AC 1104

By: Marichu S. Fornolles

How to Register a Corporation in the Philippines?
To Apply for SEC Registration:
Requirements:
• Name verification slip
• Articles of Incorporation and By-laws or Articles of Partnership
• Treasurer’s Affidavit/Authority to Verify Bank Account
• Registration Data Sheet
• Written undertaking to change corporate name by any Incorporator or Director,
Trustee, Partner
• Bank Certificates of Deposit (notarized in place where bank is located)
• Other Additional Requirements

The total time of incorporation in the Philippines is 2-3 months.

Contact Details Website: www.sec.gov.ph (Register online for the corporate name)
Alternatives to setting up a company in the Philippines
• Another way to start doing business in the Philippines is to open
a branch. Branch offices can do business and generate
income in the Philippines. However, it cannot engage in any
activities that are in the Foreign Investment Negative List.
• The minimum capital requirements for branch offices are the
same as for foreign companies – US$ 200,000.
• As a branch office is considered an extension of the parent
company, it does not need separate directors or corporate
officers. It does, however, need a resident agent. If the person is
a foreign national, he or she must have a work permit in the
Philippines.
 Representative Office
• Representative offices in the Philippines cannot engage in any
commercial activities nor earn any revenue. However, they
can provide customer service, conduct market research, and
promote the company’s products.
Representative offices are also great for companies who
would like to register their products but not to deal with the
distributors yet.
To set up a representative office in the Philippines, you must
transfer US$30,000 to the corporate bank account in the
Philippines. The same amount must be remitted annually to cover
the operating expenses of the representative office.
 Outsourcing Business Activities
• Setting up a company is not always the fastest nor the most
reasonable market entry strategy. You can also choose the option
to outsource only some of the services to a third-party
service provider such as Emerhub.
• Outsourcing is a popular way for corporations to reduce
expenses, increase flexibility and acquire additional
competencies. However, it is also an effective way for expanding
to emerging markets to emerging countries such as Indonesia,
Vietnam, and the Philippines.
 9 Non-Core Activities or Common Services to Outsource
when entering or expanding to emerging markets
• Tax reporting
• Accounting and payroll
• Invoicing
• Staff augmentation
• Undername import
• Customer support service
• Distributor search
• Local content production
• Market research
 Tax Reporting
• Tax reporting is different in each country. Learning the local tax regulations
and hiring qualified accountants is expensive and time consuming. This
makes tax reporting an obvious process to outsource since the service
provider will already have the local knowledge and manpower to ensure
that your taxes are reported correctly.
• For example, here is what you should report when operating business in
Indonesia:
Monthly: Corporate Income Tax, Withholding Taxes, Value-Added Tax
(VAT), Luxury-Goods Sales Tax (LGST)
Annual: Corporate Income Tax, Individual Income Tax, Land and
Building Tax
 Accounting and Payroll
• Accounting and payroll is time consuming, regulations vary per country and it has to be
done correctly. As you are entering new market, you can choose to invest time into
building your own accounting team or outsource it to a service provider.
• Here is a list of accounting services your company can outsource:
1. Setting up accounts
2. Maintaining general ledger
3. Processing invoices and recording transactions
4. Making payments on behalf of the company
5. Preparation of management accounts (profit and loss, balance sheet, cashflow
and income statements)
6. Converting management accounts to an international currency
Here is a list of payroll services you can outsource:
1. Setting up records of employees’ salaries, wages, bonuses and applicable taxes
2. Health and old age saving insurance calculations
3. Processing payroll payments
 Invoicing

• A separate point to consider is outsourcing Accounts

Payable services for your invoicing to avoid
mistakes and delays when handing out invoices.
Along with following all other customer expectations,
meeting deadlines and handing out correct
documentation is essential.
 Staff Augmentation
• Staff augmentation service is a very fast and lean way to enter new
markets. Imagine not needing to set up you your legal entity or go through
an extensive recruitment process, yet having a full time team working for
you in a foreign market. A local team who knows the market and is
qualified to do the tasks required. This is what staff augmentation is all
about.
• Depending on the needs of your business, hiring either one person or a
large team is possible. While this is the service that is especially popular in
the IT sector, it is excellent when planning on expanding to a new market
and needing to test the area for business.
 Main Reasons Why Outsource
Staff Augmentation Service

1. Conducting market research

2. Selling products
3. Finding suppliers or distributors

Having the team of a local skilled professionals to support you makes it is

easier to avoid any possible complications. Being a newbie in the country, it
can be a challenging process to gather a reliable team. Especially in an
emerging market where qualified workforce is often limited and demand for
high category workforce is especially strong.
 Undername Import
• Importing is not the quickest of processes in emerging
markets – in Indonesia for example, becoming an
importer takes around 4-5 months (a little less in
Vietnam). Investors get help from an undername importer,
a company that already has the import licenses for the
product you want to bring to the country.
• This way, neither your own legal entity nor an import
license is needed. It works as a great solution for
businesses that are interested in minimizing delays,
additional costs and want to start selling immediately.
 Customer Support Services

• It is a common worldwide practice to outsource either a

full call center, one virtual assistant or web chat team to fill
the positions of customer support operations. This can be
even as much as a professional team fully integrating
online, mobile and landline communications up to 24/7.
• Main outsourcing benefit for customer support service is
that there is no need to keep an employee on duty for the
standard weekly working hours, only for the hours
required per week. Also, no costs apply for employee
benefits.
 Distributor Search
Use distributor search when exporting products to a new market while using
local distributors. No need to start setting up local operations.
The main reasons why outsourcing this service is a good idea for a new
entrepreneur:
• Developed market knowledge and supply chain
• Relatively low cost of entry
• Lean business model, ability to adapt to new market conditions quickly
• Can handle product transportation and warehousing
• As per agreement, can assist with product marketing
• Will take care of any possible credit risks arising from product’s buyers
• Protecting your intellectual property and choosing most suitable
distributors for your line of business carries most weight when making the
decision about this market entry service.
 Local Content Production
Outsourcing becomes useful when a company is planning on local content
production. This is something that different fields of activities will benefit
from, for example:
• Translating labels and packaging
• Localising website
• Translating and localising marketing materials
• The need to outsource is heightened especially if you do not speak the
language and can not check the validity of the work received.
• If you do not need so much content production then it’s also probably
cheaper to outsource it because you don’t have enough work for a full time
person.
 Market Research
• Without having professionally gathered insights about the market, you will only rely on
your so called gut feeling and subjective opinions when entering the new market. In the
long run, investing in market research is cheaper as you avoid costly mistakes and find
new opportunities faster.
• Market research phase is where an outsourced company should evaluate three key
components:
• Market size and trends
• Competition
• Laws and regulations
• These are the steps where we gather and systemize data about the market you are
about to enter. The exact activities conducted under a market research depend on the
activities of your company.
• It can also result in finding out that the market does not meet the business expectations
and criteria, thus that you should not enter that geographical area. The faster you find
out that this specific market should be excluded, the less financial damage is done and
you can focus on areas where better potential lies.
 Knowledge is Power
• There is no end to education. We learn more by looking for the
answer to a question.
Lloyd Alexander
• The illiterate of the 21st century will not be those who cannot read
and write, but those who cannot learn, unlearn, and relearn.
Alvin Toffler
• Learning is a lifelong process of keeping abreast of change and the
most pressing task is to teach people how to learn.
Peter Drucker
Thank You for Listening !!!