What You Must Know about Forms of Business as a Foreigner?

With its growing economy, a wealth of natural resources, and robust labor resources, the Philippines has become one of the places to BE in the business scene, whether it be retail, manufacturing, merchandising, outsourced operations, or service businesses. It is no wonder that people from all over the world are looking to establish their business here in the Pearl of the Orient.


If you are a foreign businessman looking to expand your company operations to the South Eastern region of Asia, the Philippines is a great place to start. Most locals speak English, and you have the power of the foreign exchange rate at your disposal, so use it to your advantage.


On top of that, you can take advantage of various incentives given to foreigners. Bear in mind, your foreign company may be set up as either of the following business organizations: regional headquarter, regional operating headquarter, representative office, or branch. These business organizations have different requirements. If you are interested in finding out more, keep on reading below for the various specifications:

Regional Headquarter (RHQ)

For your company to be registered as a Regional Headquarter (RHQ), the Philippine Board of Investments must endorse it to the Securities and Exchange Commission (SEC). To do so, your company must first have a minimum inward remittance amounting to fifty thousand US dollars in the least (USD 50,000). For its legitimization, it must go through the registration with the SEC. As a regional headquarter, your business’s approval is dependent on the function of the firm which should be pertinent to supervisory roles, coordination, or communication roles. Additionally, one requirement that needs to be satisfied is that the company earns in any currency apart from the Philippine peso.

Regional Operating Headquarter (ROHQ)

If you would like to register your business as a regional operating headquarter (ROHQ) , the same protocol as the application for RHQ follows with minor vagaries. First, your business should receive an endorsement from the Philippine Board of Investments to the SEC. Your application to the SEC must also be approved. Your company must also contribute a minimum inward remittance of two hundred thousand US dollars (USD 200,000). For ROHQs, one condition for successful registration and approval relates to functions that perform qualifying services to all subsidiaries, branches, and affiliates. Secondly, the company must earn an income from said qualifying services. All income earned from these services are subject to a 10% income tax.

Representative Office

For representative offices, you are required to register your company with the SEC as a representative office. This essentially acknowledges your business as an extension or daughter firm of a parent company. Activities for firms like these may only be limited to liaison work that bridges the parent company with clients. A representative office cannot earn an income and must have an initial minimum inward remittance of thirty thousand US dollars (USD 30,000) to shoulder all operating expenses.


Branches are considered as foreign corporations that are organized and existing under foreign laws. They carry out day-to-day business activities of the Head office and can earn income from the host country, which in this case is the Philippines. To be legally allowed to operate, the business needs to be registered as a branch with the SEC. Additionally, the assigned head capital of the firm must be at least two hundred thousand US dollars (USD 200,000) which may be negotiated to at least one hundred thousand US dollars (USD 100,000) depending on circumstances and conditions. Such conditions include the firm’s operations requiring advanced technology, or if the business directly employs fifty individuals, at least.

Additional Information:

It is important to note that foreign companies and individuals wishing to pursue business in the Philippines must also register for a Tax Identification Number (TIN) at the Bureau of Internal Revenue (BIR), the tax collection arm of the Philippine government. Foreign corporations that earn compensation or income derived from all business and work activities done within the Philippine economic zone authority are not exempted from tax payments. The tax rate will vary depending on the nature of which income or profit was made, the income bracket, and the kind of business organization the company is registered as.

Final Word

Having been touted as the “Rising Tiger of Asia,” it is no wonder that companies and investors all over the world are waiting in line to bet on the Philippines. If you are eager to start your business journey here, the best way to do so is by learning just how you can legally set up your business. That begins with understanding the different kinds of business organizations. Should you wish to learn more, there are a multitude of online consulting, accounting, and financial analytic firms that can aid you in starting up your company or in working out how to expand your current one. You can get in touch with us to facilitate Business Registration, as well as bookkeeping and accounting help. Call us for a quick 30-minute consult.