10th Sep 2014
A Branch office of a foreign company carries out the business activities of the foreign head office and derives income from the Philippines. It has NO separate legal personality since it is merely an extension of the foreign head office. The minimum inward remittance for a branch office is Two Hundred Thousand United States Dollars (US$200,000.00). However, if the branch uses advanced technology or employ a minimum of 50 direct employees, it may be allowed a minimum paid-up capital of One Hundred Thousand United States Dollars (US$100,000.00). In addition, if it is an export market enterprise, the minimum paid-up capital is only Five Thousand Pesos (P5,000.00). An export market enterprise is an enterprise wherein a manufacturer, processor or service enterprise exports sixty percent (60%) or more of its output, or wherein a trader purchases products domestically and exports sixty per cent (60%) or more of such purchases.
You will need a Resident Agent for a Branch Office. Furthermore, for a Philippine branch office, the Corporation Code requires that within sixty (60) days after the issuance of the license to transact business in the Philippines, the branch office shall deposit with the Securities and Exchange Commission for the benefit of present and future creditors of the branch office in the Philippines, securities satisfactory to the Securities and Exchange Commission, consisting of bonds or other evidence of indebtedness of the Government of the Philippines, its political subdivisions and instrumentalities, or of government-owned or controlled corporations and entities, shares of stock in “registered enterprises”, shares of stock in domestic corporations registered in the stock exchange, or shares of stock in domestic insurance companies and banks, or any combination of these kinds of securities, with an actual market value of at least One Hundred Thousand Pesos (P100,000.00).
In addition, within six (6) months after each fiscal year of the branch office, the Securities and Exchange Commission shall require the branch office to deposit additional securities equivalent in actual market value to two percent (2%) of the amount by which the branch office’s gross income for that fiscal year exceeds five million (P5,000,000.00) pesos.
Nicolas & De Vega Law Offices is a full service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 4706126, +632 4706130, +632 4016392.
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