Before we talk about the Philippines corporation, we will cover a little background information. The Philippines are a group of over 7,000 islands located on the western Pacific Ocean in Southeast Asia. As a whole, these islands are a Unitary Constitutional Presidential Republic. They are officially called the “Republic of the Philippines”. Manila is its capital.
The Philippines has an area of 115,800 square miles (301,000 square kilometers) and a population of approximately 101 million making it the 8th most populated country in Asia and the 12th most populated in the world.
The Philippines were discovered and colonized by Spain in 1521. The islands were Spain granted the Philippines to the United States as a result of the Spanish–American War in 1898. In 1946, the Philippines were recognized by the United States as an independent country.
Philippine corporations are governed by The Corporation Law of 1906.
Benefits
Philippines company formation has many benefits, including:
• Limited Liability: Incorporating in the Philippines means that the risk and liability of the corporation are limited only to the corporation. Basically, owners and shareholders will not carry liability.
• One Shareholder: The minimum requirement is one shareholder who can also be one of the five directors.
• English: As a former American territory, English is the official second language and spoken by a majority of its population.
• Low Wages: Wages paid to English speaking Filipinos are very low.
Philippines Corporation Legal Information
Corporate Name
Philippines corporations must pick a unique corporation name not previously registered by an existing corporation. The availability of a corporate name, and completion of name registration, can be performed online or at SEC Office in Mandaluyong.
Office Address and Local Agent
Philippines corporations must have a local registered agent and a registered local office address for process service requests and official notices.
Shareholders
Philippines corporations must have at least one shareholder, who can also be a director.
The value of each share in the Philippines is usually P100.00 per share.
Directors and Officers
When incorporating in the Philippines, corporations must provide the number of directors and their names. Also, there must be an incorporator. Corporations must have at least five and not more than fifteen directors.
Certain officers and their names are required to be listed. These officers include the Chairman of the Board, the President, the Corporate Secretary (who must be Filipino), and the Corporate Treasurer (who also must be Filipino).
Authorized Capital
Generally, the paid-up capital at the time of incorporation should not be less than Php 5,000. However, higher amounts of paid-up capital may be required by law. A list of the industries requiring a higher paid-up capital may be seen at www.sec.gov.ph.
Taxes
Corporations in the Philippines pay a tax rate of 30%.
Annual Fees
The annual renewal fee for Philippines corporations is P500.
Public Records
Names of directors, officers, and shareholders of a Philippines corporation may appear on public record. However, nominee directors and shareholders may be provided for privacy.
Accounting and Audit Requirements
Philippines corporations must file an annual tax return, and submit annual financial documents.
Annual General Meeting
Annual meetings for Philippines corporations are required. The typical date of these meetings is April 30.
Time Required for Incorporation
Philippines corporations can expect the incorporation process to take one to two weeks depending on the name registration approval and completion of required corporate documents by the applicant.
Shelf Corporations
Shelf corporations are available for faster incorporation.
Conclusion
Several benefits are offered to Philippines corporations including: only one shareholder required to incorporate, limited liability for shareholders, English spoken by the majority of its population, and low wages.
