Q&A about setting up foreign-owned Limited Liability Company in Philippines

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Drafted by Dale Chen 20230721 v1
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Philippines Foreign-funded Limited Liability Company
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Philippines – Organizational Structure of Foreign-funded Companies
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What are the types of Foreign-funded Companies in Philippines?

1. Foreign Branch Office: A branch office is an extension of a foreign company that is registered in the Philippines. It allows the foreign company to establish a presence and carry out business activities in the country. The branch office is considered an integral part of the parent company and operates under its name.
2. Representative Office: A representative office is established by a foreign company to undertake non-income generating activities. It serves as a liaison or coordination office for the parent company, conducting market research, promoting the company’s products or services, and providing support to its customers or clients in the Philippines.
3. Limited Liability Corporation (LLC): A domestic corporation is a locally incorporated company in the Philippines that is wholly or partially owned by a foreign parent company. This subsidiary has a separate legal entity from its parent company and is subject to Philippine laws and regulations. It allows the foreign company to have control and ownership over a local business entity.
4. Regional or Area Headquarters: Foreign companies can establish regional or area headquarters in the Philippines to oversee their operations in the Asia-Pacific region. These headquarters serve as management, control, or coordination centers for the company’s subsidiaries, branches, or affiliates in the region.
5. Regional Operating Headquarters (ROHQ): An ROHQ is a type of company that performs qualifying services for its affiliates, subsidiaries, or branches globally. It can engage in income-generating activities and benefit from a special tax regime. The ROHQ serves as a centralized support system for foreign companies’ operations.
6. Joint Venture: A joint venture involves a partnership between a foreign company and a local entity or individual. The parties contribute capital, share risks, and jointly operate the business venture. Joint ventures can be established as corporations, partnerships, or contractual arrangements, and they allow foreign companies to access local expertise and resources.
   

   Submit

   https://www.mondaq.com/investment-strategy/9340/types-of-business-organizations-that-foreign-investors-may-establish-in-the-philippines

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What are the procedures for setting up the Foreign-funded Limited Liability Company in Philippines?

1. Reserve a Company Name: Submit a proposed company name to the Securities and Exchange Commission (SEC) for reservation. The name should be unique and not similar to any existing registered company in the Philippines.
2. Prepare the Articles of Incorporation and By-Laws: Prepare the Articles of Incorporation and By-Laws, which outline the company’s purpose, share structure, capitalization, governance rules, and other relevant details. These documents need to comply with the requirements set by the SEC.
3. Accomplish the Application Forms: Accomplish the necessary application forms provided by the SEC. These forms typically include the Name Verification Slip, Articles of Incorporation, By-Laws, and other supporting documents.
4. Submit the Requirements to the SEC: Submit the completed application forms, Articles of Incorporation, By-Laws, and other required documents to the SEC. The supporting documents usually include the company’s bank certificate of deposit, treasurer’s affidavit, and proof of inward remittance of the required minimum paid-up capital.
5. Pay the Required Fees: Pay the registration and filing fees to the SEC. The amount varies depending on the authorized capital stock of the company.
6. Obtain the SEC Certificate of Incorporation: Once the SEC approves the application and verifies the submitted documents, they will issue a Certificate of Incorporation. This certificate signifies the official registration of the foreign-funded LLC in the Philippines.
7. Obtain the Mayor’s Permit and Barangay Clearance: After obtaining the SEC Certificate of Incorporation, you need to secure the Mayor’s Permit from the city where the business will be located. You also need to obtain a Barangay Clearance, which is a certification from the local barangay (village) office.
8. Register with Other Government Agencies: Depending on the nature of your business activities, you may need to register with other government agencies such as the Bureau of Internal Revenue (BIR) for tax purposes and obtain any necessary permits or licenses specific to your industry. Examples are City Hall, BIR, SSS, Pag-ibig and Philhealth.
   

   Submit

   https://kittelsoncarpo.com/complete-guide-on-how-to-register-a-business-in-the-philippines/

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What are the requirements for holding a position of director, manager/ supervisor, company secretary, etc. in Philippines’s foreign-funded Limited Liability companies?

1. Director:
   • Must be at least 18 years old.
   • Must be of good moral character and without any disqualifications imposed by law.
   • Must not have been declared bankrupt or convicted of any crime involving moral turpitude.
   • Should possess the necessary skills, expertise, and qualifications relevant to the position.
   • It is common for foreign-funded LLCs to appoint both foreign and local directors to ensure compliance with local regulations.
   • No more than 15 directors, each of whom must own at least 1 share in the capital stock of the corporation, are registered in their name in the books of the company.
2. Manager/Supervisor:
   • There are no specific legal requirements to hold a managerial or supervisory position in a foreign-funded LLC in the Philippines.
   • The qualifications and experience required for managerial or supervisory roles may vary depending on the company’s industry, size, and specific job requirements.
   • It is advisable for managers/supervisors to possess relevant education, experience, and expertise in their respective fields.
3. Company Secretary:
   • Must be a resident and citizen of Philippines.
   • The company secretary is responsible for maintaining corporate records, ensuring compliance with regulatory requirements, and facilitating communication between the company and relevant authorities.
   • The qualifications and experience required for a company secretary may vary based on the company’s specific needs and requirements.

