What Are Regional Headquarters Incentives in the Philippines?

November 13, 2025

As the Philippines strengthens its position as a regional business hub, setting up a regional headquarters (RHQ) or regional operating headquarters (ROHQ) continues to offer global companies a host of operational and fiscal benefits. The Philippine government, in tandem with its Investment Promotion Agencies (IPAs) such as the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA), provides tailored incentives to encourage multinational firms to use the country as a launching pad for their Asia-Pacific or global operations.

Why Incentives Matter for Regional Headquarters

The Philippines uses a robust package of incentives to attract regional hubs, aiming to boost foreign investment, technology transfer, and high-value employment. For multinational companies choosing between several countries for their regional base, these incentives can significantly tilt the balance in the Philippines’ favor, lowering tax burdens, reducing operating costs, and enhancing operational agility.

Understanding the Types of Regional Headquarters

There are two main setups for regional operations for multinational companies:

Regional Headquarters (RHQ)

Designed as a cost center, not allowed to derive income from Philippine sources.
Engages in supervisory, coordinating, and administrative functions for its parent company and affiliates.

Regional Operating Headquarters (ROHQ)

Allowed to generate income from qualifying services rendered to affiliates, subsidiaries, or branches within the region.
Cannot sell goods or provide services directly to domestic Philippine companies.

The distinctions between RHQ and ROHQ play a vital role in determining the incentives and compliance requirements your company will face.

Fiscal Incentives for Regional Headquarters

Traditional Incentives for RHQ and ROHQ

Regional Headquarters (RHQ) receive a wide array of exemptions and perks, including:

Exemption from corporate income tax: RHQs do not pay the regular 25% corporate income tax since they are non-income-generating.
Exemption from most local taxes, fees, and charges (except real property tax on land and equipment).
Exemption from value-added tax (VAT) on local purchases used for their operations.
Tax and duty-free importation of equipment, training materials, and certain motor vehicles (subject to conditions and approval).
Simplified import procedures for certain companies.

Regional Operating Headquarters (ROHQ) have traditionally enjoyed:

Preferential 10% corporate income tax rate (abolished as of the CREATE Act but replaced with new structures—see below).
VAT zero-rating on qualifying intra-group services.
Import tax and duty privileges for equipment and training materials needed for operations.
Exemptions from most local business taxes.

Note: The CREATE Act and 2024’s CREATE MORE Act have restructured these incentives. The standalone 10% income tax for ROHQ has been phased out, and RHQs and ROHQs must pursue incentives via Registered Business Enterprise (RBE) status for qualifying projects or income streams.

Incentives under the CREATE and CREATE MORE Acts

Recent tax reforms introduce important changes:

Income-generating activities for ROHQs now must be registered under a separate RBE to qualify for incentives such as income tax holidays, reduced tax rates, or enhanced deductions.
RHQs remain non-taxable entities for headquarters functions but must clearly delineate these roles from income-generating projects.
New/expanded incentives are only accessible if you register the RBE with an IPA (e.g., PEZA or BOI), focusing on high-value or export-oriented activities.

This dual-entity approach allows organizations to maximize tax advantages for both headquarters support and regional service centers.

Non-Fiscal and Operational Incentives

In addition to direct tax perks, Philippine RHQs and ROHQs benefit from:

Multiple Entry Visas for Expatriates: Fast-tracked visas for foreign executives, their spouses, and dependents.
Preferential tax rates of 15% on salaries for qualified expatriate employees.
Exemption from travel tax for official staff and dependents assigned to the RHQ/ROHQ.
Tax and duty-free importation of household goods and personal effects for relocating executives.
No need to secure an Alien Certificate of Registration for expatriates (except for minimal processing fees).
Simplified regulatory requirements for annual reporting and renewals.

Requirements and Registration to Qualify for Incentives

Securing regional headquarters incentives requires strict documentation and procedural compliance, including:

Preparation of authenticated parent company documents (articles of incorporation, board resolutions).
Minimum investment: USD 50,000 inward remittance for RHQ operations, USD 200,000 for ROHQ startup/investment.
Engagement of a resident agent and establishment of a physical office in the Philippines.
Endorsement from the BOI or relevant IPA for qualifying activities.
Filing of all documents with the Securities and Exchange Commission (SEC).
Annual compliance with inward remittance for operational expenses (RHQ), and separation of income-generating activities (ROHQ/RBE).

Sustaining Incentives: Compliance and Strategic Considerations

Maintain strict segregation between headquarters support services (RHQ) and taxable, revenue-generating ventures (registered as RBE/ROHQ).
Monitor and comply with annual reporting, capital remittance, and regulatory updates from IPAs and the BIR.
Regularly review organizational structures to exploit new incentives or adapt to changes in the Strategic Investment Priority Plan (SIPP).
Consider legal and tax advisory support for structuring, applications, and ongoing compliance.

Additional Tips for Optimizing Regional Headquarters Incentives

Register qualifying service activities as RBEs: This approach can unlock CREATE benefits like tax holidays, special corporate income tax rates, and more, especially if your activities are export-oriented.
Choose the right location: Setting up within PEZA zones or BOI-enabled areas ensures full access to available incentives and infrastructure support.
Leverage expat-related perks: Reduce operational costs by availing streamlined visa processing and special tax treatment for key staff.
Plan for succession: Seamless HQ continuity relies on meeting remittance schedules and maintaining compliance year after year.

Final Insights

The evolving regulatory landscape in the Philippines continues to present numerous opportunities for multinational companies that structure their regional headquarters or operating units wisely. By understanding current fiscal and operational incentives, while ensuring nimble compliance with the CREATE and CREATE MORE Acts, companies can sustain long-term savings, market reach, and regional oversight.

To fully unlock these regional headquarters incentives, organizations are well-advised to work closely with seasoned consultants and local legal experts familiar with the strategic interplay between RHQ, ROHQ, and RBE arrangements.

Is Assistance Available?

Yes. For tailored assistance in structuring, registering, and maximizing incentives for your regional headquarters or regional operating headquarters, partner with our expert consultants to keep your regional base compliant, competitive, and future-ready. Contact us today to get started: