Registration with the SSS, PHIC, and HDMF

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Registered companies in the Philippines are required to register and submit their employees to 3 government agencies, namely, the Social Security System (SSS), Home Development Mutual Funds (HDMF), and the Philippines Health Insurance Corporation (PHIC). These government agencies handle the status of private company’s employees’ contributions and their benefits. These benefits are administered by the respective government agencies through their monthly salary basis to avoid penalties due to delay of monthly contributions.

Social Security System (SSS)

All private companies must apply to SSS to ensure the protection of the employees and their families as well.

Companies in the Philippines must register first in order to register their employees to SSS

What are the documentary requirements?

• SSS R1 Form (Employer Registration Form) – This form includes the company data such as Company name, office address, start of operation, contact details (telephone number and email address), and original signed by the Authorized signatories.
• SSS R1A Form (Employment Report Form)- This form contains the list of hired employees alongside their registered SSS number, date of hiring, and their monthly compensation.
• SSS L-501 Form (Specimen Signature Card)- This form needs to be signed by the appointed signatories and approved by the Authorized Signatories.
• SSS Web Registration for Employer – This form is provided after the registration of the company in SSS containing the details like company name, address, and name of the signatories with the original sign of the Authorized Signatories.
• Other Documents are as follows:
  • SEC registration documents, such as but not limited to SEC Certificate of Incorporation, Articles of Incorporation and By-Laws, etc.
  • Secretary’s Certificate or any equivalent document authorizing a third party to process the registration, if applicable
  • Original and Photocopy of valid IDs of Authorized Signatory/ies
  • Original and Photocopy of valid IDs of Authorized Representative.

Home Development Mutual Fund (HDMF)

The Government Agencies are responsible for collecting contributions used for funding salary loans, housing loans, and other benefits to ensure the protection of employees and their families as well.

What are the documentary requirements?

• Employer’s Data Form – This form is needed in order to register in Home Development Mutual Funds also known as Pag-IBIG funds, In this form, you need to fill out the important details referring to the company such as Company name, Address, Tax Identification Number (TIN), Company SSS number and Date of Operation, Originally signed by the Authorized.
• Specimen Signature Form – This form needs to be signed by three (3) appointed signatories and approved and authorized by the Authorized Signatories (President, Chairman, Corporate Secretary).
• eSRS Employer Enrollment Form: This form is needed in order to access the online status and updates of the company contributions and loans, Fill out the form with these details: Company name and address, authorized signatories contact and email address, and signature of the authorized signatories.

Note: The Home Development Mutual Fund (HDMF) must be registered second to the Social Security System (SSS) after registration.

Philippine Health Insurance Corporation (PHIC)

Philippine Health Insurance Corporation also known as PhilHealth with the assistance of the Department of Health (DOH) is a government corporation that provides health insurance assistance and affordable health care to the beneficiaries that may occur during their employment.

The Company is required to register with the PHIC, register their employee, and remit the monthly contribution based on their monthly salary.

What are the documentary requirements?

• PHIC ER1 Employer Data Record- Fill up this form with complete details: Company Name, Office Address, contact number/Email Address, Number of employees, and Signed by the Authorized Signatories.
• PHIC Er2 Report of Employee-Members – In this form, the company must declare the list of employees alongside the SSS/PhilHealth number, monthly salary, and date of employment in the company, signed by the authorized signatories
• PhilHealth Online Access Form (POAF) – This form is processed in order to access the online status of contributions and update, Fill out this form with the company name and contact details of the authorized signatories with its original sign.

Remember:

• All the documents must be printed at least (3) three copies and originally signed by the Authorized Signatories.
• Contact details and Email Addresses must be active and updated for receiving emails from these government agencies.

List of Valid Identification Card (ID)

PRIMARY IDs	SECONDARY IDs
1. Passport	PhilHealth ID
2. UMID IDs (SSS)	BIR ID
3. Driver’s Licensed	Pag-IBIG ID
4. Voter’s ID	Company ID

As we live in a modern world, where everything you see is digital. Everyone needs to be up to date and must conform to the new rules and regulations of the world. And as everything now can be seen online, be it pictures, videos, music, anything, all can be looked up on the internet. That is why the rights of individuals over their personal data and enforcing the responsibilities of entities who process them are being acknowledged in the Data Privacy Act of 2012.

From then an independent body was created under RA No. 10173 or the Data Privacy Act of 2012 which is the National Privacy Commission or NPC. It is mandated to monitor and ensure compliance of the country with international standards set for data protection. The Commission safeguards the fundamental human right of every individual to privacy, particularly information privacy while ensuring the free flow of information for innovation, growth, and national development. One of its functions is to develop, promulgate, review, or amend rules and regulations for the effective implementation of the DPA (Data Privacy Act).

