Should you wish to incorporate a Philippine subsidiary, you need to file an application with the Securities & Exchange Commission. It must be noted that a subsidiary has a distinct and separate personality from its parent company. In forming a subsidiary, it must be borne in mind that the Corporate Secretary and Corporate Treasurer must be Filipino citizens.
A subsidiary may either be a Philippine Domestic Corporation or a Foreign-Owned Domestic Corporation.
A. Philippine Domestic Corporation
A Philippine domestic corporation is one wherein at least 60% of the stocks are held by Filipinos and the majority of the governing body should be Filipinos. As such, a domestic corporation has a legal personality separate from its stockholders.
B. Foreign-owned domestic corporation
A Foreign-owned Domestic Corporation is one wherein foreign equity exceeds forty percent (40%). It may be controlled by foreigners but the Corporate Secretary and Treasurer must be Filipino residents and citizens. The minimum paid-up capital for a Foreign-owned Domestic Corporation is Two Hundred Thousand United States Dollars (US$200,000.00). However, 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.
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