Register a Regional Operating Headquarters (ROHQs) in the Philippines
A Regional Operating Headquarters (ROHQ) is a foreign business entity which is allowed to derive income in the Philippines by performing qualifying services to its affiliates, subsidiaries or branches in the Philippines, in the Asia-Pacific Region and in other foreign markets as follows:
- General administration and planning;
- Business planning and coordination;
- Sourcing / procurement of raw materials and components;
- Corporate finance advisory services;
- Marketing control and sales promotion;
- Training and personnel management;
- Logistics services;
- Research and development services and product development;
- Technical support and maintenance; and
- Data processing and communication
A ROHQ is prohibited from offering qualifying services to entities other than its affiliates, branches or subsidiaries as declared in its registration with the Securities and Exchange Commission (SEC). Neither is it allowed to directly and indirectly solicit or market goods and services whether on behalf of their mother company, branches, affiliates, subsidiaries or any other company.
ROHQs are subject to 10% preferential rate on taxable income and are subject to 12% VAT.
Incentives with ROHQs in the Philippines
- Exemption from all kinds of local taxes, fees and charges except for real property tax on land improvements and equipment;
- Tax and duty free importation of training materials and equipment; and
- Importation of motor vehicles subject to the payment of corresponding taxes and duties.
Expatriates and ROHQs are entitled to the following incentives:
- Multiple entry special visa, including those of spouses and unmarried children below age 21;
- Withholding tax of 15% on salaries, wages, annuities, and other emoluments of expatriates;
- Travel tax exemption; and
- Tax and duty free importation of personal and household effects.
Filipinos occupying managerial and technical positions in an ROHQ of multinational companies shall be taxed at 15% of their gross income. This rate will be applicable even in the absence of an alien executive in the organization. Filipino executives of ROHQs governed by Book III of Executive Order No. 226 may opt to be taxed either at 15% of gross income or at the regular tax rates of 15% to 32% of their taxable income.
Requirements for the Registration of ROHQ office in the Philippines
- Application form for ROHQ
- Name verification slip;
- Authenticated certification that the firm is engaged in international trade with affiliates,subsidiaries, or branch offices in the Asia Pacific Region or other foreign markets;
- Authenticated certification from the principal officer of the foreign entity that it wasauthorized to establish an ROHQ in the Philippines;
- BOI endorsement of the approval of the ROHQ
- Proof of inward remittance;
- Registration Data Sheet
- Authenticated financial statements