Foreign Company Branch Setup Requirements in the Philippines

A 2025 practitioner’s guide

1. Concept of a “Branch Office”

A Philippine branch is not a separate juridical entity but a legal extension of the foreign corporation; all liabilities flow straight back to head-office assets. It may engage in any business the parent may lawfully carry on in the Philippines, unlike a representative office that is limited to liaison activities.(ASEAN Briefing)

2. Core Statutes & Regulations

Instrument	Key points for branches
Revised Corporation Code (R.A. 11232, 2019)	• Licence compulsory (Secs. 140-144) • Initial ₱500 000 securities deposit + 2 % of income over ₱10 m each year(ACCRALAW, Supra Source)
Foreign Investments Act (R.A. 7042, as amended by R.A. 11647, 2022)	• Abolished the old “paid-in equity” concept for branches and reaffirmed US$ 200 000 assigned capital, with carve-outs (see § 4)
CREATE Law (R.A. 11534, 2021)	• Cut resident-foreign-corp income tax to 25 %; abolished ROHQ’s 10 % preferential rate effective 1 Jan 2022(EY Tax News)
12ᵗʰ Foreign Investment Negative List – E.O. 175 (27 Jun 2022)	Lists industries subject to full or partial Filipino ownership; branches must still comply.(Forvis Mazars)
Latest SEC circulars (2024-25)	Mandatory eFAST filing; AFS audit only if assigned capital or assets ≥ ₱1 m for branches/rep offices.(AJA Law)

3. Foreign-ownership ceilings

Except for sectors in the Negative List (public utilities, mass media, etc.), a branch may be 100 % foreign-owned. If a sector is partly closed, only the allowable percentage may be registered.

4. Capitalisation Rules (2025)

Vehicle	Minimum inward remittance	When lower capital is allowed
Branch (domestic-market)	US$ 200 000(ASEAN Briefing)	—
Branch (advanced-tech or ≥ 50 Filipino workers)	US$ 100 000(ASEAN Briefing)	Needs DOST or DOLE certification
Branch (≥ 60 % export)	PHP 5 000 nominal(Company Formation Philippines)	SEC/PEZA endorsement required
Representative Office	US$ 30 000 remitted annually (cost-centre only)(InCorp Philippines)	—
Regional Hq (RHQ)	US$ 50 000 each year; non-income-earning(Business Registration Philippines)	—
Regional Operating Hq (ROHQ)	US$ 200 000; may bill affiliates; taxed at 25 % after 2022(InCorp Philippines, EY Tax News)

Assigned capital must be fully remitted in foreign currency through a Philippine bank before the licence is released, then converted to pesos.

5. SEC Documentary Requirements (core list)

Application Form (F-103/F-104, depending on branch type).
Authenticated / apostilled Articles & By-laws of the parent.
Board resolution authorising the Philippine branch and appointing a resident agent.
Parent’s audited financial statements (latest).
Bank certificate of the capital remittance.
Resident agent’s written acceptance of appointment.
Proof of name reservation (usually “ [Parent Name] – Philippine Branch ”).
SEC filing fee receipt (see § 6).

All foreign-language documents must be translated into English and consularised or apostilled.

6. Government Fees & Timelines

Filing fee: 1 % of the inward remittance (minimum ₱2 000) for a branch; representative offices pay 1/10 of 1 %. A Legal Research Fee equal to 1 % of the filing fee also applies.(Company Formation Philippines)
Typical processing time: 8 – 12 weeks end-to-end if papers are complete.
After the SEC licence issues, the branch has 60 days to post the initial ₱500 000 securities deposit with the SEC.

7. Step-by-Step Registration Workflow

Check the Negative List and special-sector laws.(ASEAN Briefing)
Reserve the name and open a Philippine bank account; remit capital.
File licence application + fees at the SEC Company Registration and Monitoring Department (CRMD).
Upon approval, post the securities deposit and obtain Certificate of Authority to Print official receipts.
Register with the BIR for TIN, VAT/percentage tax, books of accounts.
Secure LGU permits (Barangay Clearance → Mayor’s/Business Permit).
Enrol with SSS, PhilHealth, Pag-IBIG, DOLE once staff are hired.
Optional: register with PEZA, BOI, or other investment-promotion agencies for incentives.

8. Tax & Fiscal Regime (as of 2025)

Item	Branch	Representative Office
Corporate Income Tax	25 % on net Philippine-source income; MCIT 2 % after 4 th year(Dentons)	N/A (no income)
Branch Profits Remittance Tax	15 % on after-tax profits when remitted abroad (treaties may lower)(Dentons)	N/A
VAT	12 % on local sales of goods/services; zero-rating possible on export sales	N/A
Withholding taxes	Standard Philippine rates; treaty relief available	N/A
ROHQ special note	Preferential 10 % rate repealed; now 25 % CIT from 1 Jan 2022(EY Tax News)	—

9. Annual Compliance Calendar

Filing	Due date
Annual Financial Statements (AFS)	Within 120 days of fiscal year-end; audit mandatory if assigned capital or assets ≥ ₱1 m.(AJA Law)
General Information Sheet (GIS-Branch)	Within 30 days of the anniversary of SEC licence.(AJA Law)
Additional securities deposit	2 % of excess gross income (see § 2) — computed within 6 months after fiscal year-end.
eFAST enrolment	Automatic for new licences; older branches must enrol before filing.

Failure triggers escalating fines and possible revocation (SEC MC 6-2024).(AJA Law)

10. Employment & Immigration Essentials

All staff (including resident agent if an employee) must be covered by SSS, PhilHealth and Pag-IBIG.
Foreign executives need 9(g) employment visas or 47(a)(2) PEZA/BOI visas.
Alien Employment Permit (AEP) issued by DOLE remains prerequisite to the visa.

11. Incentives, Zones & Special Registrations

Locating in a PEZA ecozone, Clark/CEZA, or BOI-registered project can grant tax holidays, 5 % GIE, duty-free importation, or VAT zero-rating, but export performance and local content rules apply.

12. Exit, Closure & Deregistration

Winding-up requires:

SEC petition to surrender licence;
Release of the securities deposit;
BIR tax clearance;
LGU permit cancellation;
Publication of notice to creditors (30 days). Outstanding liabilities, including labour claims, survive against the parent.

13. Common Pitfalls & Practical Tips

Pitfall	Mitigation
Late capital remittance → SEC can suspend licence	Wire funds before filing so bank certificate is ready.
Resident agent resigns without replacement	Appoint a new one and file amended application within 30 days.
Missing additional securities deposit	Calendar the due date in compliance software.
Treating branch workers as “contractors” to avoid SSS	DOLE audits classify mis-labelled workers – register them properly.
Overlooking tax-treaty procedural rules	Secure BIR treaty relief ruling before applying lower withholding/BPRT rates.

14. Recent & Upcoming Developments

SEC-ZERO (MC 03-2025) will make all new branch applications fully digital and notarisation-free starting Q4 2025.(AJA Law)
The Senate’s pending CREATE MORE bill proposes to align branch incentives with domestic corporations; monitor in H2 2025.
Discussions continue on raising or indexing the ₱500 000 securities deposit to inflation.

Conclusion

Setting up a foreign branch in the Philippines is administratively heavier than forming a domestic subsidiary but offers 100 % ownership and a single balance-sheet with head office. Success hinges on capital compliance, resident-agent continuity, timely SEC/BIR filings and an informed reading of sector-specific restrictions.

This guide is for general information only and is not legal advice. Engage Philippine counsel for transaction-specific assistance.