Branch Vs Subsidiary (TAX)
Branch Vs Subsidiary (TAX)
Branch Vs Subsidiary (TAX)
Subsidiary Corporation
As to Taxability
Branch
As to its Nature
Branch
A branch office is merely an extension of
the head office, thus its liabilities are
considered liabilities of the head office
As to its Capitalization
Branch
As a 100% foreign-owned entity, a branch
must have a capital of at least US$200,000
unless the branch will be exporting goods
or services or generating revenue from
abroad amounting to more than 60% of its
gross sales it can be fully foreign owned,
as it is considered an Export Enterprise
under the Foreign Investments Act.
Hence, the branch can be registered with
as little as P5,000 paid up capital.
However, most banks require P25,000
P50,000 to open a corporate bank account.
As to Registration Requirements
Branch
A branch is required to obtain a license to
do business here in the Philippines with
the Securities and Exchange Commission
(SEC). This license shall be issued by the
SEC upon compliance with the following
requirements:
1. Fill up and file the SEC Form 103
(Application
of
a
Foreign
Corporation) to Establish a Branch
Office in the Philippines). This
application may be signed by any
person
authorized
by
the
applicants Board of Directors. If this
is signed outside of the Philippines,
it must be authenticated by the
nearest Philippine Embassy or
Consulate.
2. Pay the SEC filing and legal
research fees. For the registration
of a branch with a US$200,000
assigned
capital,
the
SEC
registration fees shall be calculated
on the basis of its converted
equivalent in Philippine pesos. For
an initial assigned capital of
US$200,000, the SEC registration
fees may be calculated as the peso
equivalent of the following:
o
businesses)
3. Remit the initial assigned capital of
US$200,000
which
should
be
remitted
separately
from
the
registration fees. The US$200,000
shall be remitted directly to the
Treasurer-in-Trust account opened
for and on behalf of the branch
office;
4. Submission of the latest audited
financial statements. Such financial
statements must be authenticated
by the Philippine Embassy or
Consulate of the place of execution
thereof.
o
5. Within sixty
(60) days after
obtaining the license to operate, the
branch office is required to deposit
marketable securities worth at least
P100,000 with the SEC which may
be withdrawn upon cessation of the
Philippine branchs operations