Are foreigners allowed to establish a business in the Philippines

Invest your money and keep it back in your country of origin *80%... calculate a monthly draw to age ninety including a conservative (3-5%) interest rate (50yrs old, a 40yr draw) ... by the time your 90 you won't care about the money anymore and your filipino relatives will probably take care of you beyond that if you were good to them - hahaha ... your draw is what you factor as your living salary and will define how you live in context to where your at ... 5%, buy a small "pre-owned" apartment/condo in the Phil's (in mid-sized city with things to do) and rent it out (till you have personal need for it) ... In a more province based location, 10% goes to shared deed based property with your spouse in the Phil's, and the other 5% goes to small "diversified" businesses (trikes, small fishing boats, agriculture/livestock - to family or community members for a cut of the product - for personal use or for sale) local to your family.  Keep the small businesses related to basic needs such as (Transportation and Food)... thinking sustainability as opposed to profit.  Expect and learn from the idea that some of your small business ideas will fail, be stolen, or driven away by local political 'corruption' (something seldom factored in by expats), and simply remember your 'real' income comes from your investment stipend from abroad. 

If when figured that your investments abroad can't support this model, then you probably haven't saved enough yet to move to the Phil's.

I always say do not burn both your bridges! Maintain your investment abroad as well as the country you are in!

kakamaker wrote:

Thanks Hideo

so what i understood is that the best thing to do is to go to square one and start this business under a philippino name...right ?

it pays to have a consultant or research on your own. most people think that you need to marry filipino or have a filipino business partner. THEY ARE ALL WRONG but not really entirely wrong. Actually, there are businesses that can be 100% foreign owned and there are businesses that is 40% foreign owned and 60% filipino owned.

Try to secure a TIN no. from the Bureau of Internal Revenue on the kind of business you want to enter, tell them as a sole proprietor, partnership, or corporation but solely run by a foreigner! Because you need this to start a business! See what they will tell you! Please ask the name of the officer who will assist you!

Hi I m an australian married to a filipina for last 5 years.i have setup a cyber cafe business under my wife's name and bought a piece of land (less than 300sqm) under her name. Since I m stil visiting Phil as a tourist (visa free entry) can I still own a land (residential)? And have a business under my name? I will apply for 13a resident visa next year and also would like to know how much funds (bank balance) we need to show (including cafe business and land) in order to apply for that visa. Or if could suggest any good informative website or migration agent etc. Thanks heaps.

Yes and investments of foreigners are covered by the Philippine Law  Foreign Investment Act (R.A. 7042, 1991, amended by R.A. 8179, 1996) - please google!

Just be careful who you deal with though.

Thanks Cynthia

Your welcome!

Thanks for your info. I have another question actually. Its pretty dumb one but i will still ask. i did post that on the blog incase someone has the answer to it.

Hi there,
iI m from Australia. Just curious how much bank balance myself or my wife need to show for 13a visa to Philippines. I understand that this visa grants you probationary stay for first year in the country before applying for permanent unlimited stay. but is it ok to come back to australia for 3-4 months to work and return to Phil again? what i mean is what if i get 13a visa and enter phil and then stay there for 3 -4 months and come back to australia for 3 months to work and go back again for 3-4 months. will i be still eligible for permanent visa after one year of probationary visa? or if someone has similar experience pls any info will be much appreciated. Thanks in advance

Do u think it makes sense? I am looking forward to status in Phil but cant afford to stay here for straight one year. rather i can be here 3-4 months and then go back work in australia for 3 months and come back again. thanks

Hi!,

Just want to share my knowledge about foreigners  doing business in the Philippines.  First, you must be sure of what you want: retire in ph and spend the remaining of your life time here and find a filipina wife, or your purpose here is to be a big time businessman.

Lets talk about the first. you come here to marry a filipina woman and just endulge in small business as additional income. The most important thing is you must know how to blend to our culture. I have known a lot of foreigners who are not happy with their stay here, because they treated the filipinos as below their level.  They dont mingle with the locals, they dont talk with people and in short, they just rely to the filipina wifes family to communicate.  Another thing is that, be informed that filipino culture is very strong in family support. It is only in our country that even married children can stay with the parents and continue asking for support,   likewise, parents when they grow old, they still stay with the children until they die.

I you are good to your filipino in-laws, they will give back goodness to you. While i admit some are taking advantage of your financial capacity, majority are not.  Most met their filipina girls in clubs, so what family do you expect to meet?

My sister married british 15 years ago,  she is a phsycology graduate and work for few years in england, until they finally decided to come home. They are living comfortably here, they have a big house by the beach and have some small business.

The problem is my brother in-law, for many years of stay, still he cannot blend with the
locals. My sister is doing everything because he don't talk to people. Now he is not completely happy.

If your purpose in coming here is to become a big time businessman, then prepare for a bigger investment and deal with the right institution. So if you have enough for retirement only and depend on your monthly pension, don't engage in big time business without proper planning, network and trusted partner.

If you just want additional income, take it slowly, settle down first, find the right girl before you engage in small business.

If you are a foreigner from a country the U.S, Europe or other rich countries,  live like a filipino when you are in the philippines. Blend well and then you will understand why its more fun in the philippines. Anyway, the reason why you choose this country is because your money cannot support retirement in other rich countries. That spells why other foreigners are happy and others are complaining.

I have also work and live in the middle east and Singapore, no problem. The secret is you must know how to integrate to the local culture. Thanks.

Johnx

Hi!   Hawk911,

I truly understand your situation as i have a Canadian brother in church who comes here 6 months and go back to Canada to work for 6 months.

I am from Philippines, i used to work abroad before and i am now trying to run a small business.  I am inviting you to a partnership and if you are interested, i will send you an email, attaching a business plan for my planned business.

In your case, if you want to stay here for good, you need to have an additional income to augment your pension or your savings. As what you have said, you cannot afford to stay here beyond 3 months. Maybe, we can help each other.

It is a fact that we are strangers to each other, but i believed that it is worth to take the risk.
Sometimes, it is an advantage to have business partnership with strangers who are business minded, than relatives.

My email is: [email protected]. should you be interested, we can meet and talk about it. I cannot promise you instant success, but maybe a year or 2, you can already afford to stay here permanently for good.

Thank you for the time.

This is to  Karen, who gave off a long speech on Filipino culture:

The culture of dependency is unhealthy in whichever culture it is.  Judging by your English and your overall general statements you have made, you are not that educated to understand the world.

(a) "Filipino families are united" - Not really, a lot of disputes, killings, broken families exist in the Philippines, don't cover that reality with artificiality

(b) "If relative has money, others will ask him" - Yeah right, most of us married to Filipinos also have our own parents or siblings, we don't have money to simply throw away at your relatives. I do believe the Filipina should work, and support her elderly parents, that is part and parcel of Asian culture or mindset, but you cannot simply say your cousin or others can simply waltz in and wreck the family finances. Foreigners are not walking ATM

(c) "All cultures and nations are the same" - My goodness, are you ignorant? NO THEY ARE NOT. Afghanistan or Yemen or Pakistan culture is NOT the same as Filipino. Obviously you never been to those nations, in those nations marrying a foreigner itself would get most women the death sentence from their "relatives" in honor killings. You know nothing about "culture", there are some cultures 100 times far worse off than Filipino. Its not about "good or bad" people, in some countries women are totally treated like trash. Go live in an Islamic state then you will get the point. So no, all cultures are NOT the same and all nations are NOT the same. Period.

(d) "If foreigners don't like it they can leave" - We are married to Filipina, not her entire tribe. That is your viewpoint, if that logic was true, then the Filipina is also married to MY TRIBE equally where individual responsibility and hard work is valued. Simple. So in simple words, if you don't like it you are free to go back to Borneo where your ancestors came from.

(e) Many well educated and middle class Filipinos have nuclear families and maintain healthy relationships with extended family, not a close knit communist society, they don't go around pestering other relatives for money. If you want that sort of culture, best is you emigrate to China or North Korea. Don't masquerade "communism" under "culture".

This sort of dependency mindset is what is destroying the Philippines and its next generation. Helping someone for emergency is fine, but when it comes to the point where you treat a foreigner as an "atm " machine, be prepared to give back equally to HIS FAMILY if he needs something from you, otherwise tone it down, sweetie.

