How to Set up a Business in the Philippines.
Establishing a business in the Philippines is an exciting feeling but you need to know more about business itself. The first thing you need to do is to identify what type of business ownership structure best suited for your needs. Establishing a business in the Philippines involves many steps, so it can be a time-consuming process
To have a stress free setting up of business, First we need to check the Business Structures in the Philippines.
Here’s the Business Structures in the Philippines
1. A Sole Proprietorship is a business structure owned by one individual who is liable for any of the debts of the business. The individual and business are considered as one entity. Sole Proprietorship is registered with the Department of Trade and Industry.
2. A Partnership is a professional association with a minimum of two owners. All the responsibilities and income of a partnership structure are shared between the partners. Partnership structures are required to register with the Securities and Exchange Commission.
3. A Corporation is a legal entity with a purpose of conducting business, owned by its shareholders and recognized by the state as separate entity from its owners. Corporation structures is required to register with the Securities and Exchange Commission
- One Person Corporation (OPC)
- One Person Corporation is a corporation with a single stockholder.The sole shareholder in an One person Corporation is only be liable up to the extent of their capital.OPC’s should follow the rules set by the Securities and Exchange Commission (SEC)
- Domestic Corporation
- A domestic corporations is an artificial being created by operation of law and its juridical personality is separate from the stockholders and other corporations involved. Compose of at least five (5) to fifteen (15) Natural Person of legal age can form a corporation.The stockholders of a domestic corporation can only be held liable up to the extent of their share capital.OPC’s should follow the rules set by the Securities and Exchange Commission (SEC)
- Foreign Corporations
- is a corporation registered under the laws of one state or foreign country and does business here in the Philippines.Foreign Corporations normally required a capitalization of US$ 200,000.00. Foreign Corporation should follow the rules set by the Securities and Exchange Commission (SEC)
Types of Foreign Corporation:
- Branch Office (BO) – A branch office is an extension office/ liaison office of a corporation owned by a company based outside the Philippines It is established to perform the same business functions of its principal company and may generate revenue from its operations in and out of the Philippines Usually a parent company form a branch office to initially offer customer service or sales to the customers of its parent company
- Regional Operating Headquarters (ROHQ) – A Regional Operating Headquarters (ROHQ) is the local office extension of a foreign corporation that may generate income in the Philippines through rendering services to its head office, affiliates, branches, or subsidiaries
- Representative Office (RO) – A representative office is a liaison office for head offices abroad. It is an extension office and where All of its operating costs must be covered by transfer of funds from the parent company . Activities allowed are dealing with the clients of the parent company and is forbidden to offer services to 3rd parties
After choosing what business structure you need, then the next step is to registered your business
Complete Business Registration Procedure
1. Register your business name with the Department of Trade and Industry if you’re Business in Sole Proprietorship. If you choose Partnership or Corporation then secure the business name in the Securities and Exchange Commission.
Business Name Registration in DTI
2. Secure a contract of Lease if your renting or support ownership of the building you’re going to use.
3.Secure a Barangay Clearance in the Barangay of your Business Address.
4. Apply in your Local Government Unit for building Permit if your constructing a building for your business. If the building already existed then ask your lessor for the building Permit.
5. Apply in your LGU a Business Permit for your business. Attachment needed are the Department of Trade & Industry / Securities and Exchange Commission Registration, . Barangay Clearance and the Contract of Lease.
6. Once you have done the Business Permit in the LGU, then Register your Business in the Bureau of Internal Revenue. Same Attachment plus the approved Business Permit from the LGU
BIR Registration for Sole Proprietorhip
7. After you have Register in BIR have your Official Receipts Printed by an authorized BIR Printer.
8. Then register your Business with the Social Security System, Phil-Health and the Home development Mutual Fund.
9. Secured a working visa if you employed a foreign nationals.
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