Foreign companies entering the Philippines market have several choices in terms of the business form for setting up their operations. Even if the most employed type of structure is the branch office, as it offers full control to the parent company, there is also the subsidiary which can adapt its activities to the local market, therefore it can undertake other activities than the parent company.
The types of business forms mentioned above offer foreign companies the possibility of engaging in commercial activities, however for those that want to prospect the market there is another option: the Philippines liaison office, also known as the representative office.
Our Philippines company formation agents can help you set up any type of company in this country, including a liaison office.
Characteristics of the liaison office in the Philippines
The representative office is recognized by the Philippines Companies Act as a foreign-owned structure. However, it is considered an extension of a foreign company and not a foreign company operating on the local market, which means it will be subject to certain restrictions.
In fact, a Philippines liaison office cannot undertake any commercial activity, its role being limited to marketing, prospecting and acting as a contact point with the parent company’s clients and business partners.
The representative office in the Philippines will not have a legal personality. The parent company will be responsible for the liabilities of the liaison office.
Requirements to open a representative office in the Philippines
Foreign companies interested in setting up liaison offices in the Philippines must first open a corporate bank account in which a deposit bond of 30,000 USD must be made. Also, the parent company must appoint a local registered agent who will act on behalf of the foreign company. The agent can also be a foreign citizen with a Filipino residence permit.
The Philippines liaison office will only be registered with the Trade Register and not with the Board of Investment.
Considering the liaison office will not carry out any commercial undertakings it is not subject to any income taxes and it does not have to file any accounting documents.
If you want to set up a liaison office and need assistance, please feel free to contact our Philippines company registration specialists.