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How long the share capital of a Philippines Foreign-funded Limited Liability Company must be hold before it can be sold?

In the Philippines, there is no specific duration or requirement regarding the minimum holding period for the share capital of a foreign-funded limited liability company (LLC) before it can be sold.
The decision to sell or transfer shares in an LLC is typically determined by the shareholders and governed by the company’s internal policies, shareholders’ agreement, and applicable laws and regulations.

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Is a Resident Shareholders required for incorporation of Foreign-funded Limited Liability Company in Philippines?

No, for the incorporation of a foreign-funded limited liability company (LLC) in the Philippines, it is typically not required to have resident shareholder.

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Is a Resident Director required for incorporation of Foreign-funded Limited Liability Company in Philippines?

No, for the incorporation of a foreign-funded limited liability company (LLC) in the Philippines, it is generally not required to have resident director.
The director can be a Filipino citizen or a foreigner who is a resident of the Philippines.

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Is there a company secretary required for incorporation of Foreign-funded Limited Liability Company in Philippines?

In the Philippines, it is mandatory requirement for a foreign-funded limited liability company (LLC) to have a company secretary during the incorporation process.

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What are the qualifications of a legal representative in Philippines Foreign-funded Limited Liability?
Can a foreigner act as a legal representative?
If yes, he/she need a place of residence in Philippines?

1. Legal Capacity: The legal representative should have the legal capacity to act on behalf of the LLC, enter into contracts, and perform legal obligations.
2. Authority: The legal representative should be duly authorized by the LLC through the company’s Articles of Incorporation, By-Laws, or a power of attorney.
3. Knowledge and Experience: It is desirable for the legal representative to have knowledge and experience in the relevant industry or field of the LLC’s business operations.
   Foreigners can serve as legal representatives, directors, or officers of a foreign-funded LLC.
   However, there may be restrictions or additional requirements depending on the industry or specific business activities.
   It is not a strict requirement for them to have a place of residence in the Philippines.

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Is it possible to establish a Philippines foreign-owned company through an offshore company as holding company?

Yes, it is possible to establish a foreign-owned company in the Philippines using an offshore company as a holding company.
This structure is commonly referred to as an offshore holding company structure.

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What are the special features of Philippines wholly foreign-owned limited liability corporation (LLC)?

1. 100% Foreign Ownership: Unlike in some other countries, the Philippines allows for 100% foreign ownership in certain industries or sectors. This means that a foreign investor can have full ownership and control of the LLC without the need for a local partner or shareholder.
2. Limited Liability: As an LLC, the liability of the shareholders is limited to their capital contribution, protecting their personal assets from the liabilities of the company. This feature provides a level of security and risk mitigation for the foreign investor.
3. Separate Legal Entity: A wholly foreign-owned LLC is considered a separate legal entity from its shareholders. It has its own legal rights, obligations, and liabilities, allowing for distinct legal protection and the ability to enter into contracts, acquire assets, and be party to legal proceedings.
4. Flexibility in Management Structure: The management structure of a wholly foreign-owned LLC can be tailored to the needs and preferences of the investors. They can appoint directors, officers, and managers as per their desired organizational structure, allowing for efficient decision-making and control.
5. Ease of Incorporation: The process of incorporating a wholly foreign-owned LLC in the Philippines has been streamlined and simplified over the years. The government has implemented measures to attract foreign investment and reduce bureaucratic hurdles, making it relatively easier for foreign investors to establish and operate their businesses.

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Philippines Foreign investment: permitted industries, restricted industries (licensed industries) and prohibited industries.
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Are Philippines foreign-investment industries and products be listed in a positive or negative list?
Or are there different approaches for foreign investment from different countries?

The Foreign Investment Act of 1991 (FIA) introduced the concept of the “negative list”.
Under the FIA, the approval of the Philippine Board of Investments (BOI), which is an agency of the Department of Trade and Industry (DTI) responsible for investment promotion, is not required for enterprises that are not seeking incentives.
Foreign investors merely have to consult, and be guided by, the Foreign Investments Negative List (FINL), which is a list of areas in which foreign ownership is limited to a maximum of 40% of the outstanding capital stock of a corporation, or of capital in the case of a partnership.
All areas not on the list are fully open to foreign investors, except where foreign ownership is expressly prohibited, or limited, by the Constitution and existing laws.
Generally, a non-Philippine national may do business or invest in up to 10% of the capital of a domestic enterprise provided:
(i) It is investing in a domestic market enterprise in an area outside the FINL; or
(ii) It is investing in an export enterprise, the products and services of which do not fall within Lists A and B in the FINL.
There are no specific approaches for foreign investment from different countries.