Well said Sir!! Now you have to be very careful as you will be traced and threatened to be deported as an "Undesirable" ?? I was a BILLIONAIRE when I came here to spend my pensioned life  and NOW? I am just a MILLIONAIRE !! Which ,  when I tell my fellow Filipinos and TRY to explain it to them, They get all excited having  to fail  to understand ,Say.............
"oh sir, so you are now very rich living here !!!

Hello,

Thank you for your valuable information. I was hoping you could give me some advice.

I currently own a UK registered company that I set up November 2014. I want to move my company to the Philippines. My business is 100% online, the customers buy from my website, then I buy from the suppliers in China and the suppliers ship straight to my customer. The difference between what the customer pays me and what I pay the supplier is my profit.

Being in the UK and importing to the UK means I am liable for 20% VAT (value added tax), I am also looking at employing staff, and as my business is purely online my staff can be anywhere in the world.

How would I go about re-registering my company in the Philippines. I would be looking at leasing an office and employing 2 full time staff. I understand that the easiest route would be to use someone else's office and staff in the the Phil but that would mean that I am still a UK registered company and HMRC (her majesties revenue and customs) would still hound me for the 20% VAT.

What are my option. I don't have a Filipino partner or anything like that. I am British/American dual citizenship.

Hi David,

Some of the information in this blog seems to be very personal and not related to the actual topic.  I guess staying here in the Philippines does that to foreigners.  I often catch myself of doing that....

I do not claim to know everything about it.  Though i have set up several companies myself over the years i am in the Philippines.  They all still exist and have financial statements and tax declarations for all of those.  With other words the formation has to be correct in order to do this.

What i would advise you is to set up a branch office of your UK business.  Declare it as an export branch. 
You can be as only one incorporator and owner set up a branch office.  I have my own documents to prove that since one of my companies is also an export company and branch office of my mother company in HongKong.
The cost of the paid up capital depends a bit on the bank.   SEC ( the government agency dealing with those regulations and registration) requests as foreign promo and attraction 10.000 pesos.  Though some banks want 25.000 pesos to open an account.  But as you know, a few days later that money can be withdrawn as long as you think of the required minimum balance.  Having an account on a company is a legal obligation, and you cannot have ATM on that, only Checks.  Online banking software in the Philippines is very acceptable.

There are always some disadvantages but that is for every set up formula the case.

Like one, It is a bit more expensive in the accounting, since you have to add this company to your UK administration and thus financial statement and you have to comply with tax department here in the Philippines.  But between you and me, those costs are rather minimum.  The income in the Philippines can easily be adjusted to what you think is acceptable.

You need also an export and import license.  And a business permit and .....   documents that have a returning cost once per year and if your business makes profit, are not so high to take.

All together, when you are in the import/export business, it is not so difficult for you to set up a branch office.  And since your original company documents are already all in English, not that expensive.

I can tell you much more about this, or we could meet up if you are in Makati area.  There are a few more possibilities and issues to conquer.


Is it difficult to set up a company in the Philippines ?  NO IT IS NOT !  but you need to see it that you ( and me ) are foreigners and the country is not and should not adjust to us.  we should adjust to them.

Having the set up done by locals makes sense and i can give you the right people to do this for you.  Doing that yourself will make you lose your hair.

Would i rent an office ?  NO ! unless you need people to work with you.  There are plenty of apartments or condo you can rent where you can stay yourself and do your business.  This address can be used without a problem.  Yes only residential area........ but in the Philippines, the problem is that there are many rules, and the good thing in the Philippines is that there are many rules....

offices are in Manila and in particular Makati are very expensive.  Living there even more.  ( just outside Makati is a better option and the price at least 50 % lower)

On a personal note, Philippines is not the best country, and also not the worst, to do business in. Corruption is in all levels present and very active. For most of the levels its the need to compensate the payment of their primary needs.  What is being avoid to do so by the higher levels of the population.     Doing business here and having ONLY foreign customers is the way to go and money can be made.

Let me know if this was of any help

Eric

Dear David,

Since you will be outsourcing your product and your customer is chiefly outside from Philippine territory, you are legally and technically doing an export business. Thus, your business will be exempt from 12% (not 20%) VAT.

