How to Register a Business in the Philippines

Steps on Setting up a New Business in the Philippines
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Tel: +63 (02) 8551 9012-13
Email: info@tripleiconsulting.com

Philippines is one of the fastest growing markets in the world. With a growing middle class and the 3rd largest English speaking country in the world, the Philippines has placed itself as one of the leading destinations for investment. The set of market dynamics driving growth create an environment where mulit-national companies are expanding their footprint regionally and including Philippines in their expansion. Small and medium entrepreneurs from around the world are setting up businesses to tap into the opportunities existing within the market and from the young labor force. And local businesses continue to increase their product and service lines.

Triple i Consulting is a leader in helping businesses establish and grow a presence in the Philippines. Having assisted more than 500 companies with entering the market since 2007. While the Philippines presents many challenges in setting up a new business, Triple i works together with its clientele to understand the processes and ensure a solid growth plan. Allowing companies to focus on their core business.

Guide on the Steps to Open and Register a Business in the Philippines

Below are the common steps in registering a business in the Philippines. Some business activities may require additional permits or licenses, depending on their nature. For complete information on what are the steps required to legally operate in the Philippines contact Triple i Consulting to schedule a consultation.

1. Choosing a Legal Entity for the Business

Perhaps the most important step in deciding to establish a company in the Philippines. There are many different legal structures that a business may choose, depending on the nature of the business, where it will derive income from, and the future plans of the company can all have major determining factors on the type of structure an organization would choose when setting up. Triple i Consulting’s team of expert consultants can assist clients in choosing the correct entity based on their goals.

Legal Entities in the Philippines:

Sole Proprietorship
Partnerships
One Person Corporation OPC
Domestic Corporation
Representative Office
Branch Office
Regional Headquarters
Regional Operating Headquarters

2. Preparation of Papers for Filing

Once the legal entity is decided preparation for the paperwork for submission can begin. Depending on the structure being used different requirements may be applicable. These may include audited financial statements and corporate documents from the home country or letters of request from the nearest Philippines consulate. In all cases documents will usually need to be authenticated and signed by the new directors or agents. If signed outside of the Philippines, these documents usually need to be consularized at the nearest embassy of the Philippines before they can be used in the Philippines.

Triple i Consulting provides clients with the documents needed for their entity and the steps to acquire these documents. It is important to submit the correct documents on the initial submission to avoid any undue delays during the evaluation process with the respective government agency.

Some of the steps Triple i will take

Name Reservation
Preparation of the Articles of Incorporation
Drafting of Primary Purpose
Foreign Investment Application
Nominee Director Services
Resident Agent Services
Assistance in Document Authentication

3. Opening a Bank Account & Securing an Address

Almost all legal entities require the establishment of a bank account to provide either a place where the paid up capital of the corporation may be placed, or the proof of inward remittance may be sent, depending on the requirement. Due to stricter controls on Anti-Money Laundering the process for setting up a bank account in the Philippines can be cumbersome and difficult to navigate. Triple i Consulting has relationships with several banks that can ease the transitions for our clients into the Philippines banking system.

When submitting applications for registering a new business, one of the main requirements is to have a registered office address. This address must be in the Philippines. If the company has already decided where they will hold office, then they may use this address, however if it is still unknown, then it is possible to use a virtual office and then transfer once registration is complete.

4. Receipt of Any Secondary Clearances

Some business activities may require a secondary license to be obtained or in some cases a provisional approval received before submission to the Securities and Exchange Commission can take place. These include businesses engaged in financial technology which often require approval from the BSP, or companies that plan to apply for a tax incentive. Companies that may also seek certain reductions on paid up capital requirements may also require an approval prior to submission to the SEC.

5. Submission to Securities and Exchange Commission

With all of the documentation prepared, the application can be submitted to the SEC. In some types of entities the submission would be to the Department of Trade and Industry. The application process involves an initial electronic submission, if there are any questions in regards to the company documents or any additional submission requests the examiner will make these through electronic communication.

Once the documents have been evaluated and approved they can be submitted and the filing fees paid. After the filing fee is paid the documents and certificates are routed for printing and signatures.

