PAGCOR Gambling License

Advantages of Holding a PAGCOR Gambling License

The Philippines is a growing economy gradually improving its legislation to attract more foreign investors and eventually create another leading economic center in the region. It boasts a pool of highly qualified talents with excellent English language skills that are available at reasonable costs. Moreover, the government makes continuous efforts to improve the internet infrastructure across the country which makes online businesses more viable and manageable. Major operators are licensed by the PAGCOR benefiting from the local economic environment which is an indication that the Philippines offers worthwhile business opportunities for gambling businesses.

For gambling businesses, the tax system is fairly favorable which can make a PAGCOR gambling license cheaper than elsewhere. The licensees are imposed a 5% Franchise Tax on their gross revenues from gambling operations, in lieu of all other taxes. This means that they’re exempt from Income Tax, VAT, and other regular taxes. It’s also worth noting that foreign corporations are entitled to receive tax credits.

Gambling Regulations in the Philippines

The PAGCOR is the primary regulator in the Philippines that supervises the Entertainment City (a compact equivalent of Las Vegas), casinos scattered across the country, and online casinos operating abroad. Citizens of the Philippines are only allowed to play at land-based casinos regulated by the PAGCOR, provided they are at least 21 years of age, and online casinos are only licensed to offer their services to foreign players outside of the Philippines.

The following pieces of legislation and regulations are applicable to the PAGCOR gambling licensees:

• Interactive Gaming Act of 2003
• The Casino Implementing Rules and Regulations (CIRR)
• An Act Taxing Philippine Offshore Gaming Operation (Republic Act No. 11590)
• The Anti-Money Laundering Act (AMLA)
• An Act Further Strengthening the Anti-Money Laundering Law, Amending for the Purpose Republic Act No. 9160, Otherwise Known as The “Anti-Money Laundering Act of 2001”, as amended (Republic Act No. 11521)
• An Act Designating Casinos as Covered Persons Under Republic Act No. 9160, Otherwise Known As the “Anti-Money Laundering Act of 2001”, as amended (Republic Act No. 10927)
• An Act Further Strengthening the Anti-Money Laundering Law, Amending for the Purpose Republic Act No. 9160, Otherwise Known as the “Anti-Money Laundering Act of 2001”, as amended (Republic Act No. 10365)
• An Act to Further Strengthen the Anti-Money Laundering Law, Amending for the Purpose Sections 10 and 11 of Republic Act No. 9160, Otherwise Known as the “Anti-Money Laundering Act of 2001”, as amended, and for Other Purposes (Republic Act No. 10167)
• An Act Amending Republic Act No. 9160, Otherwise Known as the “Anti-Money Laundering Act of 2001” (Republic Act No. 9194)
• An Act Defining the Crime of Money Laundering, Providing Penalties Therefor and for Other Purposes (Republic Act No. 9160)

The PAGCOR has also issued the following regulatory manuals:

• Casino Regulatory Manual for Greenfield Zone Licensees
• Casino Regulatory Manual For Entertainment City Licensees
• Casino Regulatory Manual For Clark Special Economic Zone Licensees
• Casino Regulatory Manual For Fiesta Casino Licensees

In the Philippines, the combat with and prevention of money laundering and terrorist financing is taken very seriously as the government aims to prevent the gambling industry from being exploited for conducting criminal activities. The laws, among other obligations, require casino owners to implement risk management policies and keep records of their customers for at least 5 years. Players must provide detailed information upon registering with a gambling platform. Casino owners are required to allow compliance checks whenever the Philippine Anti-Money Laundering Council (AMLC) suspects a case of money laundering or terrorist financing. AML/CFT legislation applies to land-based casinos, online casinos, ship-based casinos, and other games and sports.

The PAGCOR Anti-Money Laundering Supervision and Enforcement Department (PASED) is also responsible for the enforcement of AML/CFT legislation in the casino industry. The authority is allowed to perform a variety of supervisory activities that include preventive measures, sanctions, and other remedial actions. The PASED consults with the AMLC, other local and international counterparts, and casino operators to develop, improve, and implement relevant policies.

