Establishing a Representative Office in the Philippines

Opening a representative office in the Philippines is an effective method for international companies to create a local presence before commencing full-scale trading activities. This setup acts primarily as a support hub, enabling a parent company to handle client communications and quality control within the region.

What is a Representative Office?
A Philippines representative office is considered an arm of a foreign corporation. In contrast to a branch office, it cannot derive income from Philippine sources. Instead, all operating expenses must be completely subsidized by the parent company abroad. Because it does not function as a revenue-generating unit, it is typically exempt from local income taxes, making it a strategic entry point for foreign firms.

Registration Requirements
To register a representative office, the Securities and Exchange Commission stipulates a minimum capital deposit of US$30,000. This fund is intended to handle the office's startup operating costs. Furthermore, the foreign corporation must select a resident agent residing in the Philippines to handle court documents on its account.

Permitted Activities
Although the scope of activities is restricted, it provides important benefits:

Data Gathering: Conducting market analysis to evaluate the local demand.

Promotion: Disseminating details about the parent company's services.

Assurance: Ensuring that Philippine materials meet the corporate specifications.

Communication: Acting as a bridge between customers and philippines representative office the overseas office.

How to Register
The process to founding your Philippines representative office includes multiple key steps:

Company Name: Checking the corporate name with the SEC.

Documentation: Gathering authenticated versions of the By-laws and Board Resolutions from the home country.

Funding: Remitting the required $30,000 into a local corporate account.

Application: Submitting the application form and attachments for license issuance.

Local Permits: Securing Mayor's permits and filing philippines representative office with the BIR.

Why Choose a Representative Office?
Choosing a representative office is a strategic move for businesses planning to philippines representative office test the market before taking on complex tax burdens. It allows seamless philippines representative office administrative support and creates visibility in one of Southeast Asia's fastest-growing economies. philippines representative office Once the market opportunity is validated, the office can later conversion into a full corporation for revenue-generating activities.