Doing Business

DOING BUSINESS IN THE PHILIPPINES IN 2022

Trường Lăng

December 28, 2022

Doing Business

DOING BUSINESS IN THE PHILIPPINES IN 2022

Trường Lăng

December 28, 2022

Viettonkin Consulting has helped its clients register their businesses in the Philippines for years. Our offerings consist of i) services for company formation in the Philippines; ii) registration for a government license; iii) establishing corporate bank accounts at local or foreign banks; iv) hiring new personnel; v) work permit, visa and immigration related services and vi) provision of office lease and/or office supplies and equipment.

Philippines business structure overview

  • The Philippines has the fifth-largest GDP in ASEAN. For clients seeking to expand their market reach throughout the country and the larger ASEAN area, incorporation of a Philippines firm is advised;
  • For foreign investors looking to start a business in the Philippines, a joint-stock corporation is a popular choice. A foreign firm no longer needs to appoint a board of directors as of 2019;
  • Since 2019, a Philippines One Person Corporation (OPC) with just one shareholder—who may be a foreigner—can be registered;
  • There are further business entities in the Philippines;
  • Although it can go up to US$2.5 million for some industries and activities, the minimum paid-up capital for a foreign business in the Philippines is $200,000. Therefore, opening a corporate bank account in the Philippines is required before registering a company.
  • Since English is the official business language in the Philippines, finding English-speaking employees is simple. The Philippines has one of the lowest average salaries in ASEAN at $3,294 USD. Our company can help our clients find local employees in the Philippines.

Benefits of Philippines company registration

  • Without entering the nation, foreigners can register a company in the Philippines;
  • The Philippines is a prospective frontier market for international business people due to:
  • In 2022, the Philippines’ economy is anticipated to develop at the quickest rate in South East Asia. For business owners establishing Philippine enterprises, this will translate into a variety of prospective investment options.
  • With several rating upgrades since 2015, rating agencies like Moody’s Investor Service, Fitch, and Standard & Poors currently consider the Philippines favorably for investment;
  • The Philippines has a thriving startup culture that is backed by laws like the Innovative Startup Act and the Philippines Innovation Act, both of which were signed into law in 2019;
  • For business people looking to invest in the Philippines, the Philippine Economic Zone Authority (PEZA) provides a variety of online services.
  • The Philippines is a fantastic location to establish an export-focused service business because
  • Infrastructure, utilities, and office space are inexpensive. Additionally, the average incomes in the Philippines are among the lowest in all of ASEAN. Filipinos with English proficiency can generally be hired by foreign companies for less than $5,000 annually;
  • Due to the vibrant expat population, high quality of life rankings, and lack of significant recruitment barriers, a local company can attract foreign talent;
  • The Philippine government provides tax breaks and additional assistance for foreign investment projects, such as i) breaks for corporate taxes and ii) customs taxes on imported machinery and raw materials, which have been decreased or waived. Projects that qualify include i) centers for medical travel; ii) projects in hospitality for the elderly tourism sector and iii) IT companies;
  • The information and communications technology (ICT) service industry in the Philippines is developing quickly. In addition to serving as a desirable base for the IT and Global In-House Center (GIC) services sectors, the nation is a recognized global Business Process Outsourcing (BPO) powerhouse. The following should be noted:
  • With a large pool of tertiary graduates, particularly in fields like finance, accounting, and business IT, the Philippines is ranked ninth internationally as a BPO destination;
  • Numerous call centers and BPO firms are housed in the Philippines Cyber Services Corridor (PCC), which is supported by a high-bandwidth fiber backbone and digital network.
  • A number of market access benefits are available when registering a business in the Philippines because the country is a signatory to the ASEAN Trade in Goods Agreement (ATIGA). These consist of:
  • Closer linkages in the economy between the Philippines and other ASEAN nations to allow for economies of scale for Philippine businesses;
  • A bigger market that Filipino businesses can tap into;
  • Lowering some tariffs and trade restrictions.
  • It is simple to register a company in the Philippines because
  • A single shareholder and director, who may be a foreign national residing outside the Philippines, may register a corporation in the Philippines;
  • Because registration processes are digitized, the majority of applications for company registration in the Philippines are processed in about three weeks. Regrettably, tax registration, which might take up to six weeks, is not yet subject to this.

Problems with Philippine company registration

  • Unless the company hires more than 50 employees, in which case the paid-up capital minimum is US$100,000, a foreign-invested company in the Philippines must have US$200,000 in paid-up capital. However, sectors that are restricted from receiving foreign investment include i) retail; ii) agriculture, and iii) advertising requires up to US$2.5 million in paid-up capital;
  • A limited liability firm is not permitted by Philippine law. If they want to open a business in the Philippines, foreigners must: i) register a branch in the Philippines, which gives the foreign company unlimited liability for activities there; ii) Philippine One Person Corporation or Joint Stock Corporation;
  • A limited liability firm is not permitted by Philippine law. If they want to open a business in the Philippines, foreigners must: i) register a branch in the Philippines, which gives the foreign company unlimited liability for activities there; ii) a One Person Corporation in the Philippines or iii) a corporation with joint-stock;
  • Our clients must open a temporary bank account before a joint-stock company may be registered. For the purpose of opening an account, some local banks demand that a foreign bank signatory get a visa and present the Alien Certificate of Incorporation;
  • Philippine company formation takes time as licenses must be approved by numerous government agencies as well as the municipality where the business will be located;
  • There is a lot of restrictions

The Philippines publishes a list of industries that demand 100% Filipino ownership;

  • Property registration is costly and takes longer than a month to complete.
  • The Philippines does poorly in terms of investor protection and the ease of acquiring financing;
  • The Philippines is only listed by the World Bank as one of the top 95 countries in the world to launch a business because of the aforementioned reasons.
  • Additionally difficult reasons to conduct business in the Philippines are:
  • The per capita income in the Philippines is just over US$3,000 per year. 25% of people are considered to be below the poverty level;
  • Infrastructure for inter-island travel must be updated to support domestic commerce and the movement of people and goods;
  • Mindanao’s southernmost island is still susceptible to political violence and terrorism.
  • The appointment of a resident treasurer is necessary for Philippine business registration. In addition to reviewing and ensuring the accuracy of the Philippines firm’s financial statements, the treasurer’s duties are similar to those of a company secretary. Our clients will receive resident treasurer services from Viettonkin Consulting.
  • All local businesses in the Philippines are required to submit numerous accounting and tax-related returns, including:
  • Within 60 days of the conclusion of each quarter, the quarterly provisional corporate income tax return (1702Q);
  • 20 days after the end of each month, a monthly VAT return (2550M) is required;
  • 25 days after the end of each quarter, a quarterly VAT return (2250Q) is due;
  • 10 days after the end of each month, withholding tax returns (1601C and 0619E) are due.
  • Within 30 days at the end of each quarter, you must submit the quarterly enhanced withholding tax return (1601EQ).

The preparation and submission of these returns will be finished by Viettonkin Consulting PLC. To discover our price for these services, visit this page.

  • A single shareholder and director are permitted for a Philippine corporation, but this individual must be an individual. There must b e a minimum of two shareholders for entities with corporate shareholder(s).
  • Best applications for a firm based in the Philippines
  • Tell us what you’re looking for, and we’ll send you a tailored proposal within 5 hours!
  • Philippines-related links

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