The Philippines is often viewed as a place where we dream of escaping from work for the sake of relaxation. But have you ever thought about starting a business in the Philippines? With its abundant natural and labor resources, talent pool and competent, bilingual professionals, the Philippines is an ideal place to start a business. And in the past few years, more and more entrepreneurs are heading to the Philippines to start a business. The average annual GDP growth rate is 6-7%, which makes the population of the island paradise a little richer every year, and increases the purchasing power of the population.
The country is moving forward with a highly educated population and abundant natural resources. It is one of the ten largest producers of copper, chromite, and gold in the world. Thus, a business start-up plan in the Philippines is rewarding and beneficial for any entrepreneur in the world. The country not only provides you with incentives and offers but also a fertile infrastructure and a friendly business environment.
Advantages of starting a business in the Philippines
- The labor force in the Philippines is skilled and inexpensive
- The Philippines is located in the heart of Asia. The country is also linked to the region’s four main capitals, which connect one billion people from Asian countries.
- There are special economic zones, with a preferential tax regime, which is only 5% of the proceeds.
- The country has an open and friendly economy that allows 100% ownership of an enterprise for a foreign investor in most sectors.
- There is a developed infrastructure of communications, transport, economy, and business.
- The company in the Philippines has access to the broad ASEAN market and its vast trading opportunities.
The procedure for opening a business in the Philippines for a foreigner consists of the following steps:
- To register a company in the Philippines, check the company name with the relevant authorities and register it. The approximate cost of registering online is around PLP 40 in the first month.
- To register as a sole proprietor, you need to contact the Department of Commerce and Industry (DTI), and for a partnership, register your company name with the Securities and Exchange Commission (SEC) registry.
- Once registered, you will receive a pre-registered Taxpayer Identification Number (TIN) for your company when you receive your SEC certification. This TIN must be officially registered by you or any of your partners in another office – the Bureau of Internal Revenue (BIR). The BIR will then issue you a Certificate of Incorporation (COR). It is valid for 5 years.
- Open a corporate bank account with a minimum deposit of 5,000 Philippine pesos.
- Also, do not forget to prepare the Articles of Association, as many Filipino banks will ask for a document before opening an account.
- Once you locate your office in the Philippines, you will need to obtain a business location permit. You can then apply for a business permit with your local government, that is, a municipal or city office.
- Businesses that lease commercial premises must enter into a lease agreement. Companies that operate on private land must obtain ownership of the land.
- Get the mayor’s permission. The mayor’s requirements vary from municipality to municipality, but basically, the list includes a lease, a residence permit, a sanitary permit, a fire safety permit, and a communal tax certificate.
- Now that you have registered your business, you need to consider the requirements of your employees. Make sure they are registered with the Social Security System (SSS), PhilHealth, Housing Mutual Fund (HMDF) / Pag-IBIG, and the Bureau of Internal Revenue (BIR).
- You can also register with an intellectual property rights service that can help you protect your business-related intellectual property.
So, if you are considering starting a business in the Philippines, do it! The Philippine government provides great support to foreign entrepreneurs to start a business, creating an enabling environment for this.
