OPTIONS FOR SET-UP
Entry Model Registration Requirements
Option 1 –DOMESTIC
CORP.
(Organized under Philippine Laws)
1. consists of 5 incorporators,
maybe 100% Filipino-owned or
with 60% Fil and 40% foreign-
equity structure
2. no subscription from the mother
company
3. has its own identity
4. stock or non-stock company
5. filing fee is 1/5 of 1% of the
authorized capital stock (ACS)
Securities and Exchange
Commission (Registration of
Articles of Inc.)
Registration with Incenties -
1.Philippine Economic Zone
Authority (PEZA)/or
2.Board of Investments (BOI)
under Book I of E.O. 226
. www.peza.gov.ph
Options for Entry
Incentives Advantages
(PEZA locators)

Fiscal Incentives
World-class, environment-
May choose to locate inside an export friendly economic zones
processing zone and register with PEZA; or 1. Income Tax Holiday (ITH) for the first 4
-Export oriented enterprise at least 70% of to 8 years of operation
2. Special 5% tax rate after lapse of ITH

PEZA is a ONE-STOP
output shd.be exported SHOP including :
(companies located in an Ecozone)
-Activities listed in the PEZA Priority Projects 3. Tax- and duty-free importation of o Building and
such as Tourism Ecozone Locator, Medical machinery, equipment, spare parts, raw occupancy permits
Tourism Enterprise, Agro-Industrial Ecozone materials and supplies (for Ecozone o Special immigrant visa
Enterprise, etc. locators o Import and Export
4. Unrestricted use of consigned permits
(BOI applicants) equipment o Environmental
-Register with BOI and may locate 5. Tax credit on domestic capital Clearance Certificate
outside the ecozone equipment
6. Additional deduction for training
made easy because of
PEZA-DENR MOA
expense (for Ecozone locators)
-IPP listed projects and if not listed in the 7. Tax credit on imported raw materials o Locators are exempted
IPP, at least 50% of output is for export 8. Additional deduction for labor expense from securing LGU
if Filipino-owned and least 70% of output (not simultaneously availed with ITH) business permits
for export if foreign-owned) 9. Exemption from wharfage dues, and o Simplified registration
any export tax, duty, impost and fees form and processing
Products/services may either be directly or
indirectly export. (Indirect exporters may sell
Non-fiscal Incentives -BOI has full support for
goods to firms to exporter registered with investors who would like to
1. Employment of foreign national
PEZA or to other ecozone locators) 2. Permanent resident status for foreign do business in the country
investors and immediate family (for from their pre-operating to
Application is downloadable in the PEZA and ecozone locators) post-registration stage of
BOI website - 3. Simplified customs procedures their project.
4. Privilege to operate bonded
manufacturing warehouse -BOI has created a new
www.boi.gov.ph issue facilitation team under
the Investments Aftercare
Services Department (IASD)
incharged of the Aftercare
services program.
1
OPTIONS FOR SET-UP
Entry Model
Option 2 - SUBSIDIARY
(ownership maybe owned by a
domestic corporation or a
subsidiary of a foreign corporation)
(Domestic Subsidiary)
1. Consist of 5 incorporators with
more than 40% foreign-equity
2. Organized under Phils. laws
3. Most of the company
shares/stocks are held by the
mother company abroad
5. Earning or non-earning
5.US$200,000.00 paid-up capital
(if not for export).
6. P5,000 minimum paid up capital
if for export.
Securities and Exchange
Commission (SEC)
Registration with Incentives
- the Philippine Economic Zone
Authority (PEZA) or
-Board of Investments (BOI)
Options for Entry
Registration Requirements
1. For foreign entities (more than 40%
foreign-owned) at least 70% of total
services/goods rendered must be
exported if it will avail incentives with
PEZA/BOI
2. May qualify to register with the BOI if the
project/business activity is listed under
the Investments Priorities Plan (IPP) and
maybe allowed domestic sale if project is
pioneering
3. 100% of services/products may be
rendered/sold to the domestic market,
provided that the firm’s paid-up capital is
at least US$200,000.00 which may be
lowered to US$100,000.00 if the project
(a) involves advanced technology as
determined by the Department of
Science and Technology or (b) employs
50 direct labor force.
Incentives Advantages

