A representative office promotes the products and/or services of the Company it represents, but cannot conclude contracts with local entities on behalf of its parent Company. Such contracts must be directly entered into between the Company head office and the local entity. Its activities are limited to the promotion and dissemination of information about the Company’s products and/or services.
By the nature of the activities allowed of a representative office, it cannot derive income from the Philippines. The test of whether an office is a representative office or not, is whether it derives income from its operations.
A representative office in the Philippines is a type of business entity that is allowed to engage in marketing and other activities on behalf of a foreign company, but is not allowed to engage in income-generating activities. This type of business entity is commonly used by foreign companies that are looking to explore the Philippine market and establish a presence in the country without committing to a full-scale business operation.
Setting up a representative office in the Philippines is relatively straightforward and can be completed in a few simple steps. The first step is to register the representative office with the Philippine Securities and Exchange Commission (SEC). This requires submitting certain documents, such as a registration application, articles of incorporation, and a certificate of registration from the foreign company.
Once the representative office is registered with the SEC, it must also register with the Philippine Bureau of Internal Revenue (BIR) to obtain a taxpayer identification number (TIN) and obtain the necessary permits and licenses to operate in the Philippines. The representative office must also appoint a resident agent who will be responsible for receiving legal notices on behalf of the representative office.
Once these steps are completed, the representative office can begin its marketing and other activities in the Philippines. However, it is important to note that a representative office is not allowed to engage in income-generating activities, such as selling goods or providing services, and any income earned by the representative office must be remitted back to the foreign company.
Overall, setting up a representative office in the Philippines can be a useful way for foreign companies to explore the Philippine market and establish a presence in the country without committing to a full-scale business operation. It is a relatively simple and straightforward process, and can provide many benefits to the foreign company.
Please contact us if you need assistance regarding the registration of representative office in the Philippines