Think of the Philippines as your strategic entry point into the ASEAN market.
The Philippines is a fast-growing economic powerhouse in Southeast Asia. Its young, skilled workforce, prime location, and investor-friendly policies offer businesses a strategic gateway to expansion.
With thriving IT, manufacturing, and services industries, the country presents a compelling opportunity for companies vying to strengthen their global footprint. While setting up a business in the Philippines unlocks access to these advantages, the registration process can be intricate and requires a clear understanding of regulatory requirements.
Through this guide, we outline clear steps to register your company in the Philippines, highlight the benefits of establishing a business in the country, and explore alternatives like using an Employer of Record (EOR) to simplify market entry.
The business benefits of registering your company in the Philippines
Expanding your business to the Philippines has many advantages and is a prime location for growth and investment.
- Access to new markets. As a gateway to the ASEAN region, the Philippines provides access to a thriving market of over 680 million consumers.
- Skilled workforce. The country boasts a young, highly skilled labor force with strong English proficiency, making it ideal for global operations.
- Government incentives. Foreign investors can benefit from tax holidays, duty-free importation, and business-friendly policies.
- Cost efficiency. Lower labor and operational costs compared to other Southeast Asian countries allow businesses to optimize expenses without compromising quality.
- Favorable tax regime. Businesses in priority industries, such as manufacturing, IT, and renewable energy, can benefit from a range of incentives under government programs like the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Registering your company in the Philippines can diversify revenue streams, reduce operational costs, and gain a competitive edge in the region. In the next section we discuss your options for expanding your presence here.
Standard company registration or an EOR: Which is best for business expansion in the Philippines?
When expanding to the Philippines, you can choose between standard company registration or partnering with an Employer of Record (EOR).
Here’s a comparison:
Aspect | Standard Registration | EOR |
Purpose | Establish a legal entity in the Philippines | Operate without the need to set up a local entity |
Control | Maintain complete control and responsibility over operations | EOR manages compliance and payroll responsibilities |
Cost | High setup costs and unpredictable ongoing expenses | Lower set up costs, predictable fees |
Compliance | Is your responsibility | Is handled by the EOR |
Setup time | Takes a few months | Takes a few days or weeks |
Scalability | Requires entity restructuring | Is easy to scale |
An EOR is an ideal solution for businesses seeking quick market entry while avoiding the complexities and risks of entity setup.
How EOR simplifies Philippines company registration
With an EOR like Multiplier you need not establish a local entity in the Philippines. It also simplifies hiring, compliance, and administrative tasks for you.
The benefits include:
- Streamlined setup: No need to register a legal entity, hire legal partners in the Philippines, or navigate complex regulations here.
- Payroll and tax management: The EOR handles payroll processing, tax deductions, and filings.
- Compliance assurance: Ensures adherence to local labor laws and regulations.
- Cost savings: Eliminates setup costs and reduces administrative expenses.
- Workforce scalability: Easily hire and manage employees without entity constraints.
- Risk mitigation: Reduces legal and financial risks associated with non-compliance.
By partnering with an EOR, businesses can focus on growth while leaving the administrative burdens to experts. It can help you begin operations in the Philippines faster while avoiding the many steps involved in registering your company here.
A step-by-step guide to registering a company in the Philippines
Registering a company in the Philippines involves several steps. Here’s a simplified guide:
1. Reserve a company name
Check name availability by utilizing easily available online resources such as the Business Name Registration System created by the government.
2. Prepare required documents
You must provide a host of documents to confirm your business’s legitimacy in operating in the Philippines. These documents include:
- Articles of Incorporation and By-Laws (for corporations).
- Proof of address and Treasurer’s Affidavit.
- Tax Identification Number (TIN) of incorporators.
3. Register with the SEC
Once you have gathered these documents, you must submit them and pay registration fees to the SEC. After this, you would obtain a Certificate of Incorporation.
4. Secure local business permits
Local business permits allow you to run your business in compliance with the government. To proceed further, apply for a Mayor’s Permit and Barangay Clearance.
5. Register with the BIR
The next step is to register with the Bureau of Internal Revenue (BIR). This process involves obtaining a Tax Identification Number (TIN), which is mandatory for all businesses in the Philippines. You’ll also need to attend a BIR seminar to learn about your tax obligations, invoicing requirements, and other compliance matters.
6. Register with the BOLE
The Bureau of Local Employment (BOLE) supervises labor law compliance in the Philippines. Any business with 50 or more employees must register with DOLE to ensure compliance. If your business is under that limit, however, you may skip this step (though the government does encourage it.)