Fiscal Incentives

World class, environment-
1. Income Tax Holiday (ITH) for 4 to 8 friendly economic zones
years of operation
2. Special 5% tax rate after lapse of ITH
(companies located in an Ecozone)
PEZA is a ONE-STOP
3. Tax and duty-free importation of SHOP including :
machinery, equipment, spare parts, raw o Building and
materials and supplies (for Ecozone occupancy permits
locators) o Special immigrant visa
4.Unrestricted use of consigned o Import and Export
equipment permits
5. Tax credit on domestic capital o Environmental
equipment Clearance Certificate
6. Additional deduction for training made easy because of
expense (for ecozone locators) PEZA-DENR MOA
7. Tax credit on imported raw materials o Locators are exempted
8.Additional deduction for labor from securing LGU
expense (not simultaneously availed business permits
with ITH) o Simplified registration
9. Exemption from wharfage dues, and form and processing
any export tax, duty, impost and fees

Non-fiscal Incentives
1. Employment of foreign national
2. Permanent resident status for
foreign investors and immediate
family (for ecozone locators)
3. Simplified customs procedures
4. Privilege to operate bonded
manufacturing warehouse
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OPTIONS FOR SET-UP
Entry Model
Option 3 – RHQ/ROHQ
Register/operate as a Regional
Headquarters (RHG)/Operating
Headquarters (ROHQ) under R.A.
8756 Establishment of
Multinational Company with
Regional/Operating Headquarters
in the Philippines)
Functions –
RHQ (engaged in int’l trade with
affiliates, subsidiaries, branches in
the Asia Pacific Region and other
foreign markets)
1. Acts as administrative branch
of a multinational company
engaged in international trade
2. Serves as supervision,
communications and
coordination center for its
subsidiaries, affiliates and
branches in Asia Pacific
Region
3. Does not earn income in the
Philippines
ROHQ
Engaged in int’l tade with affiliates,
subsidiaries, branches in the Asia
Pacific Region and other foreign
markets). Performs qualifying
services exclusively to its affiliates,
subsidiaries and branches in the
Asia Pacific region and other
foreign markets.
Registration Requirements Incentives Advantages
ROHQ -
Derives income from undertaking the RHQ/ ROHQ
ROHQ derives income in the
INCENTIVES TO EXPATRIATES
following qualifying services: Philippines

General administration and planning

Business planning and coordination 1. Multiple entry visa (including spouses and REGIONAL WAREHOUSE of
unmarried children below 21 years old) valid RHQ and ROHQ(register with

Sourcing/ procurement of raw for three (3) years within 72hrs from PEZA)
materials components submission of documents

Corporate finance advisory services 2. Exempt from securing ACR
A multinational company

Marketing control and sales 3. Tax and duty-free importation of established as an
promotion household goods and personal effects ROHQ/RHQ may also

Training and personnel management 4.Travel tax exemption (personnel and their establish a Regional

Logistics services dependents) Warehouse in an ecozone

Research and development services 5.Withholding tax of 15% on compensation o Used to store spare parts,
and product development income applicable to both alien and Filipino components, semi-
holding managerial and technical positions

Technical support and maintenance finished products and raw

Data processing and materials
INCENTIVES TO RHQ o Undertake limited
communications
activities of a packing &

