Setting up a Philippines representative office is an ideal method for global businesses to create a base before commencing direct business. This setup acts primarily as a communication hub, enabling a parent company to coordinate promotional activities and quality control within the archipelago.
What is a Representative Office?
A Philippines representative office is considered an branch of a foreign corporation. Unlike a domestic subsidiary, it is not permitted to earn income locally. Rather, all operating expenses must be completely funded by the head office. Because it is not a revenue-generating entity, it is generally free from corporate income tax, making it a strategic entry point for foreign firms.
Capital Needed
To set up a Philippines representative office, the SEC mandates a initial inward remittance of thirty thousand US dollars. This capital is intended to handle the office's startup operating costs. Moreover, the parent firm must appoint a local representative who lives in the Philippines to accept official notices on its account.
Permitted Activities
Although the scope of activities is limited, it philippines representative office delivers valuable opportunities:
Market Research: Executing feasibility studies to evaluate the local market landscape.
Marketing: Providing details about the parent company's philippines representative office products.
Assurance: Ensuring that locally sourced philippines representative office materials meet the corporate standards.
Communication: Acting as philippines representative office a point of contact between customers and the overseas office.
How to Register
The process to founding your representative office includes several key phases:
Name Verification: Checking the business name with the Securities and Exchange Commission.
Document Preparation: Gathering legalized copies of the Articles of Incorporation and Board Resolutions from the head office.
Capital Remittance: Remitting the mandatory USD 30,000 into a Philippine corporate account.
Application: Submitting the Form F-104 and supporting documents for approval.
Local Permits: Getting Barangay clearance and registering with the Bureau of Internal Revenue.
Why Choose a Representative Office?
Opting for a representative office is a smart move for enterprises aiming to test the waters before committing to heavy financial obligations. It allows seamless administrative outsourcing and creates brand awareness in one of the region's fastest-growing economies. When the market potential is validated, the entity can potentially conversion into a branch for revenue-generating philippines representative office operations.