7. Register with other government agencies
You must enroll your employees with key government agencies such as the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG). These agencies provide essential benefits for your employees, such as retirement savings, health insurance, and housing loans.
Enrollment is mandatory for all employees, with employers responsible for remitting monthly contributions. This ensures compliance with labor laws while contributing to employee welfare and financial security.
8. Open a corporate bank account
To establish your business in the Philippines, you must open a corporate bank account here. You will use this account to deposit the required paid-up capital, ensuring compliance with local business regulations.
If you feel overwhelmed by the vast number of steps involved or are want a faster and simpler alternative, consider using an EOR to bypass these steps entirely.
But first, let’s explore the potential expenses you may incur while registering your company in the Philippines.
The real cost of registering a business in the Philippines
Understanding the costs of registering a business is crucial for planning regardless of which market you’re entering.
Here’s a breakdown of typical expenses based on the Philippines SEC guidelines for businesses:
Registration costs
Your registration costs include SEC filing fees, which the SEC charges based on the maximum aggregate price of securities to be offered.
For example:
- For securities not exceeding ₱500 million: 0.10% of the maximum aggregate price + 1% Legal Research Fee (LRF).
- For securities exceeding ₱1 billion: ₱812,500 plus 0.025% of the excess over ₱1 billion + 1% LRF.
- For short-term commercial papers not exceeding ₱250 million: 0.10% of the maximum aggregate price + 1% LRF.
- For investment companies: ₱10,000.
The SEC also provides a fee calculator for more accurate estimates.
Notarization and legal fees
These are typically charged by private law firms and can vary significantly depending on the complexity of the business structure.
State fees
SEC registration fees
These are standardized and vary depending on the type of business entity and authorized capital stock. For example:
- Short-form registration statement: ₱150,000 or 0.10% of the maximum aggregate price of securities, whichever is higher.
- Amended registration statement: ₱12,000.
The SEC provides a clear cost breakdown of the state fees on their official site as well.
Share capital
Minimum capital requirements
Foreign-owned companies are required to meet minimum capital requirements, which vary by industry. The minimum paid-up capital for a wholly foreign-owned corporation is typically $200,000, but this can be lower for certain industries under the Foreign Investments Act.
Legal services
Legal fees are not set by the government These fees can vary largely depending on the legal firm you employ and the type of business you run.
Annual maintenance costs
Accounting
Businesses must file annual financial statements with the SEC and renew permits with local government units (LGUs). Private firms typically charge accounting fees and can vary from firm to firm.
Permit renewals
Permit renewal fees are set by LGUs and vary depending on the location and size of the business.
Additional costs
- Listing fees: ₱2500
- Certification Fee for Registration or Non-Registration of Securities: ₱500
- Complaints/Petitions: ₱2000
- Request for Confidential Treatment and every request for extension of Confidential Treatment: ₱50,000/per information and per company
- Any other filing made requiring action by the Department: ₱2000
While the costs listed above can vary, an EOR offers a predictable fee structure and helps you eliminate most setup costs.
Cost comparison: standard registration vs. EOR
Here’s a side-by-side comparison of costs when comparing a local entity set up in the Philippines versus using an EOR:
Cost category | Standard Registration | EOR |
Setup costs | High (₱50,000–₱500,000 for legal and filing fees) | Single, bundled fee |
Compliance | Ongoing, complex | Included |
Accounting | Ongoing, ₱50,000–₱150,000 annually | Included |
Payroll | Ongoing, separate fees | Included |
Time to market | Months | Days to weeks |
As you can see, an EOR provides predictability and reduces expenses, making it a viable alternative for businesses seeking cost-efficient market entry. Moreover, it can also reduce the burden of compliance and administration for your HR teams. Let’s discover how.
Take the stress out of your Philippines expansion with Multiplier
Expanding your business into the Philippines presents incredible opportunities, but navigating the intricacies of local employment laws, payroll, and HR can be a significant hurdle.
Multiplier, a leading global EOR, eliminates these complexities, allowing you to tap into the Philippines market, effortlessly. We act as your local HR partner, handling all the administrative and compliance burdens so you can focus on what truly matters: growing your business.
Multiplier helps your business thrive in the Philippines by:
- Eliminating your need to establish a local legal entity and streamlining hiring.
- Generating employment contracts that comply with the latest Philippine labor laws, ensuring legal protection for both your company and your employees.
- Ensuring accurate and timely payroll processing, eliminating the risk of costly errors.
- Handling all local tax filings and contributions, ensuring compliance with the Philippine tax regulations.
- Designing your benefits package to suit top talent and ensuring it is competitive in local market standards.
Ready to simplify your Philippines expansion? Book a Demo with Multiplier today and take the first step toward hassle-free global growth.
