Tips for Foreigners Investing in the Philippines
Business in the Philippines is intriguing. Despite the recent economic downturn, the country remains prime ground for investment. The English-speaking population is vast, making the language barrier easier to cross for American companies. The Philippine real estate market has been engaged in high-quality development of office space since the outsourcing boom, and government has improved the national infrastructure tremendously. However, there are some who find the local bureaucracy slightly confusing for registering a business.
Some issues
One of the details that can surprise foreign investors in the Philippines rests on the law concerning foreign company ownership. Philippine law imposes a limit for foreign individuals in corporations. They can only own up to 40% of the company, while the rest must be owned by Filipino citizens. The government office responsible for corporations, the Securities and Exchange Commission, will verify whether or not a business complies with this.
Pertinent agencies
Whenever a business needs to set up, owners must deal with numerous departments in the Philippine government. For a business with a single owner, foreign investors need to register with the Department of Trade and Industry initially. Companies will also need to comply with regulations from the Bureau of Internal Revenue for financial and tax information. Finally, a company starting a Makati office should check the requirements imposed by the Makati city government.
Special areas
There are areas in the country that are authorized to provide various incentives for foreign investors as well as local businesses. These include the Freeport zones, such as Subic Bay, and the Philippine Special Economic Zones. Businesses can find office space there and register with the relevant government agencies – usually the PEZA – to see which incentives and exemptions apply to their industry.
Office space
For foreign investors, there is also the question of where to get set up. A Makati office is an obvious choice, as the city is the financial capital of the country. It is filled to the brim with other companies, and the competition for office space is tight. There are other areas with more office space and good facilities, but have not yet gotten the prestige Makati has.
The bureaucracy can be daunting for foreign investors to navigate, though once someone has all the necessary paperwork, conducting business in the Philippines is relatively easy. The Philippines is an excellent place for multinational companies to set up shop as a gateway into the rest of Asia. The local government has several projects to accommodate foreign investment, along with other incentives, all to encourage foreign businessmen to invest.
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