Regional Headquarters (RHQ) and Regional Operating Headquarters (ROHQ)

Companies registered as Regional Headquarters (RHQ) and Regional Operating Headquarters (ROHQs) are entitled to special tax incentive programs for foreign investors, with Republic Act No. 8756 providing the terms and conditions and licensing requirements for RHQ and ROHQ setups.

One of the best incentives given to the RHQ and ROHQ is the ability to process Special Non-Immigrant Visas for foreign staff. Using a special relationship with the BOI, visas may be processed in as little as 3 days without the need of an Alien Employment Permit, greatly reducing the amount of time the staff needs to spend dealing with the Bureau of Immigration. Foreign and local staff (in management or technical positions) also enjoys 15% reduced income tax.

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Qualifications

RHQ

• It does not derive income from sources within the Philippines and does not participate in any manner in the management of any subsidiary or branch office it might have in the Philippines.
• Required capital of US$50,000.00 annually to cover operating expenses.

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ROHQ

• May derive income from sources within the Philippines.
• Required capital of US$200,000.00 one time remittance.

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Incentives

Expatriates

• Multiple Entry Visa
– Expatriates, including spouse and unmarried children below 21 years old are entitled to this type of visa
– Valid for 3 years, extendible for another 3 years
– Exempt from payment of fees except reasonable administrative costs
– Non-immigrant visa will be processed within 72 hours from submission of documents to the Bureau of Immigration
– Exempt from securing Alien Certificate of Registration
• Withholding tax of 15% on compensation income applicable to both foreign and Filipino executives holding managerial and technical positions
• Tax and duty free importation of used household goods and personal effects
• Travel tax exemption for Personnel and their dependents

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RHQ

• Exemption from Corporate Income Tax but shall file an Annual Information Return
• Exemption from Value Added Tax and Sale or lease of goods and property, and rendition of services to RHQ shall also be exempted
• Exemption from all kinds of local taxes, fees or charges
• Tax and duty-free importation
-Equipment and training materials not locally available
-Equipment disposed within 2 years after importation subject to payment of taxes and duties
• Importation of Brand New Motor Vehicles subject to payment of taxes and duties

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ROHQ

• Subject to 10% taxable income (Corporate Income Tax)
• Subject to 10% Value Added Tax
• Exemption from all kinds of local taxes, fees or charges
• Tax and duty-free importation of equipment and materials for training and conferences
• Equipment and training materials not locally available
• Equipment disposed within 2 years after importation subject to payment of taxes and duties
• Importation of Brand New Motor Vehicles subject to payment of taxes and duties


Procedure:

After RHQ or ROHQ registration with SEC, coordinate with BOI to avail of investment incentives.


References:
• Department of Trade and Industry, Philippines. “Incentives for Investors”. http://www.dti.gov.ph/uploads/DownloadableForms/Incentives.pdf (accessed June 21, 2014).
• Department of Trade and Industry, Philippines. “General Procedures and Application Requrements”. http://www.dti.gov.ph/uploads/DownloadableForms/procedures%20&%20application%20requirements.pdf (accessed June 21, 2014).

Metro Manila Head Office

Address: 12F Sagittarius Building,
111, H.V. Dela Costa Street Salcedo Village, Makati City 1227
Tel: +63 (02) 5519012
+63 905 313 0064
Fax: +63 2 551 8052
Email: info@tripleiconsulting.com