With its strategic location, English-speaking workforce, and business-friendly environment, the Philippines is a popular choice for regional headquarters. However, before setting up, businesses must understand the two available structures: Regional Headquarters (RHQ) and Regional Operating Headquarters (ROHQ). Each has its own scope, limitations, and benefits.
Below, we’ll explain the differences, requirements, and registration processes so you can determine which option best fits your business goals.
Who Needs a Regional Headquarters (RHQ or ROHQ)
A Regional Headquarters is best suited for multinational corporations that want to centralize their management, coordination, and support functions in Asia without directly engaging in local trade. There are two primary types:
Companies with established subsidiaries or affiliates across the region often benefit from an RHQ or ROHQ, since they provide a cost-efficient hub for strategic planning, training, and business development. Industries such as manufacturing, logistics, technology, pharmaceuticals, and finance commonly set up these regional hubs to ensure consistent oversight and streamlined communication among their regional offices.
If you wish to expand to the Philippines while directly selling to local Filipinos, you’ll want to establish a Domestic or Foreign Corporation instead.
What is a Regional Headquarters (non-operating, known as an RHQ)
A Regional Headquarters (RHQ) acts as an administrative branch of a foreign company. Its primary purpose is supervising, coordinating, and communicating with subsidiaries, branches, and affiliates within the Asia-Pacific region.
Key characteristics of an RHQ:
- It does not earn income in the Philippines.
- Activities are limited to support functions such as planning, business development, training, logistics, and regional coordination.
- The RHQ is fully subsidized by its parent company abroad.
This setup is ideal for companies that want to manage regional operations from the Philippines without directly engaging in profit-generating activities.
What Is a Regional Operating Headquarters (ROHQ)?
A Regional Operating Headquarters (ROHQ), on the other hand, can earn income by providing services to its affiliates, branches, or subsidiaries around the region.
Typical ROHQ functions include:
- General administration and planning
- Technical support and communications
- Data processing and IT support
- Marketing control and sales promotion
- Training and personnel management
- Financial advisory and business development
Unlike an RHQ, an ROHQ can charge fees for these services, making it a profit-generating entity while focusing only on serving related companies abroad. However, remember that an R OHQ still cannot directly sell to consumers in the Philippines.
Key Differences Between RHQ and ROHQ
While RHQs and ROHQs are similar in structure, they differ in scope and purpose:
| Aspect | RHQ | ROHQ |
|---|---|---|
| Income-generating? | No | Yes |
| Funding | Entirely from the parent company | May charge affiliates/branches for services |
| Activities allowed | Administrative, coordination, training | Administrative + technical, marketing, sales support, IT, financial services |
| Target clients | Only the parent company’s affiliates/branches | Only the parent company’s affiliates/branches |
| Best for | Companies needing a central hub for oversight | Companies that want to provide shared services and generate income |
Which Option Is Right for Your Business?
The decision largely depends on your operational needs:
- Choose an RHQ if your main goal is to set up a management and coordination hub in Asia without generating revenue locally. This is common for corporations that already have revenue-generating subsidiaries in other countries.
- Choose an ROHQ if you plan to establish a shared services center that provides IT, marketing, or financial support to your affiliates while charging them for services. This option is popular among BPO, IT, and financial services companies.
Documentary Requirements to Establish an RHQ or ROHQ
To register either type of regional headquarters, companies must prepare and submit the following documents to the Philippine Securities and Exchange Commission (SEC):
- Application Form from the SEC’s eSPARC online portal.
- Certification by the Philippine Consulate/Embassy or the Philippine Commercial Office or from the equivalent office of the Philippine Department of Trade and Industry (DTI) in the company’s country of origin verifying that said foreign corporation is engaged in international trade with subsidiaries, branches or affiliates in the Asia-Pacific (APAC) region and other foreign markets; and in case the equivalent of the DTI issues the certification, the same shall be authenticated by the Philippine Consulate/Embassy.
- Certification from the Principal Officer of the foreign corporation verifying that it is authorized by its Board of Directors or governing body to establish an RHQ in the Philippines.
- Proof of inward remittance
- USD 50,000 for RHQ (annual remittance for operational expenses)
- USD 200,000 for ROHQ (initial investment plus annual funding)
- Registration Data Sheet
- Endorsement or clearance from appropriate government agencies (if applicable);
- Endorsement from the Board of Investments (BOI); and
- Latest authenticated financial statements showing the solvency of the head office.
These documents must be properly notarized and authenticated (usually through the Philippine Embassy/Consulate in the parent company’s home country).
How to Establish an RHQ or ROHQ in the Philippines
Registering an RHQ in the Philippines generally takes a few months. Here is what you should expect:
- Prepare the Required Documents
Secure the documentary requirements we listed above. Ensure they are properly notarized and authenticated by the appropriate authority. - Remit the Minimum Capital
This is a requirement and proof of commitment to fund the RHQ or ROHQ. - Secure BOI Endorsement
Before you can proceed with registration, an endorsement from the Board of Investments (BOI) is necessary. - Register with the SEC
Once your documents and BOI endorsement are ready, you can apply to the Securities and Exchange Commission (SEC). - Set Up a Registered Office
You must have a physical office address in the Philippines to serve as the official location of your RHQ. You may be asked to provide supporting documents, such as a lease agreement. - Processing Timeline
After submission, the review and approval process usually takes a few months, depending on the completeness of your documents and the workload of the relevant agencies.
Remember to register with the BIR, LGUs, and any other government agencies relevant to your industry and business activities.
Triple i Consulting can help you prepare the necessary documents and register your RHQ or ROHQ. Our team will streamline the process, minimize delays, and ensure you secure all the legal requirements to operate smoothly in the Philippines.
Final Thoughts
Establishing an RHQ or ROHQ provides your company with a strategic hub to manage subsidiaries and affiliates across Southeast Asia. While an RHQ offers a streamlined option for management and coordination, an ROHQ provides a path for shared services and income generation. Contact Triple i Consulting if you have questions regarding RHQ and ROHQ documentary requirements, registration process, and compliance with SEC regulations.
Are You Registering an RHQ or ROHQ in the Philippines?
Setting up a regional headquarters in the Philippines involves strict compliance and business registration with multiple government agencies. It’s easy to make a mistake or miss a step, which can lead to penalties or delays in your operations.
That’s where Triple i Consulting comes in. Our team of experienced lawyers and accountants provides comprehensive support for your business, so you don’t have to stress over the paperwork.
Contact us today to schedule an initial consultation with one of our experts:
- Fill out the form below
- Call us at: +63 (02) 8540-9623
- Send an email to: info@tripleiconsulting.com
