Hensley&Cook-Philippines
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Philippines.

Philippines is dynamic in devising attractive mechanisms for investors. Just recently, the Corporation Code was amended is now allowing a One Person Corporation (one director). The amendment likewise offers perpetual existence of companies and expressly allows remote communication and in-absentia voting of shareholders making a company easier to govern.

This jurisdiction allows 100% foreign ownership of companies by virtue of the Foreign Investments Act (FIA), provided, the activities are not within the negative list defined by the government. Accordingly, unless you want to run a school, engage in services related to mass media, or conduct activities within the negative list, a Filipino counterpart is not required.

Most clients of Hensley&Cook choose to set-up one fo the following companies to start their activities in the Philippines:

PEZA Registered Limited Liability Company

PEZA stands for Philippine Economic Zone Authority. The most common company under this category are the ones set-up for Business Process Outsourcing (BPO) and are usually located in IT parks or ECOzones. Depending on the activities engaged, foreign individuals could own this 100%. There is a residency requirement however for certain officers of the company.

Branch Office

When you plan to maintain a local presence and have no plans in hiring a local team, a branch office may be a solution. A branch office being an extension of the foreign company is required to have a resident agent and does not need new set of directors. A branch office is not a domestic corporations and therefore limited in its activities.

Subsidiaries

Subsidiaries are domestic corporations, which can be foreign-owned or Filipino-owned. When the majority of the Board of Directors are Filipinos and at least 60% of the shares are owned by Filipinos, it is Filipino-owned. Any ownership interest lesser than 60%, is foreign-owned.

To decide whether or not to open a foreign-owned company or a Filipino-owned company depends upon the desired business activities. Unless not within the negative list, a subsidiary can be foreign-owned even up to 100%.

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