The Registration Process is where a PIC or PIP shall create an account by signing up on the NPC’s official registration platform (NPCRS) where it shall provide details about the entity.

Step 1. Account Creation

a. Access the National Privacy Commission Registration System (NPCRS) at https://npcregistration.privacy.gov.ph

b. Upon signing up, the PIC or PIP shall input the name and contact details of the Data Protection Officers (DPO) together with a unique and dedicated *email address, specific to the position of DPO.

The DPO email address should be unique per PIC/PIP. The email address and Philippine Cellphone Number provided will be treated as the official contact channels.

Step 2. Registration Proper

a. Login using credentials.

b. Select the Type of DPO/DPS Registration

– During registration proper, the PIC or PIP shall:

1) Encode the organizational details; name and contact details of the Head of the Organization or Head of the Agency.

2) Encode Data Processing System(s) details; all Data Processing Systems of the PIC or PIP at the time of initial registration.

3) Encode the details of Compliance Officer(s) for Privacy if applicable.

4) Upload the prescribed supporting documents as provided under Section 11, NPC Circular No. 22-04.

5) Click “Save Registration”

c. For Notarization

1) Export DPO Form (PDF Format) automatically created during DPS Registration.

2) Print and sign the downloaded form (both DPO and Head of the Organization or Agency).

3) Have the completely filled out form notarized.

4) Scan, upload, and submit notarized DPO Form.

NOTE: The submission of the PIC or PIP shall undergo review and validation by the Commission. In case of any deficiency, the PIC or PIP shall be informed of the same and shall be given five (5) days to submit the necessary requirements.

Step 3. Download the Certificate of Registration and NPC Seal of Registration

– Once the submissions have been validated and considered complete, the PIC or PIP shall be informed that the Certificate of Registration together with the NPC Seal of Registration is available for download.

An application for registration filed by a PIC or PIP must be duly notarized and be accompanied by the following documents:

A. For government agencies:

Special or Office Order, or any similar document, designating or appointing the DPO of the PIC or PIP;

B. For domestic private entities:

1. For Corporations:

a) A duly notarized Secretary’s Certificate authorizing the appointment or designation of DPO, or any other document demonstrating the validity of the appointment or designation of the DPO signed by the Head of the Organization with an accompanying valid document conferring authority to the Head of Organization to designate or appoint persons to positions in the organization.

b) Securities and Exchange Commission (SEC) Certificate of Registration.

c) Certified true copy of the latest General Information Sheet.

d) Valid business permit.

2. For One Person Corporation (OPC)

a) A duly notarized Secretary’s Certificate authorizing the appointment or designation of DPO, or any other document that demonstrates the validity of the

appointment or designation of DPO signed by the sole director of the One Person Corporation.

b) SEC Certificate of Registration

c) Valid business permit.

3. For Partnerships

a) A duly notarized Partnership Resolution or Special Power of Attorney authorizing the appointment or designation of DPO, or any other document that demonstrates the validity of the appointment or designation

b) SEC Certificate of Registration.

c) Valid business permit.

4. Sole Proprietorships:

a) A duly notarized document appointing the DPO and signed by the sole proprietor, in case the same should elect to appoint or designate another person as DPO.

b) DTI Certificate of Registration.

c) Valid business permit.

C. For foreign private entities:

1. Authenticated copy or Apostille of Secretary’s Certificate authorizing the appointment or designation of DPO, or any other document that demonstrates the appointment or designation, with an English translation thereof if in a language other than English.

2. Authenticated copy or Apostille of the following documents, with an English translation thereof if in a language other than English, where applicable:

a) Latest General Information Sheet or any similar document.

b) Registration Certificate (Corporation, Partnership, Sole Proprietorship) or any similar document.

c) Valid business permit or any similar document.

Expanding a business internationally can be a lucrative venture, and the Philippines has emerged as a promising destination for foreign investors due to its strategic location, growing economy, and large English-speaking workforce. If you’re considering establishing a presence in the Philippines, registering a foreign branch or representative office is one of the viable options to explore. In this article, we’ll guide you through the process of registering a foreign branch/representative office in the Philippines.

