Establishing a representative office in the Philippines is an ideal way for international companies to establish a base without commencing full-scale operations. This setup serves primarily as a communication hub, enabling a head office to handle client communications and product inspections within the country.
What is a Representative Office?
A representative office in the Philippines is defined as an branch of a foreign corporation. Unlike a branch office, it does not earn income locally. Instead, all costs must be fully funded by the head office. Because it is not a revenue-generating entity, it is typically exempt from corporate income tax, which makes it a strategic entry point for multinationals.
Capital Needed
To incorporate a representative office, the SEC stipulates a initial capital deposit of US$30,000. This fund is intended to handle the philippines representative office office's startup operating costs. Moreover, the foreign corporation must select a resident agent residing in the Philippines to handle legal summons on its account.
What Can You Do?
Although the range of operations is limited, it offers significant opportunities:
Market Research: Performing market analysis to gauge the Philippine market landscape.
Marketing: Providing information about the parent company's products.
Quality Control: Ensuring that Philippine materials meet the corporate standards.
Communication: Serving as a point of contact between customers and the overseas office.
How to Register
The philippines representative office journey to founding your representative office involves several key phases:
Name Verification: Securing the business name with the SEC.
Paperwork: Preparing authenticated copies of the By-laws and financial statements from the home country.
Funding: Remitting the mandatory USD 30,000 into a local bank account.
Application: Presenting the application form and supporting documents for license issuance.
Licensing: Obtaining Barangay clearance and registering with the BIR.
Final Thoughts
Opting for a Philippines representative office is philippines representative office a prudent decision for enterprises aiming to explore the waters before taking on heavy financial obligations. It allows philippines representative office seamless back-office outsourcing and creates visibility in one of the region's thriving economies. Once the market opportunity is validated, the office can later conversion philippines representative office into a branch for revenue-generating activities.