Business RegistrationHow to Establish a Representative or Branch Office for Foreign Companies

Expanding a business into the Philippines offers foreign companies access to a growing economy, a young English-speaking workforce, and a strategic Southeast Asian location. However, to directly expand a foreign company into the Philippines, you must have a registered physical address and establish a Representative or a Branch Office. Below, we’ll examine the distinctions between the two types of offices, their requirements, and the process for registering with the Securities and Exchange Commission (SEC).

Legal Requirements for Foreign Companies

Foreign companies must comply with regulations set by the Securities and Exchange Commission (SEC) and other government agencies under the Foreign Investments Act of 1991 (Republic Act No. 7042, as amended). This law allows 100% foreign ownership for representative and branch offices, subject to specific conditions.

• A representative office, which conducts non-income-generating activities like market research or product promotion, requires a minimum inward remittance of USD 30,000 annually to cover operating expenses. 
• A branch office, which can engage in revenue-generating activities, must remit a minimum paid-up capital of USD 200,000, though this may be lower depending on the business’s sector. 

Before your office can legally operate inside the Philippines, you must register with the SEC and obtain permits such as a barangay clearance, Mayor’s Permit, and Bureau of Internal Revenue (BIR) registrations.

Alternative: Form a Domestic Corporation or Establish an RHQ

Alternatively, a foreign company may expand by establishing a Domestic Corporation in the Philippines, which operates as a separate legal entity. Depending on the business activity, a Domestic Corporation can be 100% foreign-owned if the sector is open to full foreign equity, or up to 40% foreign-owned in restricted industries under the Foreign Investment Negative List (FINL). This approach allows foreign investors to run a Philippine-registered company without creating a Representative or Branch Office, while still complying with local laws. 

The key consideration when choosing between establishing an office or a domestic corporation is:

• Representative or Branch Office: Choose this if you want to operate in the Philippines directly as an extension of your foreign parent company.
• Domestic Corporation: Choose this if you prefer to create a separate Philippine-registered entity, either fully or partially foreign-owned, to conduct business locally.

Another way to directly expand to the Philippines is to establish a Regional Headquarters (RHQ). This setup allows a foreign company to coordinate and manage operations across the region, support multiple subsidiaries, and hire more foreign staff under BOI approval. Unlike a Representative or Branch Office, an RHQ is a more specialized option focused on regional management rather than local operations.

If your goal is to operate as a direct extension of your parent company, without using the more specialized RHQ, you will typically need a Representative or Branch Office.

Representative vs Branch Offices

A Representative Office serves as a liaison for the parent company, focusing on non-commercial activities such as:

• Market Research: Investigating market trends, consumer preferences, and competitive landscapes to inform business strategies.
• Product Promotion: Marketing activities to boost brand visibility, support local distributors, or prepare for commercial operations.
• Client Coordination: Managing relationships and communication with clients to ensure smooth business interactions and satisfaction.

It cannot generate revenue, sign contracts, or engage in direct sales, making it ideal for companies exploring the market or maintaining a limited presence.

A Branch Office in the Philippines can perform all activities of a Representative Office and is also authorized to conduct income-generating activities, like:

• Sales: Engaging in the promotion and distribution of products to customers in the Philippines.
• Services: Providing professional or technical support, expertise, or assistance to clients.
• Manufacturing: Producing goods locally by processing raw materials into finished products.

The choice depends on your goals. Choose a Representative Office for low-risk market entry or a Branch Office for active revenue generation.

Documents Needed for Office Registration

The documentation requirements for both office types are similar, but with different application forms and required capital. 

Requirements for Representative Office

• Application Form for Representative Office (SEC Form F-104)
• Name verification slip
• Authenticated copy of the parent company’s Board Resolution approving the establishment
• Articles of Incorporation or equivalent from the parent company’s home country
• Financial statements of the parent company for the latest fiscal year
• Proof of inward remittance of at least USD 30,000
• Organizational chart and details of the parent company’s operations
• Registration Data Sheet
• Notarized Resident Agent Acceptance Form (if applicable)
• Affidavit executed by the Resident Agent stating that the applicant is solvent and in sound financial condition (for Representative office and non-stock corporations)

Requirements for Branch Office

• Application Form for Branch Office (SEC Form F-103)
• Name verification slip
• Authenticated copy of the parent company’s Board Resolution approving the establishment
• Articles of Incorporation or equivalent from the parent company’s home country
• Financial statements of the parent company for the latest fiscal year
• Proof of inward remittance of at least USD 200,000 (or lower, depending on your sector)
• Organizational chart and details of the parent company’s operations
• Registration Data Sheet
• Notarized Resident Agent Acceptance Form (if applicable)
• Affidavit executed by the Resident Agent stating that the applicant is solvent and in sound financial condition (for Representative office and non-stock corporations)

All foreign documents must be authenticated by the Philippine Embassy or Consulate in the parent company’s home country.

You can contact Business Registration Philippines for professional assistance in preparing your documents, ensuring they are complete, accurate, and fully compliant.

Step-by-Step Process to Register Your Office

1. Choose Your Office Type: Decide whether a representative or branch office aligns with your business objectives.
2. Appoint a Resident Agent: Designate a Filipino citizen or domestic corporation as your resident agent for legal processes.
3. Secure a Business Name: Verify and reserve your business name via the SEC’s online portal.
4. Prepare Documentation: Gather all required documents, ensuring foreign documents are authenticated and translated if needed.
5. Submit Application to SEC: File Form F-103 (branch) or F-104 (representative office) with supporting documents and fees.
6. Remit Capital: Deposit the required capital (USD 30,000 for representative offices or USD 200,000 for branch offices) into a Philippine bank account.
7. Obtain Additional Permits: After SEC approval, secure a Barangay Clearance, Mayor’s Permit, and BIR registration.
8. Register with Other Agencies: Depending on operations, register with agencies like the BSP, DTI, or Social Security System (SSS).
9. Set Up Operations: Once all permits are secured, finalize your office lease, hire staff, and begin operations.

The process typically takes 4–8 weeks, depending on document completeness and the SEC’s workload. We can manage your application, streamlining the process while avoiding unnecessary delays.

Final Thoughts

Establishing a representative or branch office is your first step towards accessing the Philippines’ growing economy, cost-effective English-proficient workforce, and strategic Southeast Asian location. Decide on the office type that best fits your company’s needs, prepare the necessary documents, and register with the SEC. Remember that you must also register with agencies such as the BIR and the appropriate LGUs before your office can legally operate in the Philippines. 

Is this Your First Time Registering an Office in the Philippines?

Setting up your business in the Philippines can be a complex and challenging process. With numerous licenses and permits required from different government agencies, it’s easy to miss a document or forget a renewal deadline. Unfortunately, this can lead to costly fines or even force your operations to shut down.

Thankfully, the Business Registration Philippines team provides comprehensive support for your business registration, so you don’t have to stress over the paperwork. 

Contact us today to schedule an initial consultation with one of our experts:

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• Call us at +63 (02) 8540-9623