A Branch office is an extension office of a foreign company for it to conduct business operations in the Philippines. Hereunder are the requirements for registering a branch office with the Securities and Exchange Commission (SEC):
Application Form:
1. F-103 for Stock Branch Office.
2. F-108 for Non-Stock Branch Office
Note: The duly designated Resident Agent must execute an acceptance of appointment, if he/she is not the signatory to the Application Form.
Board Resolution:
A duly apostilled board resolution must contain the following provisions:
1. Authorizing the establishment of the Branch Office in the Philippines;
2. Designating the Resident Agent to whom summons and other legal processes may be served in behalf of the foreign corporation; and
3. Stipulating that in the absence of such Agent or upon cessation of its business in the Philippines, any summons or legal processes may be served to SEC as if the same is made upon the corporation at its home office.
Corporate papers:
Apostilled copy of the Articles of Incorporation / Partnership with an English translation thereof if in a foreign language other than English.
Capitalization Requirement:
1. USD 200,000.00 if the branch office is as a domestic enterprise. Domestic enterprise means an enterprise that produces goods for sale or renders services to the domestic market entirely or if exporting a portion of its output, fails to consistently export at least sixty percent (60%) thereof.
2. USD 100,000.00 if the branch office is a domestic enterprise that involves the use of advanced technology, as determined by the Department of Science & Technology, or employs at least 50 direct employees.
Submission of Financial Statements:
For those whose home country requires audited financial statements:
1. The applicant shall submit the audited financial statements (AFS) as of a date not exceeding one (1) year immediately prior to the filing of the application;
2. If the date of the AFS exceeds the one-year requirement, the following shall be submitted:
a. Audited financial statements that are available as of the date of filing of the application; and
b. Unaudited financial statements (UFS) as of a date not exceeding one (1) year immediately prior to the filing of the application.
For those whose home country does not require audited financial statements:
1. Applicant shall submit the unaudited financial statements (UFS) as of a date not exceeding one (1) year immediately prior to the filing of the application.
2. The UFS shall be accompanied by a Certification signed under oath by an officer of a responsible regulatory institution or by the applicant's legal counsel that the applicant is not required to prepare and submit audited financial statements, with a citation of the law or regulation on which it is based.
Note: The aforementioned AFS and UFS must be signed under oath by the president or any other person authorized by the corporation. No authentication shall be necessary if the signatory to the said financial statements is the same as that in the corporation's application.
Compliance with the following Financial Ratios:
Stock Branch Office:
1. Solvency Ratio of 1:1 (total assets/total liabilities
2. Liquidity Ratio of 1:1 (current assets/current liabilities)
3. Debt to Equity Ratio of 3:1 (total liabilities/equity)
Non-Stock Branch Office:
1. Solvency Ratio of 1:1 (total assets/total liabilities)
Security Deposit:
A duly registered Branch Office is mandated to deposit securities with the SEC in accordance with the following schedule:
1. Within 60 days after the issuance of its SEC license, securities with an actual market value of at least P500,000.00.
2. Additional securities shall be deposited within six months after the end of the fiscal year indicated in the Financial Statements (FS) in the following situations:
a. If the branch office gross income within the Philippines for the fiscal year exceeds P 10,000,000.00, additional securities with an actual market value equivalent to two percent (2%) of the increase in said gross income; and
b. If the actual market value of the securities deposit or financial instruments has decreased by at least ten percent (10%) from the time it was deposited, additional securities with an actual market value that would cover the decrease.
After SEC registration, the business must be registered with the local government unit for business permit, and with the Bureau of Internal Revenue (BIR). You may check our articles on business permit and BIR registration through the following links: