Foreign Investment

Rep Office, Subsidiary or JV in Philippines? Compared With Your Vietnam Options

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Scenario: a Vietnamese IT services firm wants a Manila office to support clients, having heard the Philippines offers a tax-perked “regional headquarters” model. The truth: the Philippines once had RHQ/ROHQ (regional headquarters) with special tax perks — but the CREATE reform changed that.

Philippines: RHQ/ROHQ — the “regional HQ” model and the CREATE reform

  • Representative office (RO): SEC-registered — promotion and research only; no trading, no Philippine income.
  • Regional HQ (RHQ) / regional operating HQ (ROHQ): the model for multinationals siting regional brains — formerly with special preferential rates (ROHQs were once taxed at 10% instead of 30%).
  • The CREATE reform (RA 11534): fundamentally changed perks — ROHQs moved to the regular rate but qualify for the new time-bound incentive regime. No more “permanent 10% tax”.
  • Subsidiary: an independent Philippine legal person — today’s most common model for substantive operations.

Vietnam: no “regional HQ” — and no “permanent 10%” for offices either

Vietnam has no RHQ/ROHQ model. Representative offices under Decree 07/2016/ND-CP: 5 years, no trading — and no tax perks for ROs, since an RO earns no income and is not a CIT taxpayer.

To hub in Vietnam:

  • 100% foreign-owned subsidiary: IRC under Investment Law 143/2025/QH15 (effective 1 March 2026) + ERC under Enterprise Law 2020 (amended by Law 76/2025/QH15, effective 1 July 2025) — tax perks if eligible (10%/15 years for high tech).
  • Perks attach to projects, not “headquarters”: unlike the Philippine ROHQ (perks attached to the model), Vietnamese perks attach to specific investment projects.

Compared: perks attached to the model vs to the project

CriterionPhilippinesVietnam
Regional HQRHQ/ROHQ (formerly specially perked)No such concept
Current perksPer CREATE (time-bound)Per project (Law 67/2025)
Ordinary RORO (SEC) — no tradingDecree 07/2016 — no trading
“Commit” modelSubsidiary (PH legal person)Subsidiary (IRC + ERC)

The lesson: never decide on old policy

1. The “10% ROHQ tax” is history. Post-CREATE, Philippine regional-HQ perks fundamentally changed — check the current regime, not old brochures.

2. In Vietnam, perks follow projects: tax perks require an eligible investment project recorded on the IRC — “siting a headquarters” alone generates no perks.

3. IT is the textbook sector: both countries open IT services to foreign capital; the difference is the Philippines once “bought” regional HQs with tax perks, while Vietnam “buys” tech projects with project perks.


Frequently Asked Questions

What are the Philippines’ RHQ/ROHQ?

The regional HQ / regional operating HQ model for multinationals in the Philippines. ROHQs formerly enjoyed a special preferential rate (once 10%); after the CREATE reform (RA 11534), perks moved to the new time-bound regime — no more ‘permanent 10%’.

What did CREATE (RA 11534) change?

The Philippines’ corporate tax reform law (RA 11534): cutting the regular rate and fundamentally changing incentives — including regional-HQ (ROHQ) perks.

Does Vietnam have RHQ/ROHQ like the Philippines?

No equivalent. Vietnam has no ‘regional HQ’ model with dedicated perks; tax perks attach to specific investment projects (recorded on the IRC).

Do Vietnamese ROs get tax perks?

No — an RO (Decree 07/2016) earns no income, so it is not a CIT taxpayer and gets no dedicated tax perks.

Do Philippine subsidiaries get perks?

Yes — a subsidiary is an independent Philippine legal person enjoying CREATE-regime perks if eligible. Today’s most common ‘commit’ model.

Should we pick the Philippines for the ‘10% ROHQ tax’?

No — regional-HQ perks changed after CREATE. Model decisions must rest on the current regime, not old ‘10% tax’ brochures.