Are you foreigner looking to open you own business in the Philippines. Find out if you’re qualified to setup and register an ROHQ or regional operating headquarters of your firm in the Philippines. If you are a partner or manager tasked with handling this responsibility for a firm that wishes to expand in the country, here is your complete guide to registering as an ROHQ. We’ve outlined the requirements so you can get the help you need. We also offer business registration services to help you set things up swiftly.
What is an ROHQ?
There are many kinds of businesses that can be opened and operated in the Philippines, one of which is the ROHQ. According to Section 2 of Philippine Republic Act No. 8756, the definition of the term, ROHQs are Regional Operating Headquarters, which “shall mean a foreign business entity which is allowed to derive income in the Philippines by performing qualifying services to its affiliates, subsidiaries or branches in the Philippines, in the Asia-Pacific Region and in other foreign markets.”
In simple terms, ROHQs are regional operating headquarters of foreign companies that are allowed to generate income by providing services to affiliate firms or subsidiary offices rather than from providing direct service to consumers. These ROHQs are still considered foreign in nature, and this registration is provided to allow legal operations with proper tax payments in the Philippines.
Opening an ROHQ may not be the same as opening up a regular partnership or corporation. This is because ROHQs are a special registration that allows foreign companies to operate in the Philippines. This means that the standard procedure for processing registration may be entirely different.
List of Qualifying Services
Before registering as an ROHQ, you must first see if your business operations are on the list of qualifying services or involve any of them. This includes:
1. Business coordination and planning
2. General and administrative planning
3. Procurement and sourcing of raw materials and components for production in affiliate firms
4. Marketing and sales promotion
5. Corporate finance advisory services
6. Personnel training and development
8. Research and development services and product development
9. Maintenance and technical support
10. Communications and data processing
11. Business development planning and support
How to Register
Here are the requirements needed for registration. Gathering the required documents can be very tedious especially when you’re not sure what to do. Seeking business registration services from a reputable accounting firm could be the right move for you.
- Appointment of a Resident Agent You Can Trust
A foreign parent company must appoint a Resident Agent to represent the ROHQ. These Agents are tasked with the responsibility of receiving court summons or legal proceedings served against the Philippine-registered ROHQ. The Agent may be a Philippine resident or a domestic corporation legally engaged in business in the country. In this regard, a trusted accounting firm can help facilitate the process.
- Establish Proof of Official Business Address
Before registering your company, you need a registered office address in the place where you intend on operating. Your Contract of Lease must be shown to the BIR and LGUs. Alternatively, you can first rent a virtual office in case you have yet to find a physical one.
- Meet The minimum Capital Requirements
ROHQs are mandated to deposit a 200,000 USD inward remittance as capitalization and annual support for their operating expenses. Note that under certain conditions, overhead expenses of head offices may be allocated here.
- Know the Various Restrictions
ROHQs are not allowed to provide direct services to consumers, only to their affiliates, branches, or subsidiaries. It also cannot solicit or market goods and services on behalf of its parent company, subsidiaries, affiliates, branches, and/or other associated entities.
- Read on Various Tax Laws
As they still generate income, ROHQs are subjected to a tax rate of 10% on taxable income in the Philippines. They also have to shoulder the 10% Value added tax. Those who conduct business under the PEZA zone may avail of certain tax incentives and benefits.
- Fill up and submit the following to the Securities and Exchange Commission (SEC)
– Application form
– Name Verification Slip
– Certificate from the Philippine embassy/consulate or the Philippine commercial office or the equivalent office of the Philippine DTI in the country of origin of the parent company which must verify that the foreign corporation is engaged in international trade with branches, affiliates, or subsidiaries
– Certificate from the principal officer of the foreign corporation
– Proof of 200,000 USD inward remittance
– Clearance of endorsement from appropriate agencies
– Endorsement from the Board of Investments
– Most recent authenticated financial statements
If you feel like a fish out of water when it comes to dealing with Philippine government agencies, it’s a much better option to outsource the tedious registration tasks to a professional. Call our team of accounting experts for assistance.