Top Online Casinos in the Philippines

Types of PAGCOR Gambling Licenses

In the Philippines, there are a variety of licenses available depending on the licensable activity. The most common license is an Offshore Gaming License, the licensees of which are called Philippine Offshore Gaming Operators (POGOs). POGOs are Philippine-based online offshore gambling companies that offer services to players outside of the country. This type of license is granted by the PAGCOR. Licensed businesses can offer a vast range of popular gambling activities – slots, blackjack, roulette, live dealer games, and other games.

The Offshore Gaming License is divided into the following categories:

• Online Casino – a type of online gambling that operates real-time casinos on the internet and usually caters to a random number of games
• Sports Betting – a form of gambling that involves predicting the results and placing a bet on a particular sporting event
• Sports Betting on Regulated Wagering Events – regulated by other jurisdictions and caters to live event audio and visual feeds to consumers

Other relevant licenses are also granted by the PAGCOR:

• Local Agent Accreditation
• Special Class of BPO
• Customer Relations Service Provider
• Live Studio and Streaming Provider
• IT Support Provider
• Strategic Support Service Provider
• Gaming Software/Platform Provider
• An Additional Operating Site to a Building Other Than That of the Existing Site
• Additional Operating Site to a Building With an Existing Operating Site

Philippines

Capital	Population	Currency	GDP
Manila	109,035,343	PHP	$ 11,420

Requirements for PAGCOR Gambling License Applicants

To be eligible for a PAGCOR gambling license, you first have to incorporate a company in the Philippines. Other requirements may vary depending on the type of license you’re applying for. If you wish to gain deep insights into specific requirements for a particular type of license, please reach out to our experienced lawyers here at Regulated United Europe and we’ll arrange a personalized consultation for you.

To apply for a PAGCOR gambling license in the Philippines, you should generally prepare at least the following documents:

• A letter of intent addressed to the Chairman and CEO of the PAGCOR
• A Personal Probity Form containing the names and details of all key officials including directors, and company secretary
• A Company Probity Form containing the details of the company
• A business plan
• An organizational chart indicating persons occupying positions within the company
• Evidence of the physical location of the company within the jurisdiction
• Signed Copy of Industry Code of Practice
• Copies of passports of shareholders, directors, and company secretary
• Police clearance certificates of shareholders, directors, and company secretary
• A detailed document of internal Customer Due Diligence (CDD), including Know-Your-Customer (KYC), procedures as prescribed by the AMLC
• Proof of payment of the application fee

Offshore Gaming License application fees:

• Online casino – 50,000 USD (approx. 45,000 EUR)
• Sports Betting – 40,000 USD (approx. 36,000 EUR)
• Sports Betting on Regulated Wagering Events – 40,000 USD (approx. 36,000 EUR)

The fees for other license applications are as follows:

• Local Agent Accreditation – 20,000 USD (approx. 18,000 EUR)
• Special Class of BPO – 100,000 USD (approx. 90,000 EUR)
• Customer Relations Service Provider – 50,000 USD (approx. 45,000 EUR)
• Live Studio and Streaming Provider – 40,000 USD (approx. 36,000 EUR)
• IT Support Provider – 20,000 USD (approx. 18,000 EUR)
• Strategic Support Service Provider – 20,000 USD (approx. 18,000 EUR)
• Gaming Software/Platform Provider – 40,000 USD (approx. 36,000 EUR)
• An Additional Operating Site to a Building Other Than That of the Existing Site – 10,000 USD (approx. 9,000 EUR)
• An Additional Operating Site to a Building with an Existing Operating Site – 5,000 USD (approx. 4,500 EUR) per floor for every 3,000 sqm of floor area

The following License fees are only applicable to the Offshore Gaming License:

• Online casino – 200,000 USD (approx. 180,000 EUR)
• Sports Betting – 150,000 USD (approx. 135,000 EUR)
• Sports Betting on Regulated Wagering Events – a one-time payment of 150,000 USD (approx. 135,000 EUR)

Online casinos and sports betting licensees are also subject to a one-time performance/security bond fee of 300,000 USD (approx. 271,000 EUR). A one-time performance/security bond fee of 50,000 USD (approx. 45,000 EUR) is applied to a Special Class of BPO licensees, Customer Relations Service Providers, Live Studio and Streaming Providers, IT Support Providers, Strategic Support Service Providers, and Gaming Software/Platform Providers. Remote Gaming Platforms
Offshore Gaming License renewal fees:

• Online casino – 50,000 USD (approx. 45,000 EUR)
• Sports Betting – 40,000 USD (approx. 36,000 EUR)
• Sports Betting on Regulated Wagering Events – 40,000 USD (approx. 36,000 EUR)

The renewal fees for other licenses are as follows:

• Local Agent Accreditation – 20,000 USD (approx. 18,000 EUR)
• Special Class of BPO – 100,000 USD (approx. 90,000 EUR)
• Customer Relations Service Provider – 50,000 USD (approx. 45,000 EUR)
• Live Studio and Streaming Provider – 40,000 USD (approx. 36,000 EUR)
• IT Support Provider – 20,000 USD (approx. 18,000 EUR)
• Strategic Support Service Provider – 20,000 USD (approx. 18,000 EUR)
• Gaming Software/Platform Provider – 40,000 USD (approx. 36,000 EUR)
• An Additional Operating Site to a Building Other Than That of the Existing Site – 10,000 USD (approx. 9,000 EURE)
• An Additional Operating Site to a Building with an Existing Operating Site – 5,000 USD (approx. 4,500 EUR) per floor for every 3,000 sqm of floor area

How to Establish a Company for a PAGCOR Gambling License

Over the recent years, the Philippine government has made some changes to simplify and streamline the process of company formation in the Philippines, especially for foreigners. Regardless of the efforts, the process is still more complex than for the local businesspeople. Therefore, we strongly recommend consulting with our experienced lawyers here at Regulated United Europe who will be delighted to offer the most suitable and cost-efficient solution for your gambling business, including the comparison of other jurisdictions.

In the Philippines, there are a variety of legal business structures but among the most common ones is a Corporation which is similar to a Limited Liability Company. You should note that full foreign ownership isn’t allowed. Provided that all the documents are in order and the required steps are followed through, a new business can be incorporated within 8 days.

Capital requirements depend on the foreign equity bracket:

• 0% foreign equity (100% Filipino-owned) – 100 USD (approx. 91 EUR)
• Less than 40% foreign equity – 100 USD (approx. 91 EUR)
• Greater than 40,01% foreign equity – 200,000 USD (approx. 181,000 EUR)

To reduce capital requirements for a company with greater than 40,01% foreign equity, you can use the following means:

• Employ at least 50 Filipino citizens, and the required capital will be reduced to 100,000 USD (approx. 91,000 EUR)
• Prove the use of advanced technology in the company’s operations, and the required capital will be reduced to 100,000 USD (approx. 91,000 EUR)
• Export at least 70% of your products or services, and the required capital will be reduced to 100 USD (approx. 91 EUR)

Other requirements for a Philippine Corporation:

• 2-15 incorporators (the majority must be residents of the Philippines)
• At least 4 officeholders
  • A president acting as the company’s signatory (no residence requirement)
  • A corporate secretary, responsible for the company’s administration (must be a resident of the Philippines)
  • A treasurer, responsible for the company’s finances (must be a resident of the Philippines)
  • An anti-money laundering compliance officer (must be a resident of the Philippines)
• The capital can be transferred once the company has opened a local bank account

The following documents are required to establish a Corporation for a PAGCOR gambling license:

• A Notarized Memorandum of Association
• Notarized Articles of Association
• 2 valid IDs of each shareholder
• An incorporation application form
• A verification slip form
• A copy of the municipality permission letter
• A notarized bank certificate
• For foreign corporation subsidiaries, a foreign investment application form
• A notarized treasurer’s affidavit
• A joint affidavit of 2 incorporators
• A written undertaking to change the name of the corporate by the trustee or director
• A clearance certificate from other government agencies
• A list of members and contributed amount certified by the secretary
• A confirmation of the paid registration fee
• An employee data form
• A community tax certificate
• Clearance of location and Barangay
• Proof of fire safety and electrical inspection
• An occupancy certificate and a building permit
• A contract of the office lease, if applicable

Company registration fees are as follows:

• Company name verification – 100 PHP (approx. 1,70 EUR)
• The registration of the bylaws – 1,000 PHP (approx. 17 EUR)
• The registration of stocks – 150 PHP (approx. 2,50 EUR)
• The transfer of stocks – 320 PHP (approx. 5,30 EUR)
• A filing fee of 0,2% of the authorized capital stock or the subscription price of the subscribed capital stock, whichever is higher, but not less than 1,000 PHP (approx. 17 EUR)
• A legal research fee of 1% of the filing fee but not less than 10 PHP (approx. 0,17 EUR)
• Legal research fee for the bylaws – 10 PHP (approx. 0,17 EUR)
• An approval from the Barangay – 300-1,000 PHP (approx. 5-17 EUR)

To open a company in the Philippines, you should take the following steps:

• Apply for company name approval and company registration at the Philippine Securities and Exchange Commission (SEC)
  • This step will require the submission of the Memorandum of Association, bylaws, a joint affidavit of 2 incorporators, and the company’s treasurer’s affidavit
• Pay company registration fees, the request for which is issued by the SEC after the application for incorporation
• Obtain clearance from the Barangay which is the district of your chosen region in charge of administration for the local government
  • This step will require the submission of the certificate of registration from SEC, 2 valid IDs, and proof of address of your company’s local office
• Obtain a business permit from the local Mayor’s Office
  • This step will require the provision of the certificate of registration from SEC, 2 valid IDs, Barangay clearance, and proof of address of your company’s local office
• Register your company with the Bureau of Internal Revenue (BIR) and receive a Taxpayer Identification Number (TIN) for your company, as well as register your account books and up-to-date invoices
  • This step will require the submission of the application form (BIR Form 1903), the certificate of registration from SEC, Barangay clearance, business permit from the Mayor’s Office, 2 valid IDs, and proof of address of your company’s local office
• Register as an employer with the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (HDMF or Pag-IBIG Fund)

GAMBLING LICENSE IN PAGCOR

Requirements for PAGCOR Gambling License Holders

In addition to the Franchise Tax, Philippine Offshore Gaming Operators are required to pay various other taxes in the Philippines. The Act Taxing Philippine Offshore Gaming Operation distinguishes between gaming and non-gaming revenues and therefore different taxes are levied on different sources of revenue generated by a Philippine-based gambling operator.

The non-gaming revenue of a Philippine Offshore Gaming Operator is subject to a 25% Income Tax on the taxable income sourced in the Philippines and abroad. Foreign-based Offshore Gaming Operators are subject to a 25% Income Tax levied on income sourced within the Philippines.

The sales by VAT-registered persons to Philippine Offshore Gaming Operators are VAT-exempt. Services rendered to Philippine Offshore Gaming Operators subject to Gaming Tax by service providers are also VAT-exempt.

Philippine Offshore Gaming Operators who employ foreign nationals should know that all foreign citizens regardless of residence and who are employed and assigned in the Philippines by an Offshore Gaming Operator or its service provider shall pay a minimum final Withholding Tax of 12,500 PHP (approx. 207 EUR) or 25% on their gross income whichever is higher. Furthermore, all foreign employees of Philippine Offshore Gaming Operators and their service providers, regardless of the nature of employment, must secure a Tax Identification Number (TIN). If a Philippine Offshore Gaming Operator employs or engages foreign nationals without a TIN, a fine of 20,000 PHP (approx. 331 EUR) per non-compliant foreign employee is paid.
List of Gaming System Service Providers.
All casino-related marketing activities, including the following, must be consulted with the PAGCOR prior to their implementation:

• Any membership or loyalty program by which points, credits, or rewards may be earned from the playing of any game in a casino, or points, credits, or rewards may be redeemed within the casino premises whether for the playing of a game
• Any contest, lucky or raffle draw, or tournament in which a prize may be won directly or indirectly as a result of visiting any casino or playing any game in a casino, or a prize may be redeemed on or used for the playing of any game in a casino
• Any activity, program or incentive, or any combination of them, which gives publicity to, or otherwise promotes or is intended to promote the visit of a casino or the playing of any game in a casino

Our team here at Regulated United Europe will be delighted to support you in incorporating a company and obtaining a PAGCOR gambling license. With dedicated legal advisors, tax experts, and financial accountants at your side, you will find the incorporation and application processes easy, frictionless, and transparent. Contact us now to schedule a personalized consultation and set the stage for long-lasting success.

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