Today article was written by: SouthWestern University
Starting A Business In The Philippines As A Foreigner: Are you escaping work? Let’s go to Palawan. Are you tired of the city lights? Batanes, here we go! The Philippines is one of the most visited countries for its rich culture and beautiful scenery. However, have you ever thought of starting a business in the Philippines? This country can be an ideal place to start your own business.
Foreigners can also start a business here despite the common myth that they can only open up if married to a Filipino citizen. This blog will guide you on how you can start a business in this country as a foreigner.
The Reason Why You Should Start A Business In The Philippines As A Foreigner
There’s no doubt that Filipino people are hospitable, welcoming, and warm. However, aside from that, the Philippines is a favorable market for local and foreign companies because of the country’s abundant natural and mineral resources, stunning tourism destinations, and unique culture. Who wouldn’t want to venture into a business here?
Here are some of the reasons why you should consider venturing into a business in the Philippines as a foreigner.
Endless business opportunities
This country has been innovating and developing throughout the years. Given its people’s diverse culture and strong buying power, this country offers an excellent opportunity for new business ideas. See for yourself what options and a variety of business ideas this country has to offer. Further, It opened many markets to investors and provided consumers with a range of choices thanks to the domestic competitive market.
Strategic and ideal location
The region’s major cities can be reached by air in four hours. In addition to providing an access point for millions of ASEAN consumers, it is also a hub for international shipping and aviation traffic for European and American companies. Also, there is a wide range of co-working spaces available, almost every Filipino citizen can speak English, and labor is affordable. The Philippines is not called the heart of Asia for nothing.
Quality Human Resources
It’s without a doubt that almost every Filipino can speak English since it is taught in school. The country’s literacy rate is 99.08%, making the Philippines one of the world’s largest English-speaking countries. Moreover, it is also required for Filipinos to finish a college degree to land an excellent job, which means most Filipinos are college graduates. These people prioritize their education a lot. Pinoys are the Philippines’ most significant competitive advantage over all other Asian countries.
Accessing air, water, and cyberspace, liberalizing inter-island shipping and domestic aviation resulted in further improvements. There are more than 7,000 islands in the Philippines, making it challenging to link every island. However, with the initiative of its government, a well-developed communication, transportation, business, and economic infrastructure links the three major islands and makes the Philippine economy unique.
Industries You Can Explore
Trying out and exploring different business ideas can do you good. However, finding and picking the industry that you are passionate about would be better. There are various industries you can venture into; however, here are five of the best endeavors you can try when looking at starting a business in the Philippines as a foreigner.
Travel and Tourism
The Philippines is known for its beautiful and mesmerizing islands, making it one of the best tourist spots in the world. The demand for travel-related services is vast, including services, packages, offers, accommodations, trips, transport, food, and beverage.
IT, BPO, Business Services
BPO and technology are some of the fast-growing industries in the Philippines. Since this country is one of the biggest English-speaking countries, resulting in a boosted popularity of call centers. Different countries are outsourcing to the Philippines.
Filipinos are using mobile technology to fulfill their shopping needs, driven by online shopping and delivery. No one would even notice the inflation since its overall spending and consumption are still at their peak.
Due to the low labor cost of the Philippines, the country is a good location for setting up a manufacturing business, producing items including food and beverages, petroleum, transport, industrial equipment, textiles, and others.
Being a tropical country, it has enormous agrarian land suitable for different crops. It is also a good industry since poultry and livestock are produced in the region to meet local needs. Moreover, the fact that most Filipinos prefer rice is an excellent reason to start in this industry.
Business Requirements for Foreigners
Starting a business in a foreign country can be challenging, right? Requirements, papers, documents, here and there. The process can be time-demanding, especially if you will need the help of a legal and business expert.
You might also be needing a Filipino business person and a local to help you start your business in your chosen location. You can also get a business degree. For instance, you can enroll yourself in SouthWestern University Business School to familiarize yourself with how a business works in this country and which industries are a hit. There might be industries restricted to Filipinos, but many can also be owned 100% by foreigners.
Here are needed documents you must prepare:
- SEC Registration
- Mayor’s business permit
- DTI Registration
- BIR Registration
- SSS, PhilHealth, PAGIBIG fund registration
- Articles of incorporation
- Government-issued ID
- Community tax certificate
- Clearance certificate from other government agencies
- The complete employee data form
- Fire safety and electrical inspection certificate
- Foreign investment application form (only for foreign corporation subsidiaries)
- Proposed business name and registration form
- Registration fee
- Treasurer’s affidavit
- Verification slip form
- Payment of registration fees fixed on territorial based with documentary stamp
- Barangay clearance (business location)
- Notarized bank certificate
- Occupancy certificate
Step For Starting A Business In The Philippines As A Foreigner
Step 1. Choosing the right industry
Make sure to pick the industry that fits your personality. Moreover, please note that not all businesses are allowed for foreigners. It would help to visit a government agency that caters to companies in the Philippines first before taking action.
Step 2: Register your business name
Choosing the type of business to start is crucial. There are three categories you can choose from:
- Sole Proprietorship – Visit the Department of Trade and Industry.
- Partnership and Corporation – Visit Securities and Exchange Commission.
- Cooperative Business – Visit Cooperative Development Authority.
You would also have to prepare the documents mentioned above. Business registration with the BIR and the City/Municipal Office requires registration certificates with the SEC or DTI. So, you must register your business through them before you can start.
Step 3: Select office location or address
Starting a business in the Philippines requires a physical address. Getting an address, no matter how small, may have a significant influence on your company’s ambitions. If you are unsure where to register your business, you may generally lease a serviced office location to accept your registration paperwork.
Here are a few cities you might want to consider. You can set up your business in some of these best cities based on the number of procedures, the amount of time it takes to process, and the cost.
- Davao City
- Pasay City
- Mandaluyong City
- Marikina City
- Lapu Lapu City
- Valenzuela City
- Taguig City
- General Santos City
Step 4: Open a bank account to pay the minimum deposit
Business registration in the Philippines includes opening a bank account and depositing a minimum of PHP 5,000 ($100) and additional requirements like business articles and identification documentation.
Step 5: Apply for Clearance and Business Permits
As a new business entity in the Philippines, you must get the necessary permits, licenses, tax requirements, and clearances. It would also help to check with your local region to see if there are any extra requirements. Don’t worry, after all these procedures it will be all worth it. Starting a business in the Philippines as a foreigner is a great option for many ex-pats.
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