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R E L AT E D PA G E S

Philippines Subsidiary
Reading Time: 3 minutes

If you’ve decided to expand to the Philippines, congratulations! It’s an exciting time in

the life of your company, but this time also comes with some important
responsibilities. You have to learn and understand all of the Philippines’ subsidiary
laws and determine how to set up a Philippines subsidiary while staying compliant.
The process can take months before you’re even ready to hire employees.

Globalization Partners can change how you operate in the Philippines through our
Employer of Record model. This form of Philippines subsidiary outsourcing will allow
you to get started immediately, as we can hire employees on your behalf, handle
payroll, and ensure that you’re always in compliance.

How to Set up a Subsidiary in the Philippines

Before you start the Philippines subsidiary setup process, you need to consider
certain factors that could impact where you base your business and what type of
entity you choose to incorporate.
First, think about the type of business you operate and within what industry, any
existing trade agreements or relationships you want to honor, and the nationality of
your employees. Then, consider local practices that could make a difference in how
your company operates. You should analyze everything from the English level to the
importance of group membership before making a decision on where to incorporate.

You have different options for what type of entity you choose to incorporate as — a
corporation, branch of ce, regional headquarters/regional operating headquarters
(RHQ/ROHQ), or foreign partnership. The process to set up a subsidiary changes
depending on what type of structure you choose. To incorporate as a corporation in
the Philippines, you must:

• Verify and reserve your company name with the Securities and Exchange Commission
(SEC)
• Deposit your paid-in minimum capital at the bank

• Notarize your treasurer’s af davit and articles of incorporation at the notary

• Get your pre-registered Taxpayer Identi cation Number (TIN) after registering your
company with the SEC

• Get your barangay clearance

• Go to the City Treasurer’s Of ce (CTO) to get your community tax certi cate (CTC)
and pay your annual community tax

• Obtain a business permit to operate from the BPLO

• Buy special books of account at a bookstore in the Philippines

• And much more

The entire process typically takes 29 days and costs about PHP 7,630. If you choose
to set up this type of Philippines subsidiary, you should budget the time and money
necessary to complete the process.

Philippines Subsidiary Laws

Philippines subsidiary laws tend to be complex and vary based on what type of
entity you choose. For a corporation, a foreign investor can establish a wholly owned
domestic corporation in the country. However, the foreign investor needs to set up a
domestic corporation with a quali ed joint venture partner from the Philippines if the
company’s activity is subject to foreign equity limitations.

If you choose to set up a subsidiary alone instead of opting for Philippines subsidiary
outsourcing services, you should hire a lawyer or consultant who understands the
country’s laws. You can also train an employee to learn the regulations from front to
back, but it will take away from that employee’s typical work.

Bene ts of Utilizing a Subsidiary

The bene ts of establishing a subsidiary are clear — you can start working in a new
country. However, this process is lengthy and can take even longer if you’re not clear
on the Philippines’ subsidiary laws. Globalization Partners can make the process
easier through Philippines subsidiary outsourcing.

As a global PEO, we ensure that you won’t have to establish a subsidiary when you
work with us. We’ll help you hire top talent, run payroll, and source the best bene ts
for your company. Our biggest goal is to take the stress of an expansion off of you so
that you can instead focus on running your company.

What Do You Need for the Philippines Subsidiary Setup

Process?

You’ll need to budget a signi cant amount of time and money to fully complete the
subsidiary setup process. Try to set aside the time to y back and forth to the
Philippines to le paperwork, sign documents, and hire employees. You should also
work with your nance team to prepare for the nancial implications of expanding
and make sure you have all the money ready to set up your Philippines subsidiary.

Outsource With Globalization Partners

If you’re ready to open a subsidiary in the Philippines, choose Philippines subsidiary

outsourcing with Globalization Partners. Contact us today to learn more.
 

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This material has been prepared for informational purposes only, and is
not intended to provide, nor should you rely on it for, legal, tax, or
accounting advice in any jurisdiction. You should consult your own
legal, tax, and accounting advisors as part of your expansion plans.