A foreign corporation may set up a branch in the Philippines by obtaining a license to transact business. A branch, like a representative office, is an extension of the foreign corporation (i.e., incorporated and existing under foreign laws), but may engage in exactly the same activities as its parent company. However, existing nationality requirements with respect to certain industries must be observed.
Since a branch office is a mere extension of its parent corporation, the branch does not have a personality separate and distinct from its parent company. A branch office may, therefore, conclude sales contracts with local entities in its own name, and in general, engage in income producing activities in the same manner as its parent company. Further, the parent corporation may be held responsible for any liability of the branch in excess of its investment.
Capital Requirement
The required minimum assigned capital is Two Hundred Thousand US Dollars (US$200,000.00). (Republic Act No. 8179). This amount of required minimum assigned capital may be reduced to One Hundred Thousand US Dollars (US$100,000.00) if advanced technology as determined by the Philippine Department of Science and Technology is involved or the business directly employs at least fifty (50) employees.