Opening internet cafe and karaoke bar in the Philippines.
Starting a business in the Philippines if you are a foreigner is a head-scratch inducing and quite a frustrating venture. Make sure you do a thorough research on the business you want to open and the laws to start a business in the Philippines. It always pays to be wise about your investments.
The first step to opening up a business is doing your due diligence. First is to put the business in a local’s name. The second is to incorporate. Either way you will have to have at least 90% of the employees being Filipino. To be incorporated you will need to have all the officers of the company excluding you to be Filipino. The pitfalls of these businesses is that if you are not the legally named owner it can easily be taken away from you by the officers of the corporation or by the named owner of the business. The way secure that your investment is safe is to have only you as an authorized person to withdraw funds from your banking account. Make sure that all of the equipment you purchase is in your name only and lease it out to the business. (White)
Incorporating a business in the Philippines requires getting Brgy. clearances, securing DTI or SEC papers, a business permit from the city hall, BIR permit, and choosing your business location (all this of course takes anywhere from a few days to a couple of weeks).
The current Philippine president encouraged the streamlining of obtaining business licenses. When President Benigno Aquino gave his first State of the Nation Address last July 2010, he stressed the importance of streamlining our country’s business processes. Ang sabi ng ating Pangulo: “Una sa ating plataporma ang paglikha ng mga trabaho, at nanggagaling ang trabaho sa paglago ng industriya. Lalago lamang ang industriya kung gagawin nating mas malinis, mas mabilis, at mas maginhawa ang proseso para sa mga gustong magnegosyo.” (Ceazar) Translated: Our first platform is to create jobs, and the resultant growth of industry employment. The industry will grow only if we make cleaner, faster, and more convenient process for those willing to do business.
Below is from Dayanan Business Consultancy. It is a step by step process on how to legally Register and Operate a Philippines Corporation (Dayanan):
The Securities and Exchange Commission (SEC) is the Philippines Government Agency which oversees corporations
1 – Reservation of corporate name with the Securities and Exchange Commission
2 – Preparation of Corporate Articles of Incorporation and Bylaws.
3 – Treasurer’s Affidavit
4 – Treasurer in Trust deposits the paid-in capital into a Trust account with a Bank. The bank issues a certificate of deposit.
5 – Companies with more than 40% Foreign Ownership must also submit SEC Form F-100.
6 – Submission of all the above documents to SEC for Registration
It will take 2 – 3 weeks for the SEC to return the approved Articles of Incorporation, Bylaws and Certificate of Incorporation.
Once the Certificate of Incorporation has been issued it’s time to start applying for the Municipal Business Permits.
DBC with the assistance of its legal team will prepare the Articles of Incorporation and Bylaws of your corporation based on the requirements of your business. Take note there exist restrictions on foreign ownership which may affect how many shares you may own and the minimum paid-in capital. Business Process Outsourcing is considered an export enterprise which may be 100% foreign owned and may avail of tax incentives
Certain kinds of business need additional endorsements and licenses from Philippines government agencies.
Government licensing bureaus
- Bureau of Food and Drugs
- Bureau of Customs
- Department of Labor and Employment
- Department of Environment and Natural Resources
References:
Ceazar. Rationalizing the Business Process in the Philippines. Papel at Lapis ni Ceazar. Retrieved 16 May, 2011 from http://papelatlapis.wordpress.com/2011/01/19/rationalizing-the-business-process-in-the-philippines/
Dayanan Business Consultancy. How to Incorporate in the Philippines (Subsidiary- Domestic Corporation). Retrieved 16 May, 2011 from http://www.philippinesincorporation.com/incorporate-philippines-subsidiary-domestic-corporation/
White, CW. How to Own a Business in the Philippines. eHowMoney.com retrieved 16 May, 2011 from http://www.ehow.com/how_5174935_own-business-philippines.html
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