All You Need To Know About Expanding Into The Philippines Via Franchising (Part 3 Of 3)

[Business Registration]

The Retail Trade Liberalization Law provides that foreign-owned partnerships, associations and corporations formed and organized under the laws of the Philippines may, upon registration with the Securities and Exchange Commission (SEC) and the Department of Trade and Industry (DTI), or in case of foreign-owned single proprietorships, with the DTI, engage or invest in the retail trade business, subject to the following categories:

Category A 

Enterprises with paid-up capital of the equivalent in Philippine Peso of lower than Two million five hundred thousand US dollars (US$2,500,000.00) shall be reserved exclusively for Filipino citizens and corporations wholly owned by Filipino citizens.

Category B 

Enterprises with a minimum paid-up capital of the equivalent in Philippine Pesos of two million five hundred thousand US dollar (US$2,500,000.00) but less than Seven million five hundred thousand US dollars (US$7,500,000.00) may be wholly owned by foreigners except for the first two (2) years after the effectivity of this Act wherein foreign participation shall be limited to not more than sixty percent (60%) of total equity.

Category C 

Enterprises with a paid-up capital of the equivalent in Philippine Pesos of Seven million five hundred thousand US dollars (US$7,500,000.00), or more may be wholly owned by foreigners: Provided, however, That in no case shall the investments for establishing a store in vestments for establishing a store in Categories B and C be less than the equivalent in Philippine pesos of Eight hundred thirty thousand US dollars (US$830,000.00).

Category D 

Enterprises specializing in high-end or luxury products with a paid-up capital of the equivalent in Philippine Pesos of Two hundred fifty thousand US dollars (US$250,000.00) per store may be wholly owned by foreigners.

GENERAL PROCEDURES & APPLICATION REQUIREMENTS

REGISTRATION OF BUSINESS ENTITIES

SINGLE PROPRIETORSHIP/ BUSINESS NAME REGISTRATION (Application to be filed at any nearest Department of Trade and Industry (DTI) office or through http://www.dti.gov.ph)

A. Requirements for Filipino Investors

1. Must be a Filipino citizen, at least 18 years old

2. Filipinos whose name are suggestive of alien nationality must submit proof of citizenship such as birth certificate, PRC ID, voter’s ID, passport

If the applicant has a foreign sounding name, acquired Filipino citizenship by naturalization, election or by other means provided by law, he must submit proof of his Filipino citizenship such as: -Naturalization certificate and Oath of allegiance, -Valid ID card issued by the Integrated Bar of the Philippines (IBP) or Professional Regulatory Commission (PRC)

3. Processing Fee of P300.00 and P15 Documentary Stamp

B. Requirements for Foreign Investor (submit 5 copies)

1. Interview sheet with interviewer’s findings and recommendation

2. Duly Accomplished Forms:
Form #16- Business Name Application; Form #17- Foreign Investor’s Application

3. ID pictures (Passport Size)
a. Foreign Investor – 7 copies
b. Filipino resident agent -7 copies

4. ACR/ICR, Special Investors Resident Visa (SIRV) or passport

5. Notarized Appointment of Filipino Resident Agent

6. For Non-Resident Alien: Proof of Inward Remittance of Foreign Currency with Peso Conversion For Resident: Bank Certificate of Deposit

7. Authority to verify Bank Accounts/Bank Certificate of Deposit

8. Certification from Resident Alien not seeking Remittance of Profits and Dividends Abroad

9. If investment includes assets other than foreign exchange, copy of valuation report from Central Bank.

10. Clearance/Certification from other involved agencies ( ) PNP/DND – if engaged in defence-related activities ( ) DOST – if investment involves advanced technology

11. Fees/Charges – In Cash: For Business Name Registration Certificate
a. Single Proprietorship – P300.00
b. Filing Fee – P500.00
c. Registration Fee – P5,000.00

12. Bio-data of Foreign Investor

13. In case of alien retailer, current year’s permit to engage in retail business per RA 1180 (Amended by RA 8762 – Retail Trade Liberalization Act of 2000)

Please feel free to contact Corporate BackOffice at +65 6385 1011 should you wish to expand into the Philippines. Our partner office there is glad to provide assistance.