When it comes to doing business in the Philippines, compliance with local regulations is essential. The Securities and Exchange Commission (SEC) is the primary government agency responsible for regulating corporate and securities laws in the country. It also ensures transparency, accountability, and proper documentation for all business entities operating or engaging with the Philippine market.
One of the key documents issued by the SEC is the Certificate of Non-Registration. This document is particularly required for Non-Resident Foreign Corporations (NRFCs) to prove that they are not registered with the SEC and are not conducting business in the Philippines.
If your business involves international clients or foreign entities, understanding this process is crucial to protect your interests and to ensure smooth transactions with the SEC and other government agencies.
What is a SEC Certificate of Non-Registration?
A SEC Certificate of Non-Registration, also known as SEC Negative Certificate, is a document issued by the Securities and Exchange Commission (SEC). It verifies that a company is not registered or does not have any records with the SEC. This certificate is required for Non-Resident Foreign Corporations (NFRCs) to prove that they are not doing business in the Philippines for legal compliance, verification, and other purposes.
What is a Non-Resident Foreign Corporation (NRFC)?
A Non-Resident Foreign Corporation (NRFC) is a corporation that is not registered in the Philippines and does not engage in business within the country. NRFCs typically do not have a physical presence, employees, or local operations but may earn income from Philippine sources, such as royalties, dividends, or passive investments.
Corporations under this are generally subject to a tax equivalent to 25% of gross income received from all sources within the country. NCFRs also also enjoy the benefit of relief from payment of tax as provided in the tax treaties.
Why Should You Get a SEC Certificate of Non-Registration?
A SEC Certificate of Non-Registration serves various purposes, including:
Legal Requirement
In the Philippines, government agencies require a SEC Certificate of Non-Registration as one of the requirements for NRFCs to register or be accredited to do business in the country.
Tax Compliance
A SEC Certificate of Non-Registration can prove the non-registration status of the NFRC client, which validates the VAT zero-rated sale. This is essential during a BIR audit.
Company Verification
Organizations may request the certificate from the SEC to verify if a subject company is registered or prove a claim about its non-registration status. This can be helpful in various scenarios, i.e. determining the legal standing of a company or assessing whether it is subject to laws that apply only to SEC-registered companies.
Due Diligence
The SEC Certificate of Non-Registration can be required for due diligence processes, such as those in investment evaluations, partnership agreements, and confirmation of company status in real estate transactions.
Where to Apply for a SEC Certificate of Non- Registration?
You can apply at the SEC main office in Metro Manila or any SEC extension office in other cities. Online applications are also available by sending an email to the SEC Company Registration and Monitoring Department (CRMD). It’s best to check the SEC’s official website for the latest guidelines.
How to Process a SEC Certificate of Non-Registration?
To process a SEC Certificate of Non-Registration, follow these steps:
Prepare the Required Documents
Prepare the documents that may be required by the Commission for processing the certificate, such as a request letter stating the purpose of obtaining the certificate and other supporting documents.
Submit a Request
Visit the SEC main office or the appropriate SEC extension office to submit a request for certification. You may also send your request through email to the SEC Company Registration and Monitoring Department (CRMD).
Pay the Fees
If you submitted your request via email, you will receive an acknowledgement reply within a few days, along with a Payment Assessment Form (PAF). Settle your payment through SEC-accredited payment channels and email proof of payment to the SEC.
Issuance of Certificate
Once payment is confirmed, the SEC will verify records and issue the SEC Certificate of Non-Registration. Processing usually takes one (1) to three (3) weeks, depending on the volume of requests and transactions handled by the CMRD.
Need further information and assistance regarding SEC Certificate of Non-Registration? Talk to our team at Duran & Duran-Schulze Law in Bonifacio Global City, Taguig, Philippines to know more about the requirements and process. Call us today at (+632) 8478 5826 or +63 917 194 0482, or send an email to info@duranschulze.com for more information.
