Branch Office versus Subsidiary in the Philippines
A Philippine subsidiary is a separate domestic corporation; a branch is an extension of the foreign corporation licensed to do business in the Philippines. The choice changes liability, governance, capital, contracting, tax coordination and exit.
Comparison
| Question | Branch | Subsidiary |
|---|---|---|
| Legal personality | Same foreign corporation | Separate Philippine corporation |
| Liability | Foreign head office is directly exposed | Generally contained in subsidiary, subject to law and guarantees |
| Governance | Resident agent and head-office authority | Philippine board and officers |
| Ownership | No Philippine shares | Shares held by parent and any other investors |
| Capital | Assigned-capital and activity rules may apply | Foreign-equity and domestic-market capitalization rules may apply |
Decision factors
- Exact Philippine activities and foreign-ownership limits
- Need to isolate liabilities
- Customer or regulator preference for a local entity
- Funding, profit remittance and tax treatment
- Required board control and local officers
- Future investment, sale or joint venture
- Exit and closure process
Registration
Both structures require SEC action. A branch presents authenticated foreign-company documents, appoints a resident agent and establishes authority to operate. A subsidiary completes domestic incorporation through the SEC registration system.
Sources and review
- Revised Corporation Code, provisions on foreign corporations
- Foreign Investments Act as amended
- SEC official website
Verified 22 September 2026. Capital, tax and sector rules require transaction-specific verification.