Establishing a representative office in the Philippines is an effective method for international companies to create a local presence before commencing full-scale trading activities. This setup serves primarily as a support hub, enabling a parent company to handle client communications and quality control within the region.
The Nature of the Entity
A Philippines representative office is considered an branch of a foreign corporation. Unlike a domestic subsidiary, it cannot derive revenue locally. Rather, all costs must be completely funded by the head office. Since it is not a revenue-generating unit, it is usually exempt from corporate income tax, which makes it a cost-effective option for multinationals.
Capital Needed
To set up a representative office, the Securities and Exchange Commission stipulates a initial inward remittance of thirty thousand US dollars. This amount is meant to cover the entity's initial expenses. In philippines representative office addition, the parent firm must appoint a resident agent residing in the Philippines to accept legal summons on the company's behalf.
Scope of Operations
While the range of operations is limited, it delivers significant philippines representative office advantages:
Market Research: Performing market analysis to gauge the Philippine market landscape.
Marketing: Sharing information about the head office's products.
Inspection: Verifying philippines representative office that locally sourced materials meet the corporate standards.
Communication: Acting as a point philippines representative office of contact between customers and the overseas headquarters.
How to Register
The process to establishing your Philippines representative office requires several key steps:
Company Name: Reserving the business name with the SEC.
Document Preparation: Preparing apostilled versions of the Articles of philippines representative office Incorporation and Board Resolutions from the head office.
Funding: Remitting the required USD 30,000 into a local corporate account.
Filing: Presenting the application form and supporting documents for license issuance.
Bureaucracy: Obtaining Barangay clearance and filing with the Bureau of Internal Revenue.
Why Choose a Representative Office?
Selecting a Philippines representative office is a strategic decision for enterprises planning to explore the market without taking on complex financial obligations. It permits seamless administrative outsourcing and creates brand awareness in one of the region's fastest-growing markets. Once the business opportunity is proven, the office can potentially conversion into a branch for commercial activities.