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In the positive list, what are the industries that foreign investment is allowed to invest in, which are the industries that are restricted for foreign investment (licensed industries), and the industries that are prohibited to invest in by foreign investment?
Will the positive list be different for different countries?

The Foreign Investment Act of 1991 (FIA) introduced the concept of the “negative list”.

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In the negative list, what are the industries that foreign investment is allowed to invest in, the industries that are restricted to foreign investment (licensed industries), and the industries that are not allowed to invest in foreign investment?
Will the negative list be different for different countries?

The current FINL categorizes industries into three lists: List A, List B, and the Foreign Investment Act (FIA) Negative List.
List A consists of industries where foreign ownership is limited by the Constitution and other laws.
List B (licensed industries): Foreign Ownership is Limited for Reason of Security, Defense, Risk to Health and Morals, and Protection of Small and Medium Scale Enterprises.
The FIA Negative List identifies activities that are closed for foreign investment.

List A: Foreign Ownership is Limited By Mandate of the Constitution and Specific Laws.
No foreign equity:
• Mass media, except recording and internet business.
• The practice of all professions
• Retail trade enterprises with a paid-up capital of less than USD2.5 million
• Cooperatives
• Organization and operation of private detective, watchmen or security guard agencies
• Small-scale mining
• The unilization of marine resources
• The ownership, operation and mangement of cockpits
• The manufacture, repair and stockpiling and/or distribution of nuclear waspons, biological, chemical, and radiological weapons and anti-personnel mines.
• The manufacture of firecrackers and other pyrotechnic devices
Up to 25% foreign equity:
• Private recruitment, whether for local or overseas employment
• Contracts for the construction of defense-related structures
Up to 30% foreign equity:
• Advertising
Up to 40% foreign equity:
• Contracts for the construction and repair of locally funded public works
• The exploration, development, and utilization of natural resources
• The ownership of private land
• The operation and management of public utilities
• Educational institutions
• The culture, production, miling, processing, and trading
• Contract of supply to GOCCs
• Operation of deep-sea commecial fishing vessels
• The ownership of condominium units
• Private radio communications networks.

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What are the restriction on foreign investment in Philippines? For instance, what is the minimum share capital amount?
What are the rules for foreign shareholding ratio? Other?
Are they different for different countries?

1. Foreign Equity Limitations: Certain industries in the Philippines have foreign equity limitations, meaning there are restrictions on the maximum percentage of foreign ownership allowed in specific sectors. These limitations are listed in the Foreign Investment Negative List (FINL), which categorizes industries into different lists indicating the degree of foreign participation allowed.
2. Constitutional Restrictions: The Philippine Constitution restricts foreign ownership in certain areas deemed sensitive to national security and public welfare. For example, land ownership by foreigners is generally limited to a maximum of 40% for residential purposes and is prohibited for agricultural lands, forests, and natural resources.
3. Economic Restrictions: The Philippines may impose restrictions on foreign investment in certain economic activities to protect domestic industries, promote local employment, or support national economic development goals. These restrictions can include requirements for joint ventures, licensing, or specific capitalization requirements.
4. Specific Industry Regulations: Some industries may have additional regulations or licensing requirements that impact foreign investment. These regulations aim to ensure compliance with industry-specific standards, promote fair competition, and protect consumer interests.
   Regarding the differences for different countries, the investment restrictions and regulations in the Philippines generally apply uniformly to all foreign investors, regardless of their country of origin.

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What are the licensed industries in Philippines?
What is the difference between the industries that allow foreign investment, the industries that restrict foreign investment (licensed industries), and the industries that do not allow foreign investment?

1. Mass Media (e.g., radio, television, print media): Foreign ownership is limited to a certain percentage, typically up to 25% of the total equity.
2. Retail Trade Enterprises with paid-up capital of less than USD 2.5 million: Foreign ownership is limited to 100% if the capital is above the threshold, but below that, foreign investors are required to have a minimum paid-up capital of USD 2.5 million.
3. Education Institutions (e.g., pre-school, elementary, secondary, tertiary education): Foreign ownership is limited to a certain percentage, typically up to 40% of the total equity.
4. Public Utilities (e.g., electricity distribution, water supply, transportation): Foreign ownership is limited to a certain percentage, typically up to 40% of the total equity.
5. Advertising (e.g., advertising agencies): Foreign ownership is limited to a certain percentage, typically up to 30% of the total equity.
   These examples are not an exhaustive list, and the licensed industries can change over time as the Philippine government reviews and updates the Foreign Investment Negative List.

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Philippines-Foreign-funded Limited Liability Company document certification.
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What are the relevant investment documents required to establish a Foreign-funded Limited Liability Company in Philippines?
Are there different documents for different countries?

