Video · From the Philippines
Do Freelancers in the Philippines Need a US Company? Maybe Not
Do you need a US company to get paid as a freelancer or VA in the Philippines? Maybe not: you can be paid as self-employed, and under the VAT threshold you can choose a set rate on your gross receipts. 5:03 long, published .
Transcript
What the video says
0:00Can a Filipino own a US LLC from the Philippines?
It's past midnight in Cebu City, and Paolo is still at his laptop. His clients are in America, so his evenings run late. Before he logs off, he types one question. Do I need a US company to get paid? We're BaseAcross. We set up US companies for founders outside America, so we'll be straight with you. If he does need one, a Filipino living here can have one. No social security number, and no trip to the US.
And none of it needs him awake in American hours. It all happens online and in writing.
0:35Do freelancers and VAs need a US company?
So, the honest answer first. Maybe not. A freelancer or virtual assistant here can be paid as self-employed, with no US company at all. Under the VAT threshold, you can even choose a set rate on your gross receipts, instead of the graduated rates and percentage tax. A US company adds US filings, so it needs a reason. Card payments on your own site are a common one, since the big card processor doesn't serve the Philippines directly.
Paolo wants to sell a course, so he has one.
1:10Do you need Bangko Sentral approval, and does the BIR tax it?
At home, two offices care about this company, and they behave very differently. The first is the central bank, the Bangko Sentral. You don't need its approval to invest in a US company. Your own dollar savings can go in with no limit. Dollars you buy from a bank have a yearly limit, and the bank asks for its form. And under its rules, the company's profits don't have to come home or be changed into pesos.
The second office is the BIR, the tax office. A Filipino living here is taxed on income from anywhere. What the company pays Paolo counts, even if the money never comes home. The guide puts it in one line. Lightly regulated, and fully taxed.
1:55Wyoming LLC or Delaware C-Corp, and an EIN without an SSN
The company itself is the quick stop. A Wyoming LLC suits a business you run yourself. A Delaware C-Corp suits raising from investors who want shares. It needs a registered agent, an address in that state for legal papers, not where you work. Then the EIN, the company's US tax number. Without a social security number, it's a paper form to the IRS. Your Philippine TIN isn't part of it.
You'll pay in US dollars, so check the peso amount and what your bank or card
2:29Which US bank accounts work from the Philippines?
adds. Plan the bank before anything else, because this is the trap. The US fintech bank most videos recommend doesn't open for people who live in the Philippines. It goes by where you live, not your passport. A multi-currency account can give a company run from here US account details, and another payments provider serves the Philippines too. Ask each one whether it'll open in your company's name.
With the company and a US account, Paolo can apply to the card processor. It reviews him, and it can say no.
3:04How do you fund the company from the Philippines?
How does money move between Paolo and the company? Here's the guide's own illustration. Say he sends two thousand dollars from his own dollar account to the company. It's his own foreign currency, so there's no approval and no limit. If he'd bought those dollars from his bank instead, they'd count toward the yearly limit, and the bank would ask for its form. Either way, the company records it as money from its owner, and it goes on its yearly IRS report.
That's an illustration, not a quote. Going the other way, write down whether each payment to you is pay for work or
3:43Do you pay US tax, and is there a US–Philippines treaty?
profit. Then tax, on both sides. At home, income tax paid abroad can be credited against Philippine tax, within the limits the tax code sets. A US company stays a foreign company for Philippine tax, wherever it's run. How the BIR treats what it pays you is for your adviser. In America, work you do in the Philippines generally isn't US income, so there's often no US tax on it. There's a tax treaty in force, but for a services business it matters less.
The company still files a report with the IRS every year, even without sales, and missing it is expensive. It's usually due in the spring, and there's a form to ask for more time, filed before the deadline.
4:30What to do first, in order
Put together, the route runs like this. See your adviser first, about how the BIR will see the company and whether staying self-employed suits you. Then pick the account you'll use, and only then form the company and get the EIN. Put the IRS report and your BIR returns on one calendar. The full guide, with every source and a checklist for your adviser, is linked below. And Paolo?
He still works late. He just doesn't have to stay up for any of this.
The founder in the video is an example, not a customer. The rules in it were checked when it was made; the guide carries the current sources.
The guide
Costs, documents, timelines and the rules in the Philippines, with sources.
Read the guide for the PhilippinesWatch on YouTube