Finally they will be released from the SEC. The process varies from entity type and time of submission.

6. Registration with Bureau of Internal Revenue

During registration with the SEC the company will receive its Tax Identification Number, however the company must still register with the BIR to activate the number and receive its Certificate of Registration.

The company must also pay the Documentary Stamp Tax on the SEC Registration within the month to avoid any penalties. This is also the time that the newly formed business will request for an authority to print its receipts and invoices, a requirement when conducting business.

7. Registration with Local Government Unit

The next step in legally operating a business in the Philippines is to secure a business permit or mayor’s permit from the Local Government Unit. While the Philippines is a large country with thousands of LGUs, the main requirements between all of them are similar in obtaining a business permit. Although there are certainly some LGUs with more requirements than other.

At this point you must have your office, again a virtual office may be used but some requirements are necessary for it to fulfill the requirement by some cities.

The timeline as well can vary from LGU to LGU with some finishing in days while others may take weeks.

8. Registration with Employment Agencies

If the business will employ any employees either local or foreign, it must register with the local employment agencies for setting up contribution payments. Even if the company will have 0 employees as a trade business or import/export, it must still submit this to these agencies.

These government agencies include the Social Security System (SSS), the Home Development Mutual Fund (Pag-Ibi), Phil-Health, and Department of Labor and Employment.

9. Visa Processing for any Foreign Staff

After the business permit is obtained and the registration is done with the Department of Labor, companies can now apply for work visas for their foreign staff. Depending on which entity was chosen will determine the category of employment visa the company will apply for.

These include:

Special Work Permit
9g Work Visa
47a2 Visa
Special Investor’s Resident Visa

10. Permits and Licenses to Conduct Business

With the business fully registered with the BIR, SEC, and local agencies the company can now register its permits for conducting its operations. The nature of the business will determine what, if any additional licenses may be needed to carry out the operations.

These may include:

License from the BSP
License to Operate for the FDA
Drug Registration
Product Registration with FDA
Customs Importation Permit
Environmental Permits from DENR
License from National Telecommunication Corporation

With the business fully registered with the BIR, SEC, and local agencies the company can now register its permits for conducting its operations. The nature of the business will determine what, if any additional licenses may be needed to carry out the operations.

These may include:

License from the BSP
License to Operate for the FDA
Drug Registration
Product Registration with FDA
Customs Importation Permit
Environmental Permits from DENR
License from National Telecommunication Corporation

11. Ongoing monthly, quarterly and annual compliance

Philippines is a bureaucracy, and while there are many opportunities in running a business in the Philippines, there is also a lot of ongoing compliance.

All licenses and permits in the Philippines require an annual submission, some require monthly and quarterly as well.

Triple i Consulting assists companies to continue to simplify the business landscape in the Philippines while they focus on their core business. Expert business consultants liaise with Triple i’s teams of lawyers and accountants to allow organizations to focus on more important matters.

Tax Incentives for Businesses in the Philippines

For businesses that register in the Philippines, the government has created an excellent plan to encourage investments in the form of tax and non-tax benefits. During business registration, a business either exporting its products and services, or operating a domestic industry listed in the 2019 Investment Priorities Plan could qualify for tax benefits from the Board of Investment (BOI) or the Philippine Economic Zone Authority (PEZA).

Benefits Include:

  • Income tax holiday
  • Duty-free import of capital equipment
  • Reduced wharfage fees
  • VAT exemption
  • Employment of foreign nationals
  • Special investors’ visa

Additional services after Business Registration

  • Fiduciary Services
  • Drafting of company manual and labor contracts
  • Recruitment and executive search services
  • Corporate housekeeping
  • Outsourced accounting, bookkeeping, financial reports and regular tax filing
  • Payroll outsourcing services
  • On-going corporate compliance and legal services

Triple i Consulting is proud to be the first ISO 9001:2008 firm in the Philippines providing company and business registration services. Our expert team of consultants and lawyers can guide businesses through the legal and logistical obstacles when entering the Philippine market, and help them succeed during their business.

Reach out to Triple i to get more information about our incorporation and business registration services.