1. Articles of Incorporation: This document outlines the key details of the company, including its name, purpose, share structure, registered address, and other important provisions. It needs to be notarized and submitted to the Securities and Exchange Commission (SEC).
2. By-laws: The by-laws contain the internal rules and regulations governing the operation and management of the LLC. They need to be notarized and submitted to the SEC.
3. Treasurer’s Affidavit: This affidavit certifies that at least 25% of the authorized capital stock has been subscribed to and that the paid-up capital is not less than the statutory minimum. It needs to be notarized and submitted to the SEC.
4. Foreign Investments Act (FIA) Form: This form provides information about the foreign investor and the proposed investment. It needs to be submitted to the appropriate government agency, such as the SEC or the Board of Investments (BOI).
5. Bank Certificate: A bank certificate is required to demonstrate that the initial paid-up capital has been deposited in a local bank in the Philippines.
   These are the general investment documents required to establish a Foreign-funded LLC in the Philippines.
   However, specific requirements or additional documents may vary depending on the industry, location, and the unique circumstances of the investment.

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What are the procedures for the certification of documents related to the investment of Foreign-funded Limited Liability Company in Philippines?
Are there different document authentication procedures for different countries?

1. Notarization: The original documents, such as the Articles of Incorporation, By-laws, Treasurer’s Affidavit, and Undertaking to Change Corporate Name (if applicable), need to be notarized by a notary public or a lawyer. The notary public will authenticate the documents by affixing their seal or stamp.
2. Consularization/Authentication: After notarization, the documents may need to be consularized or authenticated by the Philippine Embassy or Consulate in the country where the documents were notarized. This process verifies the authenticity of the notary public’s signature and seal.
3. Legalization by the Department of Foreign Affairs (DFA): Once the documents have been consularized or authenticated, they may need to be submitted to the DFA in the Philippines for legalization. The DFA will verify the authenticity of the consular seal and signature.
4. Submission to Relevant Government Agencies: After the documents have been notarized, consularized/authenticated, and legalized by the DFA, they can be submitted to the appropriate government agencies in the Philippines, such as the Securities and Exchange Commission (SEC) or the Board of Investments (BOI).
   The document authentication procedures mentioned above are generally applicable to all foreign investors regardless of their country of origin.
   However, additional steps or requirements may be necessary depending on the specific regulations and agreements between the Philippines and the investor’s home country.

R-ph-llc-4 Philippines – Bank Account Opening of Foreign Subsidiaries
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What is the sequence steps of set up a Foreign-funded Limited Liability Company in Philippines with share capital paid in place and opening a bank account? Which one should come first?

1. Share Capital Payment: Once the incorporation documents are prepared and ready for submission, the share capital should be paid in accordance with the requirements set by the SEC. The capital must be deposited in a local bank in the Philippines in the company’s name. The bank will issue a bank certificate confirming the deposit.
2. Opening a Bank Account: Once the LLC has obtained the Certificate of Incorporation and TIN, it can proceed with opening a bank account in the Philippines. The bank account will be used for day-to-day financial transactions and to manage the company’s funds.
   In general, the share capital payment usually comes before opening a bank account since the capital needs to be in place before funds can be deposited into the account.

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What are the usual KYC regulations when opening a bank account with a Foreign-funded Limited Liability Company in Philippines?

1. Company Documents: You will need to provide the company’s registration documents, such as the Articles of Incorporation, Certificate of Registration, Tax Identification Number (TIN), and SEC (Securities and Exchange Commission) registration documents. These documents are used to verify the legitimacy of the company and its business purpose.
2. Shareholders and Key Management Information: You need to provide identification documents for the company’s shareholders and key management members, such as passports, national IDs, or driver’s licenses. These documents are used to verify the identity and qualifications of key individuals.
3. Proof of Address for Shareholders and Key Management: You will need to provide proof of address documents for the shareholders and key management members, such as utility bills, bank statements, or lease agreements. These documents are used to verify the address and place of residence.
4. Proof of Company’s Business: You need to provide documents related to the company’s business, such as a business plan, contracts, orders, or business permits. These documents are used to demonstrate the company’s operations and business purpose.
5. Commercial Bank Account Application Form: You will be required to fill out the commercial bank account application form provided by the bank, which includes the company’s basic information, business activities, projected fund flows, and other relevant details.

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Will the bank require a Philippines local director when opening a bank account for a Philippines wholly foreign-owned limited liability company (LLC)?

No, the bank generally does not require a Philippines local director when opening a bank account for a Philippines wholly foreign-owned limited liability company (LLC).

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Will the bank require foreign legal representative have to be physically present for the bank interview, when opening a bank account with a Foreign-funded Limited Liability Company in Philippines?

Yes, when opening a bank account with a Foreign-funded Limited Liability Company (LLC) in the Philippines, it is generally required that the foreign legal representative be physically present for the bank interview.

