A branch office is considered an extension of a foreign head office or a foreign corporation. It has no distinct personality from the head office and as such, liabilities incurred by the branch office extend to the foreign head office. A Philippine branch can engage in income generating activities and only requires appointment of a resident agent. A resident agent must be a resident of the Philippines but not necessarily a Philippine citizen. If a foreign national is to be the resident agent of a branch office, he/she should have a valid Philippine visa, which entitles the holder, at the time of its issuance, to stay in the Philippines continuously for at-least one year.
The required capital investment to be remitted in setting up a branch is US$200,000 which is one of the major requirements of the SEC upon application for registration. Under the Foreign Investment Act, a branch office can be fully foreign owned if it will be exporting physical goods or services or generate revenue from abroad amounting to 60% of its gross sales. This can be registered with as little as P5,000 paid up capital. However, most banks in the Philippines require a higher deposit ranging from P25,000 - P50,000 to open a corporate bank account.
Setting-up a branch office requires the head office to submit documentary requirements to prove its existence in the country of origin. It also has to obtain a license from the Securities and Exchange Commission (SEC) to do business in the Philippines. The requirements in registering a branch office with the SEC are as follows:
K&C provides full business registration services to obtain all the permits and licenses needed to legally start and conduct business in the Philippines. We have registered over 500 foreign companies in the Philippines in the last seven years in various industries, including many in the IT-BPO. Our corporate and tax lawyers will meet and discuss your options and requirements for opening your new business in the Philippines, draft articles of incorporations and by-laws, then process all documents.