How to set up a business in the Philippines?
By Nicolas Fauchille, Triple I
Investing in the Philippines is a great project to consider based on the current economic situation of the country and the forecast for the next decades. However, registering a business is not a fun and easy process at all. Get ready for the red tape! If you plan to register your business, the first step that you should consider is inevitably to discuss with an expert on this field that will provide you all the guidance and accurate information about the suitable entity, capital, location and ownership structure. Finding the right and trusted consultant that will guide you and help you to manage your future operation is certainly a challenge.
Aside from the very bureaucratic process that you will encounter, as a foreigner, you must know that certain industries and business models are restricted and doing business in those sectors will require strategic decisions provided by consulting firms with deep expertise in this market.
Retail Trade Law provides several ownership restriction for foreigners. Setting up a recruitment agency allows a maximum foreign ownership of 25%, plus several capital requirements. Acquisition of lots is actually forbidden to foreign investment as long as this investment is not considered for business purposes (hotel, farming,etc), in this case, only 40% of the capital can be foreign owned. Many other industries and activities are restricted to foreign investment as well. You can find the complete list published by the SEC here.
Only once you have well determined what will be right structure, investment, partner and location, you must follow an unusual registration process that comprises of 16 steps and that will take you approximately 40 days.
Solo Proprietorship, Private Limited Companies, Partnerships, Foreign Companies, Regional Headquarters, there is no lack of legal entities in the Philippines but there is indeed a lack of knowledge in what is the suitable entity to match your goals and concerns in this economy.
Remember that it is extremely important to register your business properly to avoid any legal problems once the business operations starts.
Nicolas Fauchille, Account Executive
Triple I, 18F Salcedo Towers, 169 H.V. Dela Costa Street, Salcedo Village, Makati City, Philippines
T: +63 917 520 91 36
published: March 2013