How to Set Up a Representative Office in the Philippines — Guide 2024
Updated: June 11, 2024
As a foreign entrepreneur seeking to establish a business in the Philippines, you may consider setting up a Representative Office. This comprehensive guide is tailored to your needs, providing all the essential information on the requirements, process, cost, and benefits of registering a representative office in the Philippines.
- What is a Representative Office?
- What Can a Representative Office Do Under Philippine Laws?
- What Are the Registration Requirements For a Representative Office in the Philippines?
- What is the Minimum Capital Requirement of a Representative Office?
- What are the Steps in Registering a Representative Office?
- Frequently Asked Questions
Representative Office in the Philippines
A Representative Office in the Philippines is an extension of a foreign company operating under the home country’s legal framework. This structure serves as a liaison office and is ideal for foreign corporations looking to establish a presence without engaging in income-generating activities in the Philippines.
The parent company covers all operating expenses and is fully liable for the Representative Office. By law, the Representative Office cannot generate income or offer services to third parties. The parent company must remit at least $30,000 annually to cover operational costs.
Allowable Activities of a Representative Office Under Philippine Laws
A Representative Office is permitted to engage only in specific activities under Philippine law, including:
- Marketing, information dissemination, and promotion of company services/products
- Facilitation of client orders from abroad
- Quality control of products for export
- Any other passive acts that support the business activities of the parent company and do not involve the earning of any income
Registration Requirements for a Representative Office
To set up operations in the Philippines through a Representative Office, foreign corporations must obtain a License to Do Business from the Securities and Exchange Commission (SEC). The required documents for this license include:
- SEC Application Form No. F-104 – Application of a Foreign Corporation to Establish a Representative Office in the Philippines
- Notarized and Apostilled certified copy of the Board Resolution from the parent company authorizing the formation of a Representative Office and designating a Philippine resident or foreign nation to receive summons and attend legal proceedings
- Notarized and Apostilled copy of the most recent audited financial statements of the parent company certified by a CPA
- Notarized and Apostilled certified copies of the Articles of Incorporation of the parent company
- Certificate of Bank Deposit or Certificate of Inward Remittance of at least $30,000
- Resident Agent acceptance of appointment (only if the agent is not the signatory of the application form)
- An affidavit stating that the foreign corporation is sound in its financial condition
Note: Documents originating from countries which are not signatories to the Apostille Convention, are required to be authenticated and/or legalized in said countries’ Embassy or Consulate.
Minimum Capital Requirement of a Representative Office
The minimum capital requirement for establishing a Representative Office in the Philippines is set at $30,000 USD. This amount must be remitted annually by the foreign parent company to ensure adequate funding for the office’s operational expenses. The remittance ensures that the Representative Office can sustain its business activities and comply with local regulations without engaging in income-generating activities.
Steps in Registering a Representative Office Office
Registering a representative office in the Philippines entails several essential steps. Below are the key steps that can help you with registering a representative office:
- Appoint a Resident Agent
- Prepare for the Required Documents
- Open a Bank Account where the Required Capital shall be Remitted
- Submit Application to the Securities and Exchange Commission (SEC)
- Register with the Bureau of Internal Revenue (BIR)
- Register with Local Government Units (LGUs)
- Yearly Remittance
- Comply with Reporting Requirements
Let Us Guide You in Establishing a Representative Office in the Philippines
If you want to learn more about setting up a representative office and expanding your business in the Philippines, reach out to us. Our dedicated business consultants are here to assist you.
Frequently Asked Questions
What is the difference between a Representative Office and a Branch Office in the Philippines?
A representative office in the Philippines is established to handle marketing, promotion, and liaison activities for its parent company. While a branch office in the Philippines serves as an extension of the parent company and is allowed to perform business operations, including generating revenue.
Author
What is a Resident Agent?
A Resident Agent is a professional authorized by a company to act on its behalf when setting up a business in a foreign country. The agent’s responsibilities include serving as a signatory and receiving legal notices for the parent company.
Author
What are the allowable activities of a Representative Office in the Philippines?
The allowable activities of a representative office under the Philippine law includes:
- Facilitate orders of clients and customers from head office
- Promote products/services provided by head office
- Quality control of products and goods
- General administrative activities for head office
- Any other passive acts that support the business activities of the parent company and do not involve the earning of any income
Author
What is the Minimum Capital Requirement of a Representative Office in the Philippines?
The minimum capital requirement for establishing a Representative Office in the Philippines is set at $30,000 USD to ensure adequate funding.
Author
Is a representative office required to register their contractors (10-15 pax) to SSS, PHIC and HDMF?
Hi Drew,
Contractors are not required to be enrolled and contribute to SSS, PHIC and HDMF.
If a representative office is set up, but subsequently the parent company does not pay enough US $30,000 per year for the operation of the representative office as required, which may be because the daily operating capital budget of the representative office is less than US $30,000. What adverse effects may this have?
Hi Doreen,
If found out, the SEC may impose penalties on the Representative Office. The penalties may include the revocation of its license.
Are we allow to authorise Rep office staff to accept PO on behalf of head office?
Hi Daryl,
In general, we can grant authorization to the representative of the Representative Office through a resident agent’s certificate.