Business development 1. Exemption from corporate income tax, but labeling nature
shall file Annual Info. Return from the BIR o Materials stored in a RW
RHQ is required to remit annually to the 2. Exemption from Value Added Tax on will not be subject to
Philippines an amount that is necessary to sale/lease of goods and property, and import taxes & duties,
cover its operations and the said amount rendition of services unless they are w/drawn
should not be less than US$50,000.00; for use in local market.
INCENTIVES TO ROHQ
ROHQ requires to have a minimum inward 1. Subject to preferential income tax rate
remittance of US$200,000.00 (one time of 10% on taxable income
only) or its equivalent in an acceptable 2. Subject to 10% VAT
foreign currencies.
RHQ/ROHQ
-File/submit application with the BOI- 3. Exemption from all kinds of local taxes,
PERD, and if it is approved, BOI will be fees or charges, except real property
the one to endorse company’s letter- tax on land improvements and
equipment
approval to SEC for the issuance of the
Certificate of Registration. 4. Tax- and duty-free importation of
training materials and equipment
SEC Filing fee:
5. Privilege to import of new motor
RHQ Filing fee – P5,000 vehicles (subject to payment of taxes
ROHQ – 1% of the actual remittance but not and duties)
less than 1% of peso equivalent of $200 at the
time of remittance
(BOI)
3
Filing Fee with BOI –P4,500.00
OPTIONS FOR SET-UP
Entry Model
Option 4 – BRANCH
OFFICE
(a corporation organized under
foreign laws)
Register first with the -
Securities and Exchange
Commission (SEC) under
the Foreign Investmetns
Act
Registrable with the
Philippine Economic Zone
Authority (PEZA) to avail
of incentives if it is an
export oriented company
Registration Requirements
Functions -
Carries out business activities of the head
office and derives income from the host
country.
May operate any business activity in
industries not listed in the Negative List of
Foreign Investments Act or R.A. 7042
A. Requires to remit from its head office at
least US$200,000.00 (one time remittance),
can be reduced to US$100,000.00 if:
1. Activity involves advanced technology;
and
2.Employ at least 50 direct employees
B. Requires to post a bond of P100,000.00 to
pay for its resident creditors (requirement by
SEC)
Minimum paid up capital of P5,000.00 if for
export
SEC Filing Fee – 1% of the actual inward
remittance but not less than P2,000.00
Incentives Advantages
Derives income in the
May enjoy benefits and incentives if Philippines
registered with PEZA such as:
Qualifies to register with
1. Income tax holiday for the first 4 to 8 PEZA if it is an export-
years of operation; oriented firm and may locate
2. Special 5% tax rate after lapse of ITH within the Ecozone zone.
3. Tax and duty-free importation of
machinery, equipment, spare parts, raw P5,000.00 minimum paid up
materials and supplies capital if export oriented.
4. Unrestricted use of consigned
equiipment
5.Tax credit on domestic capital
equipment
6. Additional deduction fro training
expense
7. Exemption from wharfage dues, and
any export tax, duty, impost and fees
8. Permanent resident status for foreign
investors and immediate family
Tax and duty-free importation of
household goods and personal effects
of the expatriates as long as visa is
converted to non-immigrant visa or
immigrant visa.
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OPTIONS FOR SET-UP
Entry Model Registration Requirements Incentives Advantages

- Deals directly with the clients of the parent -Tax and duty-free importation of
company but does not derive income from household goods and personal effects
the host country of expatriates as long as visa is
Option 5 – converted into a non-immigrant visa or
- Fully subsidized by its head office. immigrant visa.
REPRESENTATIVE - Undertakes activities such as but not limited
OFFICE to information dissemination and promotion -Exempted from Corporate Income Tax
(a corporation organized under of the company’s products as well as quality
foreign laws) control of products.
- Requires to inwardly remit US$30,000.00
(one time remittance) for its operating
Securities and Exchange expenses.
Commission (SEC) under -Filing Fee – 1/10 of 1% of the actual inward
the Foreign Investments remittance of the corporation converted into
Act Philippine currency but not less than
P2,000.00

5
OPTIONS FOR SET-UP
Entry Model Registration Requirements Incentives Advantages

None under the law

100% Foreign-owned is allowed as long as it

complies with the following qualification
requirements:

OPTIONS 6 - -Minimum paid up capital of US$2.5M (if less

than the amount, then it has to be Filipino-
RETAIL TRADE BUSINESS owned)

Registration under the Retail -Five (5) retailing branches or franchises

Trade Nationalization Act or around the world
R.A. 8762
-Five-year track record in retailing

Securities and Exchange Application is filed with the BOI-Legal

Commission (SEC) Department while registration is secured with
the Securities and Exchange Commission
(SEC)

Options for Entry

Please refer to the following websites for further information/details:

a. www.sec.gov.ph
b. www.boi.gov.ph
c. www.peza.gov.ph
or email NERBAC (National Economic Research and Business
Assistance Center) at www.nerbac.gov.ph