Subsidiary Office Philippine Registration

DOMESTIC SUBSIDIARY

A subsidiary is a corporation registered with Philippines government either wholly or partially owned by parent company outside the Philippines. It is a domestic company by nature and foreign at the same time because it is registered and located in the Philippines and owned by a company outside the Philippines . The benefit of a subsidiary over a branch company is that a subsidiary has a separate and distinct juridical personality from its parent company.

Capital Requirements

In general, the minimum investment requirements in the Philippines for foreign company who want to have a majority control with its subsidiary company is Two Hundred Thousand US Dollars (US$ 200,000.00). (Republic Act No. 8179). The said investment could be lowered to One Hundred Thousand US Dollars (US$ 100,000.00) if the business has advanced innovation as established by the Philippine government is entailed or the business will employs a minimum of fifty (50) employees. The minimum capital requirements of US$ 200,000.00 does not apply to enterprises that export sixty percent (60 %) or more of its sales or revenue.

Tax liability

A subsidiary is responsible to pay 30 % on its entire earnings, both from sources within and outside the Philippines. The remittance of returns by a subsidiary to its parent corporation is generally taxed at 30 %. This, might be lessened to 15 % if the country where the parent company resides either: (a) gives a tax exempting credit rating or (b) does not impose any tax on such dividends received.

Obligations

The subsidiary’s liability are separate and do not liable for the obligations of its parent company. Claims for liabilities are only is limited to the available assets or resources of the subsidiary company in the Philippines. The parent company is therefore totally protected from the liabilities of its subsidiary.