Setting up a business in the Philippines has become a lot easier fuelling from the growth of its economy. Starting a business in the Philippines has many advantages such as the country boasts well-educated, English speaking human capital. Approximately 8 million are college graduates, and 16 Million+ population has completed High school. The Philippines is a member of the Association of Southeast Asian Nations or ASEAN. There are several benefits to be part of ASEAN, such as people doing business in Philippines can do business in the region – extended market with greater access and lower costs.
Company Formation in the Philippines
Multiple options are available depending on the nature of the business for Company Formation in the Philippines. To legally conduct business in the Philippines, a company should be registered with either the DTI or the SEC. Once registered with one of the latter, you will be required to obtain local company business permits.
Specific company structures are a better choice for individuals intending to open a small business in the Philippines. Foreign investors generally may own and control any business within the limits of the Philippine foreign investment negative list.
The company registration process in the Philippines
As we have mentioned in one of our earlier pages for company incorporation in Philippines, there 3 types of business entities that can be registered for business 1) Sole Proprietorship 2) Partnership 3) and Corporation. Here some more insights are shared for setting up a company in the Philippines.
The Official Gazette page has the full list of the places where business registration can be done and is hosted by the government of the Philippines. To register Corporation in Philippines requires as set of procedures. For registering the company, it has to be done on the Business Name Registration site. Three preferred names have to be chosen to complete the procedure in case the first choice is already taken. There are various fees totaling up to 5000 PHP depending on the business type. The business operation certificate once complete and received is valid for five years.
The process after registering the name then depends on the type of business structure. You can further register your business with the Department of Trade and Industry, Bureau of Internal Revenue, Local Barangay Office and the Social Security System. A mayor's business permit and other permits might be required depending on the type of sector of the business. Documents can be downloaded online, but you may still need to visit the offices of the relevant authorities in person in some cases.
To register a sole proprietorship you'll need to submit documents such as:
- Business name registration application
- Proof of ID (passport or special investor residence visa), plus passport sized photos
- Proof of minimum inward payment
To register a partnership, name registration certificate along with articles of partnership, signed by at least two directors is required. You may also need further permits depending on the type of business you intend to open.
To register a foreign owned corporation in Philippines you'll need the name registration certificate and other documents, including:
- Relevant forms (F103 or 104)
- Authenticated board resolution authorizing the opening of an office or branch in the Philippines
- Articles of incorporation
- Financial records
- Proof of minimum inward payment
Legal documents required to run a Business in the Philippines
- SEC registration – For registering as a partnership or corporation
- DTI registration – For registering your business trade name (BTR)
- Mayor’s business permit – For getting the license to operate in the city or municipality and payment of your local business taxes.
- BIR registration – For getting the TIN, official receipts and invoices, registering your books of accounts, and paying your national internal revenue taxes (Income tax, VAT or Percentage Tax, Withholding Taxes, etc.).
- SSS, PhilHealth, and Pag-Ibig Fund registration – for registering yourself or company as an employer and for remitting your employees’ contribution together with your employer’s share.
- Usually, the BIR and the City/Municipality Office require the certificates of registration with the SEC or DTI before a business can be registered with them. Thus, you need to register through those offices to start commencing your business.
Like UAE, Philippines boasts of industrial free zones. These zones are beneficial to foreign investors who use the Philippines as a gateway to South East Asia. Companies are 100% tax exempt for 4-8 years, including corporation tax and customs duties. Currently, some of the several free zones which the Philippines propagate include Subic Bay Freeport Zone, Check Freeport Zone, Zamboanga Ecozone, and Freeport, Cagayan Special Economic Zone. Philippines being a member of the Association of Southeast Asian Nations (ASEAN), the businesses incorporated in the Philippines can enjoy membership benefits, like tariff cuts on goods traded, limited complication to trade barriers with other ASEAN countries.
Business Incorporation services are needed to enter a new market to save time and familiarize with the local rules and regulations. The service requirements are varied; some organizations require accounting and bookkeeping services and others, consultation for intellectual property to safeguard assets. Business Setup consulting services cover all the challenging aspects of starting a business in a new market such as the Philippines. To know more about our services, write to us at [email protected]