Following last years visit of the French president François Hollande to the Philippines and the recent talks between Secretary of Trade and Industry Ramon Lopez and the French Ambassador to the Philippines Thierry Mathou, a new plan to deepen the ties and boost the trade between both countries is on going.

Education, tourism, renewable energy and infra-structure are some of the key areas with high potentials.  Furthermore, due to stalling french economy, more french companies are willing to invest in the Philippines.

Despite the drop in the bilateral trade in 2015, France remains the second largest trading partner among European Union member states, according to the Philippines-France Business Council (PFBC).

With a tax treaty agreement in place since 1978 and revised in 1998, here are the 3 business structures that  French or foreign companies should consider when registering their business in the Philippines.

1. Subsidiary

A subsidiary is a corporation existing under the Philippine laws which can be either Filipino or foreign owned.  Since it has a a distinct juridical personality from its parent company, the liability to its creditors is limited to the shareholdings in this corporation.

A board of at least 5 directors, a company secretary, a present and a treasurer must be appointed prior to the incorporation.

2. Branch Office 

A branch is an extension of a foreign existing business but may engage in exactly the same activities as its parent company. Since it is a just an extension of its parent corporation, the branch does not have a separate personality and the liabilities extend to the assets of the parent company.

3. Representative Office

Also fully owned by the parent company, the main different between a branch a representative office is that the latter cannot generate income. It is purely a cost center and the best legal structure for companies looking to disseminate information, promote products and to provide customer support.

If you wish to know more about the benefits of setting up a company in the Philippines, please consult our team of consultants and lawyers who will guide you and advise you on the best business setup to register your business.

If you are looking to invest in the Philippines and to set up a company, do not hesitate to contact one of our business consultants to have a market overview and a detailed legal and tax analysis. With +300 companies registered in the Philippines, we advise some of the most influential businesses and institutions in the country.