You might be right that your income tax might be taxed higher than any domestic corporation if you are still a foreign corporation. You will be taxed at full (30%) without the benefit of deduction. Plus, a tax also will be imposed on every remittance. And if you registered your business here as a domestic corporation, you'll be paying less tax since you can claim valid and substantiated business expenses. HOWEVER, you are entity that is BOI/PEZA registered company, you will enjoy an income tax holiday for 3 to 5 years.

If you are thinking to operate as a sole proprietor, you shall register your business with DTI. And if you intend to put up a corporation, find another four (4) who will sign the documents because Phil. law requires at least 5 persons to form a corporation.

Should need further information, please do not hesitate to shoot me an email.

Cheers,
Professor Cebu

davidlinder wrote:

Hello,

Thank you for your valuable information. I was hoping you could give me some advice.

I currently own a UK registered company that I set up November 2014. I want to move my company to the Philippines. My business is 100% online, the customers buy from my website, then I buy from the suppliers in China and the suppliers ship straight to my customer. The difference between what the customer pays me and what I pay the supplier is my profit.

Being in the UK and importing to the UK means I am liable for 20% VAT (value added tax), I am also looking at employing staff, and as my business is purely online my staff can be anywhere in the world.

How would I go about re-registering my company in the Philippines. I would be looking at leasing an office and employing 2 full time staff. I understand that the easiest route would be to use someone else's office and staff in the the Phil but that would mean that I am still a UK registered company and HMRC (her majesties revenue and customs) would still hound me for the 20% VAT.

What are my option. I don't have a Filipino partner or anything like that. I am British/American dual citizenship.

Dear Friends
This is my first time thinking of investing in the Philippines, I happen to read one of your contributors earlier who happens to know a fair bit of information on investing in Philippines. I will check her post later but this member had very interesting facts about Philippines.

What percentage can a foreigner have of any form of business whether small or multinational chain, and if its true that a Filipino must have 60% and Foreigner 40%. Could you guys let me know a brief info on this matter. Is it worth getting to talk to a Lawyer in Philippines to get some idea of investing in Philippines.

Thank you so much for your information and look forward to receiving feedback from your members here,
Cheers

Not all business shall be at 60:40. Only Nationalized industries as enumerated in Foreign Investment Act that require foreign ownership limitation. Actually, there are businesses that do not require Filipino ownership.

Yes, it would be good if you consult with a lawyer who has exposure in a corporate world.

Hope this helps.

atrabrecha2015 wrote:

Dear Friends
This is my first time thinking of investing in the Philippines, I happen to read one of your contributors earlier who happens to know a fair bit of information on investing in Philippines. I will check her post later but this member had very interesting facts about Philippines.

What percentage can a foreigner have of any form of business whether small or multinational chain, and if its true that a Filipino must have 60% and Foreigner 40%. Could you guys let me know a brief info on this matter. Is it worth getting to talk to a Lawyer in Philippines to get some idea of investing in Philippines.

Thank you so much for your information and look forward to receiving feedback from your members here,
Cheers

Hi John
thank you for your insight into the Filipino culture and I do agree with all that you have shared, many of Foreign people come to Philippines and do not blend with this culture or at least try and understand the very culture that we are investing in.
It makes me sad to hear that Foreign people only come for one thing which is the obvious, but need to learn and understand that you have decided to enter a society that is different from yours and this includes the mentality, culture, customs and traditions in every sense, it is vital for us foreigners to try and blend as much as we can so to respect the customs and culture of this beautiful and gentle people of the Philippines.
Every time I visited the Philippines, people are always smiling and greeting me with open arms, it is such a treat to see this coming from a fast pace, money oriented society such as Australia, life is becoming very expensive here and this is where people cannot cope anymore, it is becoming similar to other rich societies around the world.
Every time I visit this beautiful country I make an extensive effort to taste the cuisine, meet the locals, try and understand their mannerism and personality to the best of my ability.
Regards
john

hi professor cebu
many thanks for early response, I certainly appreciate your comments and make an effort to follow up with a lawyer who is familiar with international businesses specially Philippines.
cheers