R-ph-llc-5 Philippines – Staff Work Permit, Visa, and Residence
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Can a Foreign-funded Limited Liability Company in Philippines send expatriates to Philippines as the Investor’s role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences in different countries?

Permanent Resident Visas for Investors
Any investor who has made and continues to maintain an investment of not less than US$150,000 in an Ecozone may secure a permanent residency visa from the Philippine Economic Zone Authority (PEZA).
The investor’s spouse and dependent children under 21 years of age also may qualify for this type of visa.
The investor may submit evidence of investment, which may be in the form of:
(i) The establishment of an Ecozone enterprise or other direct investment in the Ecozone.
(ii) A cash grant or interest-free loan to the PEZA or to an Ecozone enterprise for purposes of capital improvements to be made by the recipient in the Ecozone.
(iii) The purchase of an Ecozone; and
(iv) A donation in kind to the PEZA or an Ecozone enterprise of equipment or materials for capital improvement purposes.
Temporary Work and Residency Visas
Temporary work visas are issued by the PEZA to foreign nationals who possess executive or highly technical skills not possessed by a Filipino citizen within an Ecozone as certified by the DOLE.
Such visas are valid and renewable every two years.
On the other hand, temporary residency visas may be issued by the PEZA to any foreign national to whom a work visa has been issued and to his or her spouse and dependent children under 21 years of age.
The temporary residency visas are valid for residence either inside the Ecozone or the customs territory during the period of validity of the work visa.
Special Investor’s Resident Visa
Foreigners who invest at least US$75,000 in the Philippines, and their respective spouses and unmarried minor children under 21 accompanying or following to join them after their admission into the Philippines, on a Special Investor’s Resident Visa (SIRV), are entitled to reside in the Philippines for an indefinite period as long as the investment of at least US$75,000 subsists.
Any foreigner who meets the following qualifications may be issued an SIRV:
(i) The foreigner may not have been convicted of a crime involving moral turpitude.
(ii) The foreigner may not be afflicted with any dangerous or contagious disease.
(iii) The foreigner may not have been institutionalized for any mental disorder, or disability; and
(iv) The foreigner must be willing and able to invest the amount of at least US$75,000 in the Philippines.
The SIRV is automatically revoked if the investor withdraws his investment from the Philippines or reduces it below the value of US$75,000.

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Can a Foreign-funded Limited Liability Company in Philippines send expatriates to Philippines as the employee role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences for different countries?
Foreigners required to obtain a work permit in the Philippines to be eligible to apply for a work visa.
There are 3 work permits in Philippines:

1. Alien Employment Permit (AEP)
2. Special Work Permit (SWP)
3. Provisional Work Permit (PWP)
   Employment Visa
   The procedure to obtain a work visa, in general, will involve the following:
   (a) First, securing an AEP from DOLE
   (b) After the release of the AEP, filing the work visa application with the BI (or the relevant government agency)
   (c) Attending a hearing before an immigration officer, if required
   (d) Releasing of the immigration order granting the work visa
   (e) Stamping of the visa on the employee’s passport
   The most common type of work visa issued in the Philippines is the 9 (G) visa, also known as Pre-arranged Employment Vsa.
   

   Submit

   https://www.aseanbriefing.com/news/guide-employment-permits-foreign-workers-philippines/
   https://www.syciplaw.com/documents/LegalResources/2020/SyCipLaw%20-%20Doing%20Business%20in%20the%20Philippines%20(A%20General%20Guide)%20(updated%20June%2012%202020).pdf

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What are the evaluation factors or requirements for a Foreign-funded Limited Liability Company in Philippines when applying work permit, visa, and residence permit?
What is the relationship with the salary, capital, and turnover of Foreign-funded Limited Liability Company?
Are there differences for different countries?

1. Job Position and Qualifications: The job position and qualifications of the foreign employee are assessed to ensure that they meet the requirements for the specific role in the company. The educational background, work experience, and skills of the employee are considered.
2. Labor Market Test: In some cases, the company may be required to conduct a labor market test to demonstrate that there are no available qualified local candidates for the position being filled by the foreign employee. This is to ensure that local employment opportunities are given priority.
3. Compliance with Quota and Capital Requirements: The Philippines has regulations and quotas in place regarding the employment of foreign nationals. The company needs to comply with these requirements, which may include maintaining a certain minimum level of capital investment.
4. Salary and Benefits: The salary and benefits offered to the foreign employee should be in accordance with Philippine labor laws and industry standards. It should be at par with or higher than the prevailing rates for similar positions in the Philippines.
5. Company’s Financial Standing: The financial standing of the Foreign-funded LLC, including its capital, turnover, and financial viability, may be taken into consideration during the evaluation process. This is to ensure that the company has the financial capacity to support the employment of foreign workers.
   Regarding the relationship with salary, capital, and turnover, these factors can influence the approval of work permits, visas, and residence permits in various ways:
6. Salary: The salary offered to the foreign worker must generally meet the minimum wage requirements set by the government and be in line with industry standards.
7. Capital: The company’s capitalization may be considered as an indicator of its financial stability and ability to sustain the employment of foreign workers.
8. Turnover: The company’s turnover (revenue) can demonstrate the business’s financial health and capability to generate income to support its operations, including employing foreign workers.
   The specific requirements and evaluation factors may vary depending on the country of origin of the foreign employee.
   Some countries may have bilateral or regional agreements with the Philippines that provide special visa treatment or exemptions for their citizens.

