January 6, 2020 |
Given its large population, high level of urbanization, and strong consumer demand, it’s no wonder that the Philippines is chosen by many foreigners as the perfect place to start a business. The country offers unlimited business opportunities, from real estate ventures to outsourcing.
If you plan on venturing into business in the Philippines, here’s everything you need to know:
Industries in which to start a business
As a foreign business owner, you may face limitations on the sorts of businesses you may be allowed to engage in. Industries such as mass media, cooperatives, and small-scale mining, for instance, are absolutely off limits to foreign investors. There are, however, many other industries that you can participate in. These are your top options:
- Travel and tourism – The Philippines is home to some of the most sought-after destinations. The abundance of must-visit sites makes travel and tourism one of the biggest industries in the Philippines. In 2019 alone, international tourist travel saw a 20.81% boost over the previous year.
- Real estate – The country’s population continues to increase at a pretty steady clip and, with it, demand for real estate has surged. The robust growth of industries like the BPO industry, for one, has led to an invariable demand for office space. Within a fairly sustainable market, investing in real estate has the potential for excellent returns.
- Agriculture – A top industry in the Philippines, agriculture has always played a significant role in the country’s economy. Look into crop cultivation, livestock production, and fishing.
- Retail – The growth in the number of shopping malls, department stores, retail outlets, and convenience stores in the country continues to be robust. Investing in the thriving retail industry in the Philippines is bound to spell success for you.
- Business Processing Outsourcing (BPO) – One of the top contributors to the Philippine economy, the demand for BPOs show no signs of waning. This fast-paced industry continues to provide plenty of employment opportunities to Filipinos while encouraging economic activity and investments.
- Construction – The Philippine construction industry has been expanding, largely due to the number of infrastructure projects spearheaded by the government.
- Healthcare – Health expenditures have grown over the past couple of years. This makes the healthcare industry one of the industries that promises a high investment potential.
Foreign investment laws and regulations
If you’re looking to start a business in the Philippines, you will need to understand the country’s foreign investment laws and regulations. As we said earlier, while there are certain industries foreigners aren’t allowed to invest in, many other industries not only allow foreign investments but even offer fiscal and non-fiscal incentives. Among them are tourism, real estate, and manufacturing.
To encourage investment, foreigners are now allowed to own 100% of small and medium-sized enterprises, provided they meet the necessary requirements, of course. Primary among the requirements is that foreign investors must have a minimum paid-up capital of $100,000 to start.
Registering a business name
Company formation in the Philippines starts with the registration of your proposed business name with one of two agencies: These are the Department of Trade and Industry (DTI) for sole proprietorships and the Securities and Exchange Commission (SEC) for partnerships and corporations.
Establishing a physical office
Having a business address is one of the requisites to starting a business locally. Without one, you’ll find it practically impossible to proceed with your business registration. In fact, one of your first steps to registration is obtaining clearances from the Barangay where your office is located.
Securing permits and licenses
These legal documents are required of foreigners who hope to launch a business in the Philippines:
- DTI registration – If you’re putting up a sole proprietorship, you must register your trade name with the DTI.
- SEC registration – Partnerships and corporations, on the other hand, must register their business name with the SEC.
- Bureau of Internal Revenue (BIR) registration – The Certificate of Registration from the BIR is one of the most important documents you’ll need to start your business. One major requirement for BIR registration is your Tax Identification Number (TIN). You may use either a personal TIN or a business TIN.
- Barangay clearance – A document issued by the Barangay Secretary, this clearance shows that your business has complied with all the barangay’s requirements.
- Business permit – Also called the Mayor’s permit, this license allows your business to operate in the city or municipality that it’s in.
- SSS, PhilHealth, and Pag-Ibig Fund registration – All businesses are obligated to register themselves and their employees with these agencies.
Business visa requirements
Foreigners who plan on staying in the country for more than 3 to 6 months must obtain a business visa from the Philippine Embassy or Consulate at their country of origin. Also known as a temporary visitor’s visa, the requirements to secure this type of visa include your passport, accomplished application form, and proof of your status as a businessman.
FilePino offers a wealth of experience and expertise in helping you start your business. New to doing business in the Philippines? We can help. Get in touch with us today at +63.917.892.2337 or contact us here.