Hi Cynthia
many thanks for the info, I have only joined this blog in last few days and already have a lot of info to take on board, so thank you once again and hope to hear more from you. I am very much interested to do business in Philippines as I respect the culture very much.
cheers

im looking to move to cebu next years coming there for hoilday in november for 3 months looking to start a small business eems very confusing

there are many business in philippines.
coconut trees orchard on lease.start with little capital,2000$, when familier in business then enhanced it. coconut oil supply in market.
if big capital u supply palm oil in international market.
rice business
if u hv resident visa, buy homes on ur own name and then give on rent, 450000/- pesos house price, rent 3000/- pesos.
car parts business.motor cycle parts business used and new brand.
pork farm is good business but need big capital. you are foreigner be care not spend much capital.i advise you only start business with   little capital.not more than 4000 us$.

thank you for that imfo is it hard to buy land to grow cocconut and rice or can you but straight as on going concern

hawk911
i come philippines 5 months ago.i have already apply 13.a visa.For 13 a visa your business and land is in your wife,s name. Now you  are nothing.
Now it should be 10,000us$ in your bank account, marriage contract,birth certificate,police clearence certificate with visa fee,visa form both applicant and spous signature. apply in manila head office immigration office. process visa is about 40 days.
,

hi Laura
thank you for your info on foreign ownership, I did read somewhere here that some businesses can be foreign owned 100% and some in part omwerships, filipino and foreign. but thank you for your input, cheers
john

hi All
just a quick point I read once on this blog about bank account in philippines, I normally take local Australian cash with me every time I visit the philippines, I read here somewhere that it is good to open a BPI bank account and then I can deposit some funds so I can start not only use for a busniess but use it for my every day use.
Can someone here let me know if I can organise a Bank Account remotely as I am in Australia at the moment, or do you have to be physically be in Philippines to open an Account.

Thank you
john

you have to be here physically. unless you assign a person empowered with spa.

atrabrecha2015 wrote:

hi All
just a quick point I read once on this blog about bank account in philippines, I normally take local Australian cash with me every time I visit the philippines, I read here somewhere that it is good to open a BPI bank account and then I can deposit some funds so I can start not only use for a busniess but use it for my every day use.
Can someone here let me know if I can organise a Bank Account remotely as I am in Australia at the moment, or do you have to be physically be in Philippines to open an Account.

Thank you
john

I just read all the previous posts. It sounds like the best thing to do is to actually talk to a lawyer in the Philippines. But before I do that I figured I'd ask here.

From the other posts, it sounds like the 60/40 ownership requirement and various capital requirements do not always need to be met, depending on the type of business. Can anyone give me an idea of the legal/financial requirements for the following?

Basically a business that produces/manufactures a product in the Philippines and sells it online to both domestic and international customers. Just as an example let's say the product is bowls. So if i wanted to pay people in the Philippines to make these bowls and then I sell them to various consumers via a website, what are some of my options? Restrictions? Would it be best to operate as a company based in the Philippines or as basically an operation of a US-owned company? How much startup cash do I need to invest (outside of production costs)?

Thanks for the help.

you should marry a filipina only then you can have bussiness in the philippines..if its big company and you are not married to a filipina..then the foreign policy applies like 40-60 ownership...or...name it to a a filipino you trust...thats it...

I've been reading, and researching about investing in Philippines.
Trying to understand the in's and out's of it.

I know there are many expats running bnb's, hotels and tourist business'.

I have a partner (not Filipina), and we would like to buy or build a small bnb/ surf camp in Siargao.

Anyone with advice on how we can go about this.???

Thanks for response, professor Cebu.
How do I get in contact with you?

You can try a network marketing business

Hi All,
I am interested in this post as I am moving to the Philippines with my fiance of 5 years. I am looking at opening a small musical instrument repair shop. Or the company I work for in Singapore might be interested in opening a branch in  the Philippines. Either way I will need an employment pass of some kind can anyone advise how best to do this

Cheers

Dave

im a Pinay , got a good job here as a government employee...have a Canadian fiance who plans to put up business here. He is currently residing in Phuket where i met him few months ago...he is broke so im helping him meet people here and finding investors for his inventions. There are still honest Pinays  who,love men without money...im helping him out so he get out from the rut...


Mhel

Yes it is allowed, But you need to have someone to trust.

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