Why you should invest in the Philippines

Why you should invest in the Philippines

If you seek a viable overseas investment, starting a business in the Philippines may just be the ticket. More than just being a beautiful island getaway, this tropical country offers excellent business conditions for foreign investors.
In recent years, the Philippines has experienced rapid economic growth. Aside from tourism, the country has seen huge development strides in different industries. Among those seeing the most aggressive growth are agriculture, energy, mining, logistics, electronics, and the BPO (business process outsourcing) industry. Here’s a compelling list of reasons why you should invest in the Philippines:

A wealth of global business opportunities

The Philippines is part of the South East Asian economic region. As an ASEAN (Association of South East Asian Nations) member, the Philippines is part of the ASEAN Free Trade Agreement (AFTA). This means that your business can expect to gain easy access to exceedingly attractive trade opportunities. The exceptionally competitive domestic economy also gives you abundant in-country trading options.
With the Philippines actively taking part in the ASEAN Trade in Goods Agreement (ATIGA), you will enjoy perks that allow trade and business activities to flourish.

Ideally located near international business hubs


Located smack in the center of the South East Asian region, the Philippines is recognized as a strategic gateway between the east and the west. This prime business spot puts you just hours away from other major Asian capitals, including Singapore, Tokyo, Beijing, and Seoul.

Besides capitalizing on the country’s ASEAN membership, businesses that elect to go the manufacturing route can use the Philippines as a platform to gain access to other nearby Asian economies and to potentially create partnerships with global powerhouses.

Foreign business-friendly economy

The signing of Executive Order No. 65 on October 29, 2018 introduced a new set of foreign investment rules. Foreign investors are now allowed 100% ownership in five key investment sectors. According to the National Economic Development Authority (NEDA), overseas investors can run fully-owned businesses such as:

  • Wellness centers
  • Internet businesses
  • Financial and investment companies (e.g. adjustment companies, financing companies, lending companies, and investment houses)
  • Training centers for short-term, high-level skills development
  • Outfits that offer higher education in non-professional subjects


Build-Operate-Transfer (BOT) investment schemes are also supported by the Philippine government. With the privatization and deregulation of government corporations, public-private partnerships in the following industries are being encouraged:

  • Shipping
  • Banking
  • Insurance
  • Telecommunication
  • Power


EO No. 65 also allows foreign investors a 40% stake in the construction and repair of locally-funded public works. Previously, foreigners could own only up to 25% equity in such contracts.

Projects under the Republic Act No. 7718, however, remain an exception to this rule. These are projects that are subject to international competitive bidding.

Tax advantages


Foreign-owned companies also enjoy attractive incentive packages. Among the most notable is the Double Tax Agreement (DTA) or the Tax Treaty. Investors residing in any of the 45 countries that signed the DTA, including citizens of the US, can enjoy tax exemptions and advantages on their income from investments in the Philippines.

Depending on your business, you can enjoy reduced corporate income tax, a variety of other tax exemptions, and duty-free importation of certain equipment and materials. When you pass the accreditation of the Philippine Economic Zone Authority (PEZA), you’ll be eligible for several more tax cuts, as well.

Integration of enterprise outsourcing


Enterprise outsourcing or the BPO industry in the Philippines is a prominent driver of the local economy. The country is home to over 800 registered BPO companies, half of which provide computer or IT-related services. Medical transcription and animation production houses also account for a huge chunk of business.

The Philippines is considered the “BPO Capital of the World,” with revenues topping $24 billion in 2016 alone. Total earnings for 2020 in the BPO industry, the country’s leading foreign exchange earner, are projected to hit $50 billion pesos.

BPOs employ over 1.2 million employees. Companies based in the United States account for 60 percent of all BPO services provided, making them the leading user of BPO services in the Philippines.

Educated workforce


One of the main draws of opening a business in the Philippines is the highly skilled and educated workforce. Finding capable managers and trainable personnel is easy.

The country has one of the highest English proficiency rates in Asia, second only to Singapore. It boasts a English Proficiency Index (EPI) of 60.14 (high proficiency). The EPI analyzes and ranks the English skills of non-native English speaking countries. Moreover, a large portion of Filipino workers have the “neutral” accent that BPOs and other foreign-owned companies largely seek, allowing the Philippines a huge advantage over other countries.

The Philippine workforce is relatively young, with a median age of 25.7 years. A labor participation and productivity rate averaging 65.01% (from 1990 until 2020) is one of the reasons why the country is among the premier labor markets in the region.

Want to learn more about starting a business in the Philippines for foreigners? Get in touch with the experts at FilePino today! Call us at +1.806.553.6552 (USA) or +63.917.892.2337 (Philippines).