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Philippines- Registered Address and Operating Address of Foreign-funded Limited Liability Company in Philippines.
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What are the regulations on the registered address during the company registration and future operating address of a Foreign-funded Limited Liability Company in Philippines?

Registered Address:

1. Registered Office: The LLC is required to have a registered office address in the Philippines. This address will be used for official correspondence and legal purposes. It must be a physical address and cannot be a post office box.
2. Proof of Address: The LLC needs to provide documentary proof of the registered office address, such as a lease agreement, utility bills, or property ownership documents. This is to verify the authenticity and availability of the registered office.
   Future Operating Address:
3. Business Location: The LLC can choose its operating address or business location within the Philippines. This is where the company will carry out its day-to-day business activities.
4. Compliance with Zoning Laws: The chosen operating address must comply with local zoning laws and regulations. Certain areas may have specific zoning restrictions or requirements for certain types of businesses.

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What are the specific regulations or requirements of a registered office address for a permitted industry of an LLC in Philippines?

1. Physical Address: The registered office address must be in a physical location and cannot be a post office box or virtual office.
2. Zoning Compliance: The registered office address should comply with local zoning regulations and be suitable for the permitted industry. Certain areas may have restrictions on specific types of businesses or require additional permits or clearances.
3. Accessibility and Legitimacy: The registered office should be easily accessible and verifiable. It should be a place where the LLC can be reached for official correspondence and legal purposes.
4. Documentation: The LLC is typically required to provide documentary proof of the registered office address, such as a lease agreement, utility bills, or property ownership documents.

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Amount of investment, registered capital, and government fees for Foreign-funded Limited Liability Company in Philippines.
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Are there any regulations on authorized share capital, registered share capital and paid-up share capital of a Foreign-funded Limited Liability Company in Philippines?
Is there any requirement for minimum funds to be in place within a certain period?

1. Authorized Share Capital: The authorized share capital refers to the maximum amount of capital that the company is authorized to issue to its shareholders. It is specified in the company’s Articles of Incorporation. There is no specific minimum or maximum requirement for the authorized share capital, but it should be determined based on the company’s financial needs and business plans.
2. Registered Share Capital: The registered share capital is the portion of the authorized share capital that is subscribed to and stated in the company’s Articles of Incorporation. It represents the total value of the shares that have been allocated or issued to shareholders.
3. Paid-up Share Capital: The paid-up share capital refers to the actual amount of capital that shareholders have fully paid for their subscribed shares. It represents the portion of the registered share capital that has been paid by the shareholders.

Philippines does not have a specific requirement for the minimum capital to be fully paid-up within a certain timeframe for Foreign-funded LLCs.

Minimum share capital for LLC In Philippines is USD 200,000 for domestic market enterprise, or USD 100 for a export market enterprise who intends to export more than 60% of its products.

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What is the relation between government fees with authorized share capital, registered share capital, and paid-up share capital of a Foreign-funded Limited Liability Company in Philippines?

1. Authorized Share Capital: The authorized share capital represents the maximum amount of capital that the company is authorized to issue to its shareholders. The government fees, such as the filing fees and annual fees, are often calculated based on the authorized share capital or a predetermined fixed fee schedule.
2. Registration Fees: When incorporating an LLC in the Philippines, there are registration fees that need to be paid to the Securities and Exchange Commission (SEC) and other government agencies. These fees are generally based on the authorized share capital or a fixed fee schedule set by the government.
3. Annual Fees: LLCs in the Philippines are required to pay annual fees to the SEC. The annual fees may also be calculated based on the authorized share capital or a fixed fee schedule determined by the government.

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Application of Certificate Number for a Foreign-funded Limited Liability Company in Philippines
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What are the company certificate numbers needed to apply with the relevant legal entities for a foreign-funded Limited Liability Company in Philippines?

