Makati Manila

Business in Philippines: The Basics

If you have decided for retiring in Philippines and want to do business here, then you need to know the basic information in doing that in the country. Read further to know important information regarding doing business in the Philippines.

There are several kinds of business structure in the country that you can choose from in setting your business. You may set it up as single proprietorship, representative office, corporation, and partnership. Let us try to discuss the different organizational structures below;

  • Single or sole proprietorship. This structure is owned by an individual who holds full control of all its assets and suffers all the loses in event something wrong happens as well as enjoys all the profits gained by the business. Required for this is to apply for a business-name with the DTI or Department of Trade and Industry. For those who are in the Nacional Capital Region you can apply at Business Name Registration Center, Department of Trade and Industry, Bational Capital Region (DTI-NCR), Trade and Industry Building, 361, Sen Gil Puyat Avenue, Makati City. You can check their website at For those whose location are outside Metro Manila, you can apply at the nearest DTI-regional/provincial offices.
  • Representative Office is an office that deals with clients of its main company or parent company in the Philippines although it may not derive income in the country. It usually acts as communication center, promoter of the company’s products and disseminates information. This organizational structure is required to have at least thirty thousand dollar working capital.
  • Corporation. Is a structure established under the corporation code and is monitored by SEC (Security of Exchange and Commission). This organization contains at least five to fifteen incorporators with at least one share for each of them. The corporation must be registered with SEC. Minimum paid-up capital is P5,000.00 only.
  • Partnership. This organizational structure consist of two or more partners. This should be registered with SEC or Securities of Exchange and Commission with a minimum paid up capital of P3,000.00 only.

One common question that often asked is whether a foreign investor is allowed to own one hundred percent of company entity. Definitely yes, one hundred percent equality is allowed in all areas of investment under FIA or Foreign Investment Act, however there are several exceptions which include financial institutions and of course those who are included in the Regular Foreign Investment Negative List (FINL).

First it is important that we know the areas that are covered by Foreign Investment Act (FIA). FIA covers all investments with exceptions to banking and other financial institutions which are monitored and governed by the Bangko Sentral ng Pilipinas (BSP).

As for the Foreign Investment Negative List this only means that it irritates areas of economic activity whose foreign ownership is limited up to forty percent of outstanding capital stock in cases of partnership and corporation.

What is this Negative List?

List A refers to areas reserve to Filipinos under the Constitution and Special Laws, but not limited to Mass media except recording, retail trade, small scale mining, cooperative, practiced of licensed profession and many more where foreign ownership is not allowed. Other areas are operations and management of public utilities, ownership of land and advertising where only a minority of foreign ownership is not allowed.

List B includes sections that are defense related, the ones that has adverse effects in public health and morals and of course domestic market enterprises whose paid up capital not less than $200,000 as long as they make use of advanced technology that is determined by Department of Science and Technology or those who employs at least fifty person where the paid-up capital is lowered to $100,000 only to foreigners or non-Filipino.

The second common questions most foreigners ask is what kind of visa can be issued to foreign investors? It is SIRV or Special Investor Resident Visa which allows the owner to stay in the country for unlimited period as long as its investment exist and subsists. Thus, any foreigner except for those who are restricted nationals under the Foreign Service Code may apply for SIRV as long as he meets the requirements – He is not involved with any moral turpitude nor convicted with any crime; has not been admitted in any institution for mental disability or disorder; he is not affected with any contagious disease; and he is able to invest at least seventy-five thousand dollars in the Philippines.

One thing very important to keep in mind if you have any plans to make a living in the Philippines, make sure to operate legally which means that you have completed documents and you have the right visa to operate a business in the country. You do not want to find yourself in prison for not following the law. This is one common mistakes among foreigners thus it is very important that you know what you are doing and know the things that you should do first.

For you to have get successful in the Philippines, you have to be knowledgeable with legal matters regarding doing anything in the country for you to avoid any serious problem in the future. This is one common pitfalls of foreign investors which you can easily avoid if you know the do’s and don t’s in doing business in the Philippines.

Read further to know some of the do’s and dont’s in making a living in the Philippines:

  • Make sure to know what you are doing and know that you are complying with the law. Make sure that you are operating legally.
  • Business negotiations in the Philippines can be long since the pace in doing business in this country is quite slow so be patient.
  • When in a meeting, do not raise your voice or interrupt any discussions since this shows lack of respect with your business partners.
  • Dress conservatively and appropriately for every meetings you have for this gains you a lot of respect from your colleagues.
  • Join in the conversation and an easy-going conversations with your Filipino partners can ease the tension and makes them more open to you. Do not be surprised if they will ask you a lot of questions, just be ready for it.
  • If you are married to a Philippine national, then get ready to be influenced by immediate family and see how it affects your plans. Always there are positive and negative effects depending on how far you let your immediate Filipino family involved in the business.
  • Avoid any illegal dealings if you do not want to end up in prison.

Examples of Lucrative Ventures in the Philippines

  • Bar/Restaurant. One lucrative thing in the Philippines are bars and restaurants. Filipinos love to eat and love to hang around for fun. With the increasing number of call centers in the country, more and more young professionals who is earning above-average can afford to go to bars and restaurants after work just to unwind and relax after long day’s work. It is no wonder that bars and restaurants is one business which can really generate a steady income the whole year through.
  • Import-Export. Import and Export in the Philippines is increasing by the year. Products that Philippines exports includes Fruits, Coconut oil, petroleum merchandise, copper solutions, garments and semi conductors. And according to statistics the top prospects for these exports are United States with 16.7% followed by Japan with 15.7% and the rest are China, Netherlands, Hongkong, Singapore, Germany and South Korea.

    As for importation the Philippines imported around $60.78 billion worth of foreign goods in year 2008 alone. Top commodities imported into the Philippines are plastic, chemicals, grains, iron, transport gear, machinery, mineral fuels and electronics and suppliers to the Philippines are United States, Malaysia, Thailand, South Korea, China, Saudi Arabia, Singapore and Japan.

    The products which Philippines exported to United States includes semi conductors, computer system accessories, cotton apparel and household goods, vehicle components and accessories, food oils and oil seeds; electric apparatus and parts; fish and shellfish, telecommunication gear; furniture and baskets.

    Products that are imported from America to the Philippines are semiconductors, wheat, computer accessories, industrial machines, animal feeds, dairy solutions and eggs, telecommunication equipment, electric apparatus and civilian aircraft.

  • Internet Based Business. One of the fastest growing things these days are internet based business. Anywhere you go, you can certainly work on it. It isn’t going to be easy at the start, but when you found right business online, you will be on your way to earning a lot giving you the financial freedom that you have always dreamed of.
  • Real Estate Agency. Real Estate agency in the Philippines is certainly doing well and it is predicted to do great until 2015. As seen, the Philippine population has increased dramatically so that the demand for home increases too. That is why you will see lots of new property ventures whether they are subdivisions, condominiums and office space. It will be a great investment too to put your money in this real estate thing.
  • Agriculture. Another best thing to invest if you are in the Philippines is crop growing. So far, the best crop is Pili nut that is now gaining government support.

If you have decided to make your living in Philippine then you need to know the basic information in doing business.

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