Understanding the Difference between a Foreign Branch and a Representative Office:

Before proceeding with the registration, it’s crucial to understand the distinction between a foreign branch and a representative office, as each has its purpose and limitations:

1. Foreign Branch: A foreign branch is an extension of the parent company and carries out commercial activities similar to those of the parent company. It can engage in profit-generating activities, enter into contracts, and conduct business operations on behalf of the parent company. However, a foreign branch is subject to regular corporate income tax.
2. Representative Office: On the other hand, a representative office is limited to non-revenue-generating activities, mainly acting as a liaison or coordinating office. It serves to promote the interests of the parent company, conduct market research, and facilitate communication with clients and affiliates in the Philippines. A representative office cannot enter into contracts, make sales, or generate revenue. As a result, it is generally subject to a lower tax burden.

Step-by-Step Guide to Registering a Foreign Branch/Representative Office:

1. Pre-Registration Requirements:

• Reserved Name: Choose a unique name for your branch or representative office and reserve it with the Securities and Exchange Commission (SEC).
• Local Representative: Appoint a resident agent or representative in the Philippines who will act as the liaison between your office and local authorities.
• Bank: A treasurer-in-trust (TITF) account with the required paid-up capitalization shall be maintained with the bank as proof of such capitalization evidenced by a bank certificate and inward remittance, if applicable. TITF account is for deposit only and restricted for withdrawal except upon approval of the Securities and Exchange Commission (SEC) of the registration papers.

2. SEC Registration:

• Draft application to the Securities and Exchange Commission (SEC) online platform.
• Submit the necessary documents to the SEC, which may include:
  • i. Authenticated copy of the parent company’s board resolution approving the establishment of the branch/representative office in the Philippines.
  • ii. Authenticated copy of the Articles of Incorporation/Partnership with an English translation thereof if in a foreign language other than English
  • iii. Authenticated Audited Financial Statement or if unaudited, with 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 an audited financial statement with citation of the law or regulation on which it is based.
  • iv. Notarized proof of inward remittance such as bank certificate of inward remittance or credit advances
  • v. Endorsement or clearance from regulatory agencies, if applicable (e.g., Bangko Sentral ng Pilipinas for financial institutions).
• Pay the required registration fees and obtain the SEC Certificate of License to do Business here in the Philippines.

3. Other Registrations:

• Tax Identification Number (TIN): Register with the Bureau of Internal Revenue (BIR) to obtain a TIN for tax purposes.
• Local Business Permits: Obtain necessary business permits from the local government unit (LGU) where your branch/representative office will operate.
• Employer Registration: Register with the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG) if you plan to hire employees.

4. Bank Account Opening:

• Open a local bank account in the Philippines to facilitate financial transactions.

5. Post-Registration Compliance:

• Books of Accounts: Comply with accounting and bookkeeping requirements and maintain books of accounts in accordance with Philippine accounting standards.
• Annual Reporting: Submit annual reports to the SEC and other government agencies, as required.
• Renewal of Permits: Ensure timely renewal of business permits and registrations to operate legally in the country.

A Corporation is a legal entity that is separate and distinct from its owner or incorporators. It has legal rights and obligations similar to an individual. It can enter into contracts, loans, hire employees, pay taxes, etc. The ownership of a corporation is divided into shares of stock.

A Corporation issues the stock to individuals or other businesses, who then become owners or stockholders, of the corporation.

Advantages of a Corporation

• The risk and liability is limited only to the corporation. Owners are not personally liable.
• It is easy to increase capital through the issuance of stocks to investors
• It can be passed on to different owners
• It can exist indefinitely
• It has the capacity to act independently similar to individual
• The management or decision-making is shared by the board of directors, not the sole individual.

Disadvantages of a Corporation

• More costly to set up than a sole proprietor
• It is mandated by more government reportorial requirements and laws
• Higher capital requirements and operating cost
• Higher tax rates

Where to Register a Corporation?

Here are the government agencies where the corporation are required to register in the Philippines:

• Securities and Exchange Commission (SEC)
• Local Government Units (LGU) where your business is located:
  • Barangay
  • Mayor’s Office
• Bureau of Internal Revenue (BIR)
• If you have employees, you need to register with the following:
  • Social Security System (SSS)
  • Philippine Health Insurance Corporation(PHIC)
  • Home Development Mutual Fund(HDMF)
  • Department of Labor and Employment(DOLE)

Who may form a Corporation?

Any person, partnership, association, or corporation, singly or jointly with others but not more than fifteen (15) in number, may organize a corporation for any lawful purpose or purposes. Provided, that natural persons who are licensed to practice a profession, and partnerships or associations organized for the purpose of practicing a profession, shall not be allowed to organize as a corporation unless otherwise provided under special laws. Incorporators who are natural persons must be of legal age.

Each incorporator of a stock corporation must own or be a subscriber to at least one (1) share of the capital stock.

How much is the Capitalization?

