health (Philippine Health Insurance Corporation).
Activities and certain business enterprises are eligible for PEZA and BOI Registration which allows them to avail of investment and fiscal incentives which include income tax holidays and special tax rates on income. Among these activities and enterprises are BPOs, call centers, IT and software companies, or those that are considered export-oriented enterprises.
Foreign investors typically register and start a business in the Philippines through a Domestic corporation or Branch Office. Either entity has advantages and disadvantages. Corporations are more favorable in terms of administrative regulation. Branches may be more advantageous tax wise, but cannot be used if the activities undertaken by the business are included in the Foreign Investment Negative List (FINL) since they are considered completely foreign owned. The FINL prescribes the Philippine equity participation necessary for various businesses restricted from full foreign ownership by law or the Constitution. Corporations are able accommodate the necessary Philippine equity requirements.
Where a business entity exports goods or services and generates revenue from abroad exceeding 60% of its gross sales it may be fully foreign owned and it is exempted from the regular $200,000 inward capital remittance requirement.
These qualified entities are considered Export Enterprises under the Foreign Investments Act. Branches and domestic corporations considered export enterprises can be registered with as little as P5,000 paid up capital. Philippines business however, must open a local bank account and most banks require P25,000 – P50,000 as an opening balance.
The failure of a foreign corporation to obtain a license to do business prevents it from filing suit in Philippine courts. The issuance of a certificate of incorporation from the SEC signifies the commencement of corporate existence and juridical personality for a company.