by: Austin Shi
Registering a company in the Philippines can be a complicated and tedious process, even when equipped with the right information. However, a company can overcome these initial difficulties easily, if the correct procedure is followed accordingly, and if the necessary assistance is procured. This article will tackle the basics of registering a company in the Philippines, as well as registering for tax incentives with government agencies like PEZA and BOI. Furthermore, we will also look at the general business registration procedures that a company undergoes in incorporating a business in the Philippines, and discuss the best way to go about them. This article should not be taken as a comprehensive guide to Philippine business registration, as it only presents a general overview of the entire process.
Before registering a company in the Philippines, one must first determine the appropriate investment vehicle in starting up your business. This can be a fully foreign-owned branch office, a fully foreign-owned domestic corporation, a fully foreign-owned representative office, or a 60/40 subsidiary. Your company must also be registered with all the relevant government agencies, including the Philippines Securities and Exchange Commission (SEC), the Department of Trade and Industry (DTI), and the Bureau of Internal Revenue (BIR).
Moreover, special tax holidays and regimes are also available to companies that register and incorporate their businesses in the Philippines. However, companies must first comply with a set of government-issued requirements to become eligible for these benefits, which may range from tax holidays of up to 4 years to exemptions on the importation of capital equipment. The general procedure for registering a company in the Philippines is listed below:
Registering a Company in the Philippines
To register a company in the Philippines, one must:
- Determine the availability of a company name with the Philippines Securities and Exchange Commission (SEC)
- Reserve and Register the chosen company name with the SEC
- Deposit a paid-up capital of not less than Php 5,000 to any Authorized Agent Bank (AAB)
- Obtain the Certificate of Deposit from the Authorized Agent Bank (AAB)
- Notarize the company’s articles of incorporation and treasurer’s affidavit
- Register the company with the Philippines Securities and Exchange Commission (SEC).
- Obtain a Community Tax Certificate from the City Treasurer’s Office (CTC).
- Obtain a Barangay Clearance
- Obtain a License to Operate at the Licensing Section of the City Mayor’s Office
- Register for taxes at the Bureau of Internal Revenue (BIR)
- Register the company’s Books of Account and for Authority to Print Official Receipts and Sales Invoices
- Register with the Philippines Social Security System (SSS) and the Philippine Health Insurance Company (PhilHealth)
- Complete registration with the Philippines Home Development Mutual Fund (HDMF)
Says Business Consultant Gregory Kittelson of Philippines Consulting Firm Kittelson & Carpo Consulting, “Registering a company in the Philippines is a complicated and time-consuming process. That is why many foreign companies setting up operations here in Metro-Manila choose to hire companies to assist them in the business registration process, instead of going about it themselves. My experience has shown that registering a business here in the Philippines can easily become problematic and frustrating, especially to those who are unfamiliar with the process to begin with.”