Stock corporations shall not be required to have a minimum capital stock, except as otherwise specifically provided by special law. However, some highly regulated companies or corporations are required to have a minimum capitalization based on the industry or equity of that certain entity.

Some domestic corporations with more than 40% foreign equity are required to have at least U$200,000.00 minimum paid-up capital if the registering corporation intends to operate as a Domestic Market Enterprise

Basic Documentary Requirements

• Name Verification Slip (may be secured online or at SEC Name Verification Unit)
• Articles of Incorporation (AI) and By-laws (BL)
• Treasurer’s Affidavit
• Joint affidavit of two incorporators to change the corporate name (not required if already stated in AI)

Additional Requirements

• Endorsement/clearance from other government agencies, if applicable
• Clearance from other Department of the Commission*
• For Corporations with more than 40% foreign equity: Application Form for registration under the Foreign Investments Act of 1991 (R.A. 7042, as amended)
• Endorsement/clearance from (a) Philippine Economic Zone Authority (PEZA) for the applicant under R.A. 7916, (b) Subic Bay Metropolitan Authority (SBMA) or Clark Development Corporation (CDC) for the applicant under R.A. 7227 and (c) Cagayan Economic Zone Authority (CEZA) for the applicant under R.A. 7922

References:
Republic Act 11232 or Act of Providing for the Revised Corporation Code
Republic Act No. 7042, as amended, also known as the Foreign Investment Act of 1991 (FIA)

Starting your business right is crucial to its future success. Starting right means everything should be legal and registered. Registering a business in the Philippines requires entrepreneurs to comply with various requirements provided by relevant government agencies, such as SEC and DTI. Depending on your business entity, the documents you provide may differ from one or the other.

Where to Register?

Here are the government agencies where the company or entity is required to register in the Philippines and the stages of registration.

Stage 1: Register the Company Name with the following government agencies:

• Securities and Exchange Commission the registrant is any of the following:
  1. Domestic Corporations(Stock or Non-Stock)
  2. Partnership
  3. One Person Corporation or
  4. Foreign Corporations

• Department of Trade and Industry for Sole Proprietorship

Stage 2: Obtain Business Permits from Local Government Unit (LGU) where the business address is located

Stage 3: Register and process registration with the Bureau of Internal Revenue

Stage 4: Register as an Employer with the relevant government agencies, such as:

1. Social Security System
2. Philippine Health Insurance Corporation
3. Home Development Mutual Fund
4. Department of Labor and Employment

What are the capital requirements?

• Securities and Exchange Commission

Under the Revised Corporation Code of the Philippines or Republic Act No. 11232, Section 12.

“Stock Corporations shall not be required to have a minimum capital stock, except as otherwise specifically provided by special law.”

However, some highly regulated companies or entities are required to have a minimum capitalization based on the industry or equity of that certain entity.

There is no minimum capital requirement to form a Partnership. Partners can mutually decide the capitalization to start a partnership business unless otherwise, the partnership has foreign participation.

• Department of Trade and Industry

The Philippine Law does not recognize a Sole Proprietorship as an entity separate from its owner, there is no formal capitalization of a sole proprietorship. The assets of the owner and the assets of the sole proprietorship are one and the same which is why sole proprietors are limited by the amount of capital available.

Where to start the registration process?

For Corporations (stock or non-stock), partnerships, One Person Corporations and Foreign Corporations, the registration process will start with the Securities and Exchange Commission (SEC) using the SEC Electronic Simplified Processing of Application for Registration of Company (eSPARC).

The system allows the applicant or his duly appointed representative to submit the proposed company name and input details of the articles of incorporation for review of the Commission.

The Regular Processing of the ESPARC application form is grouped into six (6) steps. Each step is composed of sections. The applicant must be able to complete all six steps to enable him to submit his application.

1. Name Verification
2. Company Details
3. Capital Structure
4. Company Officers
5. File Uploading
6. Application Review

For Sole Proprietorship with Business Name, the registration process will start on the online platform of the Department of Trade and Industry (DTI), the Business Name Registration System (BNRS) wherein it is the responsibility of the proprietor to ensure that the proposed Business Name conforms to the terms and conditions set forth under Republic Act. 3883 or otherwise known as the Business Name Law.

A Business Name (BN) shall refer to any name that is different from the true name of an individual which is used or signed in connection with her/his business on any written or printed receipts, including receipts for business taxes, duties, and fees and withdrawal or delivery receipts; any written or printed evidence of any agreement or business transaction; and any sign or billboard conspicuously exhibited in plain view in, or at the place of her/his business or elsewhere, announcing his /her business.