A foreign corporation that intends to regularly transact business in the Philippines — rather than make a single isolated transaction — must secure a license to do business from the Securities and Exchange Commission (SEC). This is a prerequisite to opening bank accounts, signing leases, and enforcing contracts in Philippine courts.
The four main structures for licensed foreign corporations
Branch Office
A branch office is an extension of the foreign parent — not a separate Philippine legal entity. It can earn Philippine-source revenue and is subject to Philippine corporate income tax on that income.
- Assigned capital: Minimum USD 200,000 inward remittance (reducible to USD 100,000 with DOST-certified advanced technology or employment of at least 15 Filipino workers)
- Taxation: 25% corporate income tax on Philippine-source income; branch profit remittance tax applies on profits sent to the head office
- Best for: Foreign companies that want a Philippine revenue-generating presence but prefer to keep operations within the parent’s legal structure
Representative Office
A representative office cannot earn income in the Philippines. It exists purely to support the head office — market research, product promotion, quality control, customer liaison. All operating expenses are funded by remittances from the head office.
- Minimum annual remittance: USD 30,000 from the head office
- No local income: representative offices that earn Philippine revenue are non-compliant
- Best for: Market entry, relationship-building, and support functions before committing to a revenue-generating structure
Regional Headquarters (RHQ)
An RHQ coordinates the activities of a multinational’s regional subsidiaries and affiliates but does not earn income in the Philippines.
- Minimum annual operating expense remittance: USD 50,000
- No local income
- Tax treatment: Exempt from income tax and VAT on qualifying activities
Regional Operating Headquarters (ROHQ)
An ROHQ can earn income — but only from qualifying services provided to its affiliates, subsidiaries, or branches outside the Philippines (in foreign currency).
- Minimum initial capital remittance: USD 200,000
- Qualifying services: General administration, business planning, R&D, logistics, marketing support, and other approved functions
- Tax: Preferential 10% income tax on taxable income (confirm current rate)
Common requirements for all licensed foreign corporations
All four structures require the SEC to:
- Issue a license to do business
- Receive proof of the foreign corporation’s existence and good standing in its home jurisdiction (apostilled or consularised)
- Record a resident agent — a Philippine resident individual or domestic corporation that receives legal process and official correspondence on behalf of the foreign corporation. See resident agent services.
Annual compliance for licensed foreign corporations includes filing a GIS with the SEC (within 30 days of the SEC license anniversary) and AFS via the eFAST/EAS portal, plus BIR and LGU obligations.
The Chamberlain licensing service
We handle the full SEC licensing process: document preparation, apostille coordination, resident agent appointment, and initial compliance setup. Fixed fee, no surprises.
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Frequently asked questions
Does a foreign company need a license to do business in the Philippines?
Yes. A foreign corporation that transacts business in the Philippines — other than isolated transactions — must obtain a license from the SEC. Operating without one means the foreign corporation cannot sue in Philippine courts to enforce contracts.
What is the difference between a branch office and a representative office?
A branch office can earn revenue in the Philippines and is an extension of the foreign parent (not a separate legal entity). A representative office cannot earn local income — it handles liaison, market research, and promotion only, with all expenses remitted from the head office.
What is the minimum capital for a branch office in the Philippines?
A branch office must remit at least USD 200,000 as assigned capital. This is reducible to USD 100,000 if the branch uses advanced technology (DOST-certified) or employs at least 15 Filipino workers.