Setting Up a Liaison Office in the Philippines

Foreign companies entering the Philippines market have several choices in terms of the business form for setting up their operations. Even if the most employed type of structure is the branch office, as it offers full control to the parent company, there is also the subsidiary which can adapt its activities to the local market, therefore it can undertake other activities than the parent company.

The types of business forms mentioned above offer foreign companies the possibility of engaging in commercial activities, however for those that want to prospect the market there is another option: the Philippines liaison office, also known as the representative office.

Our Philippines company formation agents can help you set up any type of company in this country, including a liaison office. They can also help you start a company in Philippines.

Characteristics of the liaison office in the Philippines

The representative office is recognized by the Revised Corporation Code as a foreign-owned structure. However, it is considered an extension of a foreign company and not a foreign company operating on the local market, which means it will be subject to certain restrictions.

In fact, a Philippines liaison office cannot undertake any commercial activity, its role being limited to marketing, prospecting and acting as a contact point with the parent company’s clients and business partners.

The representative office in the Philippines will not have a legal personality. The parent company will be responsible for the liabilities of the liaison office.

Requirements to open a representative office in the Philippines

Foreign companies interested in setting up liaison offices in the Philippines must first open a corporate bank account into which an initial inward remittance of at least USD 30,000 must be made to cover its operating expenses. Also, the parent company must appoint a local registered agent who will act on behalf of the foreign company. The agent can also be a foreign citizen with a Filipino residence permit.

The Philippines liaison office is licensed by the Securities and Exchange Commission (SEC); BOI registration is not required.

Considering the liaison office will not carry out any commercial undertakings it is not subject to any income taxes but it must register with the BIR, withhold taxes on salaries and file audited financial statements and a General Information Sheet with the SEC every year.

If you want to set up a liaison office and need assistance, please feel free to contact our Philippines company registration specialists.