If you already run a company abroad and want to sell in the Philippines, a branch office is the most direct way in. Instead of incorporating a new company, your existing company applies to the Securities and Exchange Commission (SEC) for a license to do business.
Once the license is issued, the branch can sign contracts and invoice customers under the parent's name. Below, we walk you through what a branch office requires, how the registration works, what you will owe in tax once it is running, and how it compares with setting up a subsidiary.
Requirements for a Branch Office in the Philippines
Before you can apply for a license, your company needs to meet several requirements set out in the Revised Corporation Code of the Philippines (Republic Act No. 11232) and the Foreign Investments Act. Here is what the SEC will look for.
1. An Eligible Business Activity
A branch can only carry on the same line of business as its parent company. It cannot take up a new activity locally that the parent does not do abroad. That activity must also be open to foreign ownership.
The Foreign Investment Negative List closes or caps foreign participation in mass media, small-scale retail, certain professions and a short list of other sectors. If your activity is on the list, a branch is not available and you will need a domestic corporation with the required Filipino ownership.
The SEC also checks for reciprocity. Your home country must allow Philippine companies to do business there. You must confirm this in a sworn certificate as part of the application.
2. Minimum Capital
How much capital you need to bring in depends on who your customers will be. The thresholds are set by the Foreign Investments Act (Republic Act 7042, as amended by RA 11647), and they work as follows.
| Scenario | Minimum assigned capital |
|---|---|
| You sell to customers in the Philippines | USD 200,000 |
| Same, but you use advanced technology certified by DOST, are a registered startup or startup enabler, or employ at least 15 Filipino staff | USD 100,000 |
| At least 60% of your output is exported | No statutory minimum; a nominal PHP 5,000 for SEC filing |
| You sell consumer goods directly to Filipinos (retail) | PHP 25 million, plus PHP 10 million per physical store |
The export route is why the branch structure is common for IT support teams, software development centres, BPO back offices and shared service centres. If most of your billing goes to overseas clients or to the parent, the USD 200,000 requirement does not apply.
Retail is governed by the Retail Trade Liberalization Act (RA 11595). The PHP 25 million minimum applies whether you sell through physical stores or online. The earlier requirements for a Board of Investments pre-qualification certificate and a retail track record abroad have been removed.
The capital must be remitted into a Philippine bank account during registration, and the bank's certificate of inward remittance goes to the SEC as proof. Our guide to reducing paid-up capital covers each pathway in more detail.
3. Documents from the Parent Company
The SEC needs proof that the parent exists, is in good standing, and has decided to open a branch. You will need:
- Certified copies of the parent's articles of incorporation and bylaws
- Audited financial statements for the most recent fiscal year
- A board resolution authorising the Philippine branch and appointing the resident agent
- The reciprocity certificate mentioned above
Documents issued abroad must be apostilled by the designated authority in the parent's home country. If that country is not a party to the Apostille Convention, the documents go through consular legalisation at the Philippine embassy or consulate instead. Apostille and legalisation can take several weeks, so start them early.
4. A Resident Agent
Every branch must appoint a resident agent, either an individual residing in the Philippines or a domestic corporation. The agent receives legal notices and court summons on behalf of the parent, which is what gives Philippine courts jurisdiction over the branch.
The agent does not need to be a Filipino citizen, only a resident. If the agent leaves or resigns, you must appoint a replacement and notify the SEC promptly, or the license can be suspended. Emerhub can act as your resident agent if you do not have a suitable person locally.
5. A Registered Address
You need a business address in the Philippines for the SEC license, tax registration and local permits. Local government inspectors and tax officers use it for site visits, so it must be real premises, whether leased or a serviced office.
Step-by-step Branch Registration Process
Registering a branch office involves three government bodies:
- The SEC issues the license to do business
- The Bureau of Internal Revenue registers the branch as a taxpayer
- The city or municipality issues the permits you need to operate from your address.
If your parent company's documents are complete and apostilled when you file, the whole process usually takes one to two months.
Step 1: Reserve the Branch Name
The branch trades under the parent's name followed by "Philippine Branch" or "Philippines Branch". The SEC checks the name against existing registrations and reserves it for you. This step usually takes a day or two.
Step 2: File the License Application with the SEC
The license application is the main filing. It includes submitting the following documents:
- Parent's apostilled documents
- Board resolution
- Resident agent's written acceptance
- Reciprocity certificate
- Statement of the minimum your company’s minimum capital
The SEC reviews the file and may come back with questions.
then issues the License to Do Business. The license is what allows the branch to sign contracts and invoices in the Philippines.
Step 3: Open a Bank Account and Remit the Capital
With the license in hand, you open a corporate bank account in the branch's name and remit the assigned capital from abroad.
The bank issues a certificate of inward remittance, which you file with the SEC to complete the capital requirement. Banks have their own onboarding requirements for foreign-owned accounts, which our guide to opening a business bank account explains.
Step 4: Register with the Bureau of Internal Revenue
The branch obtains its tax identification number, registers its books of account and invoicing system, and registers for VAT if it will sell goods or services locally. This step also sets the branch's filing calendar, which is covered in the tax section below.
Step 5: Obtain local permits
Every business needs a barangay clearance and a Mayor's Permit from the city or municipality where it is located. The local government may inspect the premises before issuing the permit.
Step 6: Register as an employer
Before hiring the first employee, the branch registers with the Social Security System, PhilHealth and Pag-IBIG. Foreign staff additionally need a work visa, typically the 9(g) commercial working visa, and an Alien Employment Permit.