1. Securities and Exchange Commission (SEC) Certificate Number: The SEC is the primary regulatory body for companies in the Philippines. When you register your LLC with the SEC, you will receive a certificate of incorporation or registration, which includes a unique SEC certificate number.
2. Tax Identification Number (TIN): The TIN is a unique identification number issued by the Bureau of Internal Revenue (BIR). It is required for tax-related purposes, including filing tax returns and obtaining tax clearances. You will need to obtain a TIN for your LLC, and this number will be used in your interactions with the BIR.
3. Social Security System (SSS) Number: The SSS is responsible for the administration of social security benefits in the Philippines. As an employer, your LLC will need to register with the SSS and obtain an employer number. This number will be used for your company’s contributions to the social security system.
4. PhilHealth Number: The Philippine Health Insurance Corporation (PhilHealth) provides health insurance coverage to employees in the Philippines. Your LLC will need to register with PhilHealth and obtain an employer number. This number will be used for your company’s contributions to the health insurance system.
5. Pag-IBIG Fund Number: The Home Development Mutual Fund (Pag-IBIG Fund) is a government housing and provident fund in the Philippines. Your LLC will need to register with Pag-IBIG and obtain an employer number. This number will be used for your company’s contributions to the fund.

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What are the certificate application for the Foreign-funded Limited Liability Company in Philippines as a tax entity?

1. Tax Identification Number (TIN): The TIN is a unique identification number issued by the Bureau of Internal Revenue (BIR). It is required for tax registration and reporting purposes. You will need to apply for a TIN for your LLC, and this can be done through the BIR.
2. Certificate of Registration (COR): After obtaining your TIN, you will need to apply for a Certificate of Registration (COR) as a tax entity. This is typically done through the BIR and involves submitting the necessary documents, such as the company’s Articles of Incorporation, TIN, and other supporting documents.
3. Books of Accounts Registration: LLCs in the Philippines are required to maintain books of accounts for recording financial transactions. You will need to apply for Books of Accounts registration with the BIR, which involves submitting the necessary forms and documents.
4. Official Receipts and Sales Invoices (OR/SI) Registration: If your LLC engages in the sale of goods or services, you will need to register for Official Receipts and Sales Invoices (OR/SI) with the BIR. This involves applying for a Permit to Use Computerized Accounting System (CAS) and obtaining a Principal Receipts and Invoices (PRI) Authority.
5. Value Added Tax (VAT) Registration (if applicable): If your LLC meets the threshold for VAT registration, you will need to apply for VAT registration with the BIR. This involves submitting the necessary documents and complying with VAT-related requirements.

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What are the certificate application for Foreign-funded Limited Liability Company in Philippines in relation to withholding tax on salary and employee benefits?

1. Tax Identification Number (TIN): The TIN is a unique identification number issued by the Bureau of Internal Revenue (BIR). Your LLC will need to obtain a TIN for tax purposes, including the withholding of taxes on employee salaries and benefits.
2. Certificate of Registration (COR): As an employer, your LLC will need to apply for a Certificate of Registration (COR) with the BIR. This certificate establishes your LLC as a withholding agent and allows you to withhold taxes on employee compensation.
3. Certificate of Compensation Payment/Tax Withheld (BIR Form 2316): This certificate is issued by the employer (LLC) to its employees. It summarizes the compensation received and the taxes withheld during the calendar year. It is provided to employees for their income tax return filing.
4. Monthly Remittance Returns (BIR Form 1601C/1601E): These are monthly returns filed by the employer (LLC) with the BIR to report the total compensation paid to employees and the taxes withheld during the month.
5. Annual Information Returns (BIR Form 1604CF/1604E): These are annual returns filed by the employer (LLC) with the BIR, summarizing the compensation paid to employees and the taxes withheld for the entire year.

Registration government agencies includes Department of Labor and Employment (DOLE), Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth) and Home Development Mutial Fund (Pag-IBIG Fund).

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What are the other independent certificate numbers or application, or declaration related to the government’s jurisdiction for Foreign-funded Limited Liability Company in Philippines?

1. Business Name Registration Certificate: If your LLC operates under a business name different from its legal name, you may need to register the business name with the Department of Trade and Industry (DTI) and obtain a Business Name Registration Certificate.
2. Barangay Clearance: A Barangay Clearance is a certificate issued by the local Barangay (village) where your LLC is located. It verifies that your business complies with local regulations and can operate within the Barangay’s jurisdiction.
3. Mayor’s Permit: The Mayor’s Permit, also known as a Business Permit, is issued by the local government unit (LGU) where your LLC is located. It grants permission to operate the business within the jurisdiction of the LGU and typically requires the submission of various documents and payment of fees.
4. Environmental Compliance Certificate (ECC): If your LLC operates in an environmentally sensitive industry, you may need to obtain an ECC from the Department of Environment and Natural Resources (DENR). This certificate ensures compliance with environmental laws and regulations.
5. Special Permits/Licenses: Depending on the nature of your LLC’s business activities, you may need to obtain additional special permits or licenses from relevant government agencies. Examples include permits for specific industries such as food, healthcare, construction, or transportation.

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To summarize: Which of the following certificate numbers do Foreign-funded Limited Liability Company in Philippines need to apply for?

