Philippine Company Incorporation

Answer:

The types and standards of taxation for e-commerce businesses in the Philippines are exactly the same as those for brick-and-mortar businesses, with no special policies or tax rates. What are the taxes involved in the daily operation of an e-commerce business and what are the respective tax rates?
 There are three main types of taxes to be filed: value-added tax, income tax, withholding and stamp duty.
 01 Value Added Tax (VAT)
 There is a difference between VAT registration and non-VAT registration when a company chooses to pay VAT.
 An enterprise registered for VAT is subject to VAT at a rate of 12% on the sale, exchange or exchange of leased goods or property, or the provision of services, and on any individual who imports goods in the course of trade or business activities.

02 Individual Income Tax
 Sole proprietorship is subject to personal income tax, and the tax rate is paid in accordance with the annual profit of the registered person in the year, the higher the profit, the higher the income tax rate.
 03 Corporate Income Tax
 A joint-stock company is subject to corporate income tax. The corporate income tax is based on profits and is not payable if the company loses money.
 The corporate income tax rate in the Philippines is fixed at 30% of taxable income. Taxable income includes the relevant items of gross income subject to income tax, less deductions allowed under the Philippine Internal Revenue Code.
 04 Withholding Tax and Stamp Duty
 Withholding Tax
 Withholding tax is imposed at the rate of 15% on dividends distributed by a Philippine corporation to non-residents if the country of the non-resident foreign corporation receiving the dividends allows a 15% tax credit
 Stamp Duty
 Different tax rates apply depending on the type of tax bracket

A：01 Select the type of company
 The first step is to determine the type of registered company. Because the type of company is related to your personal and corporate responsibilities and obligations, as well as the future development of the company, taxation and other aspects of the problem.
 Philippine companies are classified as follows
 ① Sole proprietorship
 ②Partnership
 ③ Limited liability company (corporation)
 02 Choosing a Registered Office
 You can choose to register your company in any city in the Philippines. What is the specific city to choose for incorporation? You need to consider the following points
 ①The cost of incorporation varies from region to region
 ②The company has to pay different taxes every year
 ③Analysis of the cost of operating in the place of incorporation and in the place of non-incorporation
 ④ whether it is convenient to register and how to manage afterwards
 ⑤ the actual place of operation of the company
 ⑥Whether it is convenient to open a bank account.

Answer:

1. The Philippines has a large labor force, educated and knowledgeable in English. According to the latest statistics of the United Nations, the literacy rate of Filipino residents reached 97.75%, ranking first in Southeast Asian countries. English has a long history in the Philippines. Because of the good English language environment, many retirees from Western countries consider the Philippines as their first choice after retirement.
2. With a population of over 100 million, the market potential is huge. According to the data released by the World Bank, the population of the Philippines continues to rise, with a total population of more than 100 million. Private consumption accounts for nearly 70% of GDP.

3、Low labor cost. The average daily wage of Filipino workers is about 400-500 pesos (equivalent to 55-70 RMB). Many foreign companies use the Philippines as OEM to reduce the production cost of their products.

4. Enjoy the same treatment. Whether it is a sole proprietorship or a joint venture registered in the Philippines, the local preferential policies are the same. The local government will analyze the situation according to different investment sectors, product import and export, and company ownership. At the same time, the local government supports investment attraction and has a sound economic system that is conducive to foreign investment.
5. Preferential tax policies for local companies in the Philippines. Registration only requires filing tax returns when actually doing business, so there are fewer types of taxes and lower costs. It also saves labor costs if the company does not operate locally.

A: The Philippines is the fourth most English-speaking country in the world, with over 92% of the population being proficient in English. English has a long history in the Philippines.
 In the late 19th century, English became widespread in the Philippines from the time the United States occupied the country, followed by the Spanish-American War and the Philippine-American War, which further expanded the influence of English.
 After more than 100 years of development and evolution, Wing has become a widely spoken language in the Philippines, and the Philippines has become a bilingual country, which is very rare in Southeast Asia.
 According to the World Bank, the population of the Philippines has been rising since 1960, and in 2019 the total number of people in the country exceeded 100 million. The population has a strong desire to consume, with private consumption accounting for nearly 70% of GDP. With a population of over 100 million, the market has great potential.

In 2018, the U.S. GSP tariff preference for the Philippines was extended to December 31, 2020, covering 5,057 items. 2015, the EU granted the Philippines GSP+ treatment, allowing the Philippines to export more than 6,000 products to the EU at zero tariff. Japan has granted the Philippines tariff exemptions for some of its exports.

A: The Philippines has an online population of 76 million, an Internet penetration rate of 67.8%, and a smartphone penetration rate of 69%. Its population structure is dominated by young people, with more than 60% of the young population over 16 years old and a median age of 25.7 years old, resulting in a demographic dividend that is favorable to the development of the e-commerce market. The Philippines is an island nation located in the western Pacific Ocean of Southeast Asia, consisting of about 7,100 islands and islets. The capital is Manila, and Quezon City is the most populous city. According to the data released by the World Bank, the Philippines’ GDP in 2019 exceeded US$376.7 billion. Riding on the development opportunity of “One Belt, One Road”, the Philippines’ cross-border e-commerce enterprises are developing like hot tea.

A: Yes, but if the foreign shares exceed 40%, the registered capital of the company is at least US$200,000, and in principle, it needs to be paid up.

A: If a local company is registered and the foreign shares do not exceed 40%, it does not need to be paid up, but if it exceeds 40%, it needs to be paid up.

A: A Filipino company must have a president, treasurer, company secretary and compliance officer. The president may be a non-resident but must own shares in the company; the treasurer and compliance officer must be local residents (who may be non-citizens) and the company secretary must be a Filipino. In addition, due to the restriction on local company shares, the company must also have at least one Filipino citizen as a shareholder.