Step 7: Lodge the securities deposit
Within 60 days of receiving the SEC license, the branch must deposit securities with the SEC worth at least PHP 500,000. The deposit protects Philippine creditors and employees, and the SEC holds it until the branch closes.
The SEC accepts government securities and listed shares. The current list of acceptable instruments is set by SEC circular, so confirm it before you buy.
Tax and Compliance Responsibilities of a Branch Office
For tax purposes, a branch is a resident foreign corporation. It pays tax only on income from Philippine sources, calculated the same way as a domestic company's.
Corporate Income Tax
Corporate Income Tax is 25% of net taxable income. The 20% rate available to small domestic corporations does not apply to branches. A 20% rate is available to registered business enterprises under the enhanced deductions regime introduced by CREATE MORE, but only on income from registered activities.
Minimum Corporate Income Tax
From the fourth taxable year after the branch starts business, it pays 2% of gross income whenever that figure is higher than the regular tax. The excess can be carried forward against regular tax for the next three years.
Branch Profit Remittance Tax
When the branch sends profits to the parent, 15% is withheld on the amount remitted or earmarked for remittance. This applies on top of the 25% income tax already paid, so the combined tax on repatriated profit is often higher for a branch than for a subsidiary. ]
If the parent is resident in a country with a tax treaty with the Philippines, a lower rate may apply. Branches registered with PEZA are exempt from qualifying activities.
VAT
12% on sales of goods and services in the Philippines, unless a specific exemption applies.
Ongoing Filings
The branch files audited financial statements and a general information sheet with the SEC each year. Income tax, VAT and withholding returns with the BIR on the standard calendar.
If gross income in a year exceeds PHP 10 million, an additional securities deposit of 2% of the excess is due to the SEC. Missed filings attract penalties and can put the SEC license at risk, so build the compliance calendar in from the start.
Because the remittance tax changes the economics of a branch, it is advisable to model the combined tax on your expected profits and compare it with a subsidiary before you commit. Our local team can run the comparison for your figures.
Branch Office vs Subsidiary vs Representative Office
A branch office is usually the quickest structure to set up, but it is not always the right one for what you plan to do. If your activity is restricted for foreign ownership, you cannot use a branch at all.
If you intend to own property, take on local investors, or keep the parent company insulated from local risk, a subsidiary will serve you better. And if you only need a local presence for marketing and client support without invoicing anyone, a representative office is simpler and cheaper to run.
The table below sets out how the three structures compare.
| Branch office | Subsidiary (domestic corporation) | Representative office | |
|---|---|---|---|
| Legal status | Extension of the foreign parent | Separate Philippine company | Extension of the foreign parent |
| Can earn revenue in the Philippines | Yes | Yes | No |
| Foreign ownership | 100%, if the activity is open to foreigners | Up to 100%, depending on the activity | 100% |
| Parent liability | Unlimited | Limited to its shareholding | Unlimited, but no commercial activity |
| Tax on profits sent abroad | 15% branch profit remittance tax | 15% to 25% withholding on dividends, depending on treaty | Not applicable |
| Can own land | No | Yes, if at least 60% Filipino-owned | No |
| Minimum capital | USD 200,000, with reductions | USD 200,000, with the same reductions | USD 30,000 annual funding from parent |
For most foreign companies, the decision comes down to a branch or a subsidiary. A branch is faster to set up and keeps everything under the parent's name and control.
A domestic corporation takes a little longer and needs its own board and shareholders, but it limits the parent's exposure and leaves you free to own property or bring in local investors later. The tax on profits sent home also differs, so it is worth running both options against your projected figures before you choose.
Our guides to company registration in the Philippines and representative offices explain the other two structures in detail.
Setting Up Your Branch Office with Emerhub
We handle branch registration end to end: name reservation, preparing and filing the SEC application, acting as resident agent where needed, bank account opening, BIR registration, local permits and the securities deposit. Before any of that, we can help you decide whether a branch or a subsidiary fits your plans better, using your own revenue and repatriation figures.
Book a 30-minute call with our team in Manila and we will walk through your situation.
Frequently asked questions
Can a branch office in the Philippines be 100% foreign-owned?
Yes, provided the activity is open to foreign ownership. A branch is the foreign parent itself, so there are no shares to allocate to local partners.
What happens if the branch has no resident agent?
Operating without one breaches the Revised Corporation Code and can lead to fines, suspension or revocation of the SEC license. If your agent resigns or leaves the country, appoint a replacement and notify the SEC straight away.
Can a branch office buy land?
Foreign entities cannot own private land in the Philippines. A branch can lease land and buildings on long-term contracts. If you need to own land, you will need a domestic corporation that is at least 60% Filipino-owned.
How does a branch qualify as an export enterprise?
At least 60% of its output must be exported, whether to third-party clients or to the parent's operations abroad. You declare this in the SEC application and support it with your business plan.
Can a branch hire foreign staff?
Local staff can be hired as soon as the branch is registered with SSS, PhilHealth and Pag-IBIG. Foreign employees need a work visa, typically the 9(g) commercial working visa, and an Alien Employment Permit from the Department of Labor and Employment.
Can we convert a branch into a subsidiary later?
A branch and a subsidiary are different legal entities. To switch, you incorporate a new domestic corporation, transfer the branch's assets, contracts and staff to it, and then formally withdraw the branch's SEC license.
How long does registration take?
Around one to two months for the SEC license and local permits, assuming the parent documents are apostilled and complete when you file.