National (federal) company certificate number, provincial (state) company certificate number, national (federal) tax certificate number, provincial (state) tax certificate number, national value-added tax certificate number, provincial (state) value-added tax certificate number, social insurance card number, medical insurance card number, pension certificate number, other funds such as housing fund certificate number, labor union certificate number, import and export certificate number, and franchise industry certificate number.

1. National (Federal) Company Certificate Number: This refers to the certificate of registration issued by the Securities and Exchange Commission (SEC) at the national level.
2. National (Federal) Tax Identification Number (TIN): This is the unique tax identification number issued by the Bureau of Internal Revenue (BIR) at the national level.
3. Social Insurance Card Number: This pertains to the identification number issued by the Social Security System (SSS) for social insurance purposes.
4. Medical Insurance Card Number: This refers to the identification number issued by the Philippine Health Insurance Corporation (PhilHealth) for medical insurance purposes.
5. Pension Certificate Number: This applies to the pension or retirement fund certificate number issued by the Government Service Insurance System (GSIS) or any private pension fund provider.
6. Other Funds Certificate Numbers: These may include certificate numbers for other funds such as the Home Development Mutual Fund (Pag-IBIG Fund) for housing fund purposes and labor union certificate number for membership in a labor union.

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Incorporation procedures of Philippines-Foreign-funded Limited Liability Company and key matters
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What are the procedures of setting up a Foreign-funded Limited Liability Company in Philippines? Documents required? Competent Government unit? Websites?

1. Choose a Business Name: Select a unique business name that is not already registered by another entity in the Philippines.
2. Prepare the Articles of Incorporation and By-Laws: Draft the Articles of Incorporation and By-Laws of the LLC. These documents outline the company’s purpose, capital structure, ownership details, and internal regulations.
3. Notarize the Articles of Incorporation and By-Laws: Have the Articles of Incorporation and By-Laws notarized by a notary public in the Philippines.
4. Secure the Bank Certificate: Obtain a bank certificate proving that the paid-up capital of the LLC has been deposited in a bank in the Philippines.
5. Accomplish the Application Forms: Complete the necessary application forms, which may include forms for registration, taxation, and other relevant permits.
6. Submit the Documents: Submit the required documents, including the Articles of Incorporation, By-Laws, bank certificate, and application forms, to the Securities and Exchange Commission (SEC), which is the competent government unit for registering corporations in the Philippines.
7. Pay the Filing Fees: Pay the applicable filing fees to the SEC upon submission of the documents.
8. Attend the SEC Hearing: Attend the hearing scheduled by the SEC for the evaluation and approval of the application.
9. Obtain the Certificate of Registration: Once the application is approved, the SEC will issue a Certificate of Registration, officially establishing the Foreign-funded LLC.
10. Obtain Other Required Permits: Depending on the nature of the business, additional permits and licenses may be required from various government agencies at the national or local level.

For more detailed information and access to the necessary forms and guidelines, you can visit the official website of the Securities and Exchange Commission (www.sec.gov.ph) and other relevant government agency websites such as the Department of Trade and Industry (www.dti.gov.ph) and Bureau of Internal Revenue (www.bir.gov.ph).

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What are key consideration matters of when deciding to set up foreign-funded limited liability company in Philippines?

1. Market Potential: Assess the market potential and demand for your products or services in the Philippines. Consider the competition, target market, and growth prospects.
2. Legal and Regulatory Environment: Understand the legal and regulatory framework for foreign investment in the Philippines. Familiarize yourself with the relevant laws, restrictions, and compliance requirements.
3. Business Structure: Determine the most suitable business structure for your operations in the Philippines. Evaluate the advantages and disadvantages of different structures, such as an LLC, branch office, or representative office.
4. Investment and Operational Costs: Consider the investment and operational costs involved in setting up and running the business. Evaluate factors such as office space, labor costs, utilities, taxes, and other expenses.
5. Local Partner or Agent: Assess the need for a local partner or agent to navigate local regulations and cultural nuances. In certain industries, having a local partner may be a legal requirement.
6. Intellectual Property Protection: Understand the intellectual property laws in the Philippines and ensure adequate protection for your trademarks, patents, copyrights, or trade secrets.
7. Access to Resources: Evaluate the availability of skilled labor, suppliers, logistics, and infrastructure to support your business operations in the Philippines.
8. Taxation and Incentives: Consider the tax implications and potential incentives for foreign investors in the Philippines. Familiarize yourself with the tax rates, exemptions, and incentives applicable to your business.
9. Government Support and Stability: Assess the government’s support for foreign investment, economic stability, and political climate in the Philippines. Stay updated on any policy changes or developments that may impact your business.
10. Long-Term Business Strategy: Develop a long-term business strategy for your foreign-funded LLC in the Philippines. Consider factors such as market expansion, scalability, partnerships, and exit strategies.

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