Foreign Business Philippines

Foreign Business Philippines

Legal Framework for Foreign Investors

The Philippines offers a favorable business environment for foreign investors. However, the legal process of establishing a company in the Philippines as a foreign national requires compliance with specific laws and regulations. Among these are the Foreign Investments Act of 1991 and the Corporation Code of the Philippines.

Types of Business Entities

Foreign nationals can choose among several types of business entities, such as a domestic corporation, a branch office, a representative office, or a regional operating headquarters.

Documentary Requirements

1. Name Verification: Secure and register a company name with the Securities and Exchange Commission (SEC).
2. Articles of Incorporation: Submit Articles of Incorporation and other required documents to the SEC.
3. Bank Certificate: Open a bank account to deposit the required paid-up capital and obtain a bank certificate.
4. SEC Approval: Once all documents are submitted and the paid-up capital is verified, the SEC will grant a Certificate of Incorporation.

Governmental Approvals

Additional governmental approvals may be needed depending on the type of business. These may include:

1. Mayor’s Permit: Secure from the local government where the business is located.
2. Bureau of Internal Revenue (BIR): Register the business and secure a Certificate of Registration.
3. Philippine Economic Zone Authority (PEZA) or Board of Investments (BOI): If applicable, secure relevant licenses or registrations.

Post-Registration Requirements

1. Tax Registration: Must be completed with the BIR.
2. SSS, PhilHealth, and Pag-IBIG: Register with these government agencies for employee benefits.
3. Business Permits: Keep all business permits up to date.
4. Reporting: Regularly file financial statements and tax returns.

Limitations on Foreign Ownership

Some sectors restrict the percentage of foreign ownership. It’s crucial to consult the Foreign Investment Negative List to understand these limitations.

Compliance and Due Diligence

Failure to comply with regulatory requirements may result in legal issues. It’s advisable to seek legal counsel to ensure all regulations are followed.

Conclusion

Navigating the process of establishing a business in the Philippines as a foreign national is complex but manageable with the right guidance. Understanding the legal landscape is essential for successful and smooth business operations.