Investing in a small business

Before you start something in Angeles City you might want to spend some times talking to ex-pats there about their experience.  You might change your mind after a few conversations. 

One important thing to consider is which economy you plan to connect into.  If you want to make an USA kind of income then you are going to have to have tourists as your client base.  For the most part ex-pats that live here are living on a Philippine budget.  Your not going to get rich owning your own business here.  However, you can cover your living expenses. 

Here is an example:  Rent is 2500, electric: 3500, water: 1000, food: 150 per day: 5000, internet/tv: 1300 = 13,300 php per month.  Plus any extra you  want to spend.  The billiard table alone brings in about 10,000 per month.  If you know how to run a Sari Sari store you can make your cash flow.  Anyway, just an example.

You need to live here for 1 or 2 years and learn the culture before you think you are going to hire employees and make a profit.  My biggest advice is to start very very small, and dont be in a hurry.  It really is going to take you 1 or 2 years to learn enough to gain your confidence.  That said, maybe my experience is different than others. 

hi all, i wish to move and live in Philippines and do business there but after reading most of the stuff
on expat log is quite scary to start small business or invest with the 60/40 idea in mind.

Business in the Philippines is not directed to benefit a foreigner or foreign company, but a Filipino National.  Interestingly enough you can research the Philippine Laws online to see how they apply to the type of business you wish to start.  The laws are not like the stated and you have to jump around to get all the relevant information you are looking for.  In the Philippines the laws basically says, you can invest in a business, but 60% shall be owned by a Filipino National and the other 40% can be held by a foreign entity.  If you can find a Filipino investor that will match your 40% investment with their 60% interest, then the investment may be worth while.  If you are going to invest 100% of the funding for a company and have a Filipino National as the 60% interest, then the company becomes successful, you will see the 60% silent owner take over the business and you are out your investments and hard work.  If you think about incorporating into a business, read the laws for the Philippines first.  There is a substantial bank bond required for most corporations in the Philippines, plus what ever the investment in the business requires.

Owning land in the Philippines is another thing a foreigner can not do.  You may lease for a long term a piece of land, but if you make any improvements to the land, then it belong to the land owner, not you.  Foreigners may own a condo here, but are limited to only 40% of the available units for sale in the development.

There are all types of legal hoops that may be required to legally own anything here such as, Required Documents, Customs Duties for Imported Items, BIR, Taxes, City Permits, Brgy. Clearances, etc., etc...   There are a lot of people that tell you there are ways around some of this, but get separate legal advice from someone not related to whom you are dealing with.  There are also a lot of foreigners that had to leave for violating the laws of the Philippines.

If you have a Filipino spouse, then you can put Your project in her/his name and do what you want, but it is all hers/his.  There are a few exception on ownership level of married persons, but it still follows closely the 40% you, 60% theirs.

This is life in the Philippines.

This is a beautiful country to reside in and enjoy life in, but everything is slanted in favor of the Filipino people.

Hope this helps, RAC

Hi mate, thanks for the infor and i shall keep this in mind as its quite helpfull.

I realize that this original thread is over a year old, but ill comment anyway.. I rent a home in the province on national highway for 6k per month. I turned my front yard into a carinderia for about 500 usd.    on average I make about 800 pesos per day after all expenses. its not much but it pays all my bills and then some. my point is, it don't take much to start a business here. the only thing I needed was a barangay clearance to start the business.. that took about 4 days and a couple hundred pesos.  nothing else was required. if you want a simple life its very possible in the province. but if your looking for more money, then manila or another big city would be a better option.

Hi,ok sounds interesting, thanks for the infor but don't have to be a permanent resident to do that type of business or citizen .

I been on a tourist visa for over 5 years.. nobody cares what you do if its a small business in the province. besides I have a gf and she deals with the people and barangay clearance

Hi, cool stuff, thanks a lot for this information,  it's real help full, thinking of starting something between 50k usd to 100k usd.

I would never invest that much money in the Philippines. there is no need unless your looking to make big money.. for me, as long as I have my living expenses paid for, im a happy man

Ok mate I see your point,thanks anyway.

Not all kinds of business is at 60/40. Only those listed as Nationalised Industries are considered to have a foreign ownership limitation. Get a real business advisor rather than hearing stuffs online.

Hope this helps.

Do not invest in anything, You will loss the $20k in the PH
You may want to be a PT expat? 1/2 a year then work 1/2 in the USA
But just to dumb 20K into anther country
most business do not last 3 years in the PH's

you seem to be very knowledgeable about living in the Philippines..  how many years have you lived here in the Philippines four1cents?

four1cents, the existence of foreign corporations, big or small, for more than 5 years here in the Philippines belies your claim.

just happened to read the thread and found an interesting comment from four cents.  am just curious as to where you four cents got the information that most businesses do not last three years here in the Philippines?

yes.. I was being a bit sarcastic when I replied to four1cents. he has never lived here nor has he even visited here as far as I can tell. add to that the fact that a few days ago he was asking information on where to go to rent a home here...  go figure

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four1cents wrote:

Do not invest in anything, You will loss the $20k in the PH
You may want to be a PT expat? 1/2 a year then work 1/2 in the USA
But just to dumb 20K into anther country
most business do not last 3 years in the PH's

disagree.. im into events and marketing business.. and we are now our 5th year..

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