Register a Corporation or Subsidiary in the Philippines
A domestic corporation is a corporation in the Philippines which can be wholly or majority owned by a foreign corporation. It has a personality distinct or separate from its foreign corporation limiting the liabilities of the domestic corporation, thus, protecting the foreign corporation from any legal liabilities that may be incurred by the domestic corporation or subsidiary.
The domestic corporation may be categorized as a domestic market enterprise or an export market enterprise. The former undertakes activities within the Philippine market and requires a capital investment of US$200,000. This may be reduced to USD$100,000 if its business activities involve advance technology which shall be determined by the Philippines’ Department of Science and Technology (DOST), or if the domestic corporation employs at-least 50 direct employees. The latter exports 60% of its goods or services or gross sales output from abroad and requires a minimum capital investment of five thousand pesos (PhP 5,000). Philippine banks may require a higher deposit.
Compared to a branch office, the domestic corporation or subsidiary must have a minimum of five board of directors with majority of the board being residents of the Philippines but not necessarily Philippine citizens. Election of a president, who must be a director, a treasurer, who may or may not be a director, and a corporate secretary who must be a resident and a citizen of the Philippines, and other officers as stated in the corporation’s by-laws, shall be organized once board of directors have been elected. The board of directors must own at least one share of capital stock in his name under the books of the corporation. A nominee shareholder holding a share of stock for another person may be possible through the execution of a Deed of Trust and Assignment and an Indemnity Agreement.
A domestic corporation must register with the Philippines’ Securities and Exchange commission (SEC) in order to provide legal personality thereto and transact business in the Philippines. The documentary requirements are:
- Name verification slip (may be secured online)
- Articles of Incorporation and By-Laws
- Treasurer’s Affidavit
- Registration Data Sheet