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Establishment of Branch Office, Representative Office, Regional Headquarters (RHQ) or Regional Operating Headquarters (ROHQ)
Foreign companies who wish to maintain a fully foreign-owned, fully foreign-controlled entity within the Philippines have the option of establishing a branch, a representative office, an RHQ or ROHQ in the country.
Our legal partners are available to assist you in selecting the set up that will best address your needs, process your documents and legal requirements and establish your desired office for you.
A Branch Office carries out the business activities of the foreign company and is allowed to derive income from its host country. In other words, a branch is an extension of the foreign entity in the Philippines as the host country. The branch office can market, disseminate information, sell and distribute products within the country. Before branch offices can conduct business in the Philippines, they are required to demonstrate their legitimate existence as a foreign company, duly registered in accordance with the laws of their country, and secure a license from the Philippine SEC.
A Representative Office deals directly with the clients of the parent foreign company but does not derive any income from the host country (the Philippines) and is fully subsidized by its head office. It undertakes activities such as, but not limited to information dissemination and promotion of the company‚Äôs products as well as quality control of products. Not deriving any income in the Philippines, Representative Offices are not liable to pay income taxes in the country.
RHQ and ROHQ
Multinational companies, i.e. foreign companies with business establishments in two (2) or more countries, have the option of setting up either an RHQ or an ROHQ in the Philippines.
An RHQ is an office whose purpose is to act as an administrative branch of a multinational company engaged in international trade, principally serving as a supervision, communications and coordination center for its subsidiaries, branches or affiliates in the Asia-Pacific Region and other foreign markets. RHQs do not earn or derive income in the Philippines.
On the other hand, an ROHQ is an office allowed to derive income in the Philippines by performing the following services to its affiliates, subsidiaries or branches in the Philippines, in the Asia-Pacific Region and in other foreign markets:
- General administration and planning
- Business planning and coordination
- Sourcing/procurement of raw materials and components
- Corporate finance advisory services
- Marketing control and sales promotion
- Training and personnel management
- Logistics services
- Research and development services, and product development
- Technical support and maintenance
- Data processing and communication
- Business development