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5 Simple Steps of Incorporating a Company in Philippines

Prabhat Nigam

| Updated: May 26, 2022 | Category: Global Registration

5 Simple Steps of Incorporating a Company in Philippines

Philippines is an Asian nation nestled in the Pacific Ocean between South China Sea and Philippines Sea. It is the fifth largest economy of the ASEAN nation. Philippines is an economically progressive country with GDP rising at the rate of 6% per annum. The government is offering multiple ease of doing business conditions for the businesses to flourish in Philippines and creating an ecosystem to support this business infrastructure. This piece of writing discusses the 5 simple steps of Incorporating a Company in Philippines.  

Prerequisites of Incorporating a Company in Philippines   

Before diving into the incorporation process directly, it is advised that the promoters of the company first complete the following tasks to make the process of incorporation smooth:

  1. Selecting at least 3-5 probable names for the business: it is always advised to the promoters to select at least 3-5 alternative names for your business. In case the name you chose for your business is already registered in the database of the Securities and Exchange Commission (SEC)[1] Philippines or some other company has already reserved the name, you will have other names ready for your business.  
  2. Finalising the place of doing business or permanent address of your business: in case a business wishes to start its business operations as soon as possible with a duly incorporated company or looking for a temporary address to set up one’s business before moving into a plush official address, it is advisable to set up  a virtual office space and later on, the business can move to a permanent official address and make amendments in the incorporation documents regarding the company’s official address.  

5 Steps of Incorporating a Company in Philippines   

The process of incorporating a company in Philippines is fast and executed in the following 5 easy steps.

  1. Registration of Company’s name with SEC: SEC Philippines has an online company registration system where the promoters can create an account to reserve and register a company name in Philippines. Another way that can be adopted is verification from the SEC’s Name Verification Unit at their office or the company’s name can be reserved online at the SEC’s website.

In case the promoters wish to register a sole proprietorship, the business name has to be reserved with the Department of Trade and Industry (DTI) and if a cooperative wants to be established, the name must be reserved with the Cooperative Development Authority (CDA).   

  • Preparation and Submission of incorporation documents to SEC: The second step in the incorporating a company a company in Philippines is preparation and submission of the following documents of incorporation:
  • Articles of Incorporation (AoI): AoI is the document which contains the company’s basic information such as company’s name, its purpose, office place, number of incorporators, the amount and share of capital stock of the company.
  • Bye-laws: this document contains the rules for regulating the internal functioning within the company itself. It contains the rules of conduct, rules regarding convening board meetings, Board of directors and other officers elections and other duties of the election are included as well.    
  • Treasurer’s affidavit: This document is signed by the person who has been appointed as the treasurer of the company stating that he or she is the authorised person to act as a treasurer in that capacity.
  • Registration of the business location with the Local Government Units (LGUs) where the promoters wish to operate their operations from:
  • The promoters of the company also need to take permission from the local Barangay (a small territorial and administrative district which is the most local level of government in Philippines) or the district from where the business wants to carry out their operations.
  • The business also needs to secure Mayor’s permit from the Mayor’s office.
  • A Business Permit also needs to be secured from the Business Permit and Licensing Officer (BPLO) after payment of required fees.
  • Registration with the Bureau of Internal Revenue (BIR): the company needs to register itself with BIR for purposes of tax requirements. In order to get registered with the BIR, the company needs to submit the following documents:
  • For the payment of Annual Registration Fee (0605 Form)
  • For the payment of subscription of shares for domestic corporations (DST 2000 Form) 
  • For the payment of lease for all types of company formation (DST 2000 Form).

Apart from the BIR Registration certificate, a business needs to obtain the following documents as well:

  • Certificate of Registration of Books of Account
  • Point of Sale (PoS) machine, Cash Register Machine (CRM) or Authority to Print Receipt/ Invoices (Manual Receipts)
  • Registration of Employer and Employees with the appropriate government agencies: the last step in the incorporation of company in Philippines ends with getting registered yourself as an employer and also the employees of the company with various government agencies for the purposes of obtaining the social security, health insurance and housing benefits. Following are the authorities that a business needs to get registered with:
  • Bureau of Internal Revenue (BIR) for personal income taxes
  • Social Security System (SSS) for securing social security benefits of employees
  • Philippine Health Insurance Corporation (PhilHealth) for ensuring health insurance benefits of the employees
  • Home Development Mutual Fund (Pag-IBIG Fund) for securing housing benefits of the employees     

Conclusion 

From the abovementioned step by step process of incorporating a company in Philippines, it can be concluded that incorporating a company in Philippines is an easy process if professional help is sought to complete the process of incorporation. Further, the benefits such as access to ASEAN market, tax incentives, IT infrastructure and International treaties signed by the government make it ideal for any business to start a business in Philippines.

Read Our Article: Investment in Foreign Company by Indian individual: An Overall Procedure

Prabhat Nigam

Prabhat has done his BA LLB (Hons) and has been writing research papers since his law school days. His interest in content writing made him pursue a career in legal research and content writing. His core areas of interest are indirect taxes, finance and real estate.

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