Establishing A Russian Owned Company In The Philippines
Процедуры для российских компаний по созданию представительства в Филиппины
With the Philippines currently negotiating a Free Trade Agreement with the Eurasian Economic Union, now is a good time for Russian businesses interested in expanding to Asia to look at the Philippines as a potential market. We previously discussed the goods that the Philippines is currently importing from Russia in this article What Goods & Services Is The Philippines Buying From Russia?
A range of market entry options are available for those wishing to tap into emerging opportunities within the Philippines. However, regardless of the entry mode chosen by new entrants, corporate establishment can readily be achieved through compliance with up-to-date regulations.
Corporate Establishment Procedures
The two most common methods of entry to the Philippines are branches and representative offices (ROs). The Philippine Security and Exchange Commission (SEC), through its Company Registration and Monitoring Department (CRMD), administers registration for a branch or RO.
To successfully register with the CRMD, investors should be sure to prepare all necessary documentation outlined in the following steps:
Step 1 – Name verification
Currently, companies may reserve prospective names online via the SEC i-Register system.
Step 2 – Application
Depending on the structure of an investor’s business, in addition to the type of investment that is sought within the Philippines, one of the following application forms is to be completed as part of the registration process:
- Form F-103: Required for listed firms seeking to establish branch offices
- Form F-104: Required for listed firms seeking to establish ROs
- Form F-108: Required for branch or ROs of non- stock corporations
Step 3 – Corporate structuring documentation
A board resolution and articles of incorporation must be prepared in the following manner by all foreign corporations seeking to establish branches or ROs.
The board resolution of a company must authorize the establishment of the branch/RO in the Philippines, designate a current resident of the Philippines to act as a Resident Agent, and stipulate that in the absence of the Resident Agent or upon cessation of operations in the Philippines, all summons or legal processes may be served to SEC as if the same is made upon the corporation at its home office.
Articles of incorporation
Authenticated copies of a company’s articles of incorporation should be provided. If the originating documents are not in English, a copy of the original Russian language articles along with an English translation must be provided.
Step 4 – Financial statements
All companies must produce financial statements to prove that they are solvent and able to conduct business within the Philippines. These statements are to be prepared in accordance with Philippine Financial Reporting Standards (PFRS).
Step 5 – Capital requirements
Inward remittances must be completed for both branches and ROs as part of the registration process. These funds act as a means of verifying the ability of a company to cover its expenses within the country.
Depending on the nature of establishment, one of the following remittances should be completed and documented during registration:
* Companies with at least 50 employees within the Philippines or operating within high-tech industries may be permitted to register with US$100,000 in paid-in capital.
Step 6 –Government agency endorsements
While the steps above are required for all companies seeking to establish themselves in the Philippines, the sector and location of a given investment will dictate additional requirements imposed by local governmental departments and/or provincial authorities. The most common procedures required at the local level include obtaining clearance and necessary permits from regional licensing offices.
Our firm has three offices in the Philippines, including a Russian investment desk. For assistance with investments into the country, please email Maria Kotova at firstname.lastname@example.org
- Business Opportunities For Russian Companies In ASEAN
- What Products & Services Is The Philippines Buying From Russia?
Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at email@example.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.