Start a Business in the Philippines. Now there’s a thought. Can a foreigner start a business in the Philippines as a way to make a living, instead of searching, searching, searching for that seemingly impossible task of finding a job for a foreigner in the Philippines? (You might also like There’s a Philippine Pony In There Somewhere — Find a Hungry Crowd)
Start a Business in the Philippines — Possible?
Is it even possible for a foreigner to own a business in the Philippines? The answer is an unequivocal yes, no or maybe. Much depends upon the size and structure of the business you’re considering.
Start a Business in the Philippines — Corporations
If you are setting up a corporation, you will have to register your corporate papers with the Securities and Exchange Commission. If you are a foreigner, you will only be allowed to own 40% of the corporation. The rest (60%) will have to be owned by Filipino Citizens. Also, don’t forget, whether a small business or large, you are going to have business clearance and registration requirements at the provincial, municipal and barangay level. Don’t skip any steps.
Start a Business in the Philippines — Sole Proprietor
If your business is a single proprietorship, you may register it with the Department of Trade (DTI). hen you will be required to register your business with the Bureau of Internal Revenue and finally to the local government (City of Municipality) where your business is located. After undergoing this process and obtaining the necessary registration papers from these agencies, you are now ready to operate your business.
Start a Business in the Philippines — Best Locations
There are various locations that offer incentives to investors.
Some investors find it convenient to set up their business in Freeport zones that are found in key a cities and industrial areas in the country.
Among the known Freeport zones are Subic Bay Freeport Zone located in the former US Naval Base in Subic Bay, Zambales. Subic has a top-notch Seaport facility that can accommodate large ocean vessels from all over the world.
The other major Freeport zone is the Clark Freeport Zone located in Angeles, Pampanga. It has almost the same facilities as that of Subic except that it has no Seaport. But it is home to international airport which is being actively expanded to become Manila’s main air hub in the future.
Aside from these two Freeport Zones, there are a good number of economic zones that have complete facilities for commercial and industrial operations. These economic zones offer various tax and business incentives to foreign investors, including duty-free importation of capital equipment.
Start a Business in the Philippines — Philly’s Thoughts
Let me start by saying I am not a world-class businessman, but I do have more experienced than the average guy who has just been a wage earner all his life.
Whenever I get a question from someone about starting a business here in the Philippines, no matter if they are Filipino of expat, and no matter what type business they are asking about, I always ask one simple question first:
What business experience do you currently have?
The answer I get, almost invariably is, “None, but I really want to live there in the Philippines”.
Well far be it from me to try, but my thought is you are crazy to start a business in the Philippines, with no prior experience.
Fully 3 out of ten new businesses fail in the first year in the USA. Only about half make it through their first 5 years. These are somewhat daunting odds, but I think the rate of foreigner-owned business, by taw neophytes would be much, much worse.
By all means, if you think that starting a business to insure your income for the rest of your life, I recommend you start a business in the US first. If you make it two or three years and are making a decent living, then you have a much better chance of succeeding.
“But I can’t operate a US-based business from the Philippines”, you say.
I say in many cases you can. I have written a number of articles on this and I will write more if anyone really wants to explore further.
Or open a branch/subsidiary in the Philippines. That’s another possibility.
Best of all, in my point of view, is to start your completely online business, while you are still employed (or right away, if you are forced into unemployment benefits), and one you are making enough profit to be comfortable, pull the plug from your ‘dirt-based” J*O*B and live where you want to.
I don’t, in most cases, start a blog, either. This blog makes me money but
A, I could hardly live on what it makes.
B. I’d hate to be forced into doing this as some sort of analog of a 9 to 5 job.
There are much, much more profitable ways to legally, morally and highly honorably ways of making a living on-line. (Warning, affiliate advertisement)
Again, we can explore this in more detail if you want to … meanwhile use my search box in the sidebar for the articles I have already written.
What i would avoid, at all costs, if you decide to tart a business in the Philippines anyway are these common dreams (that often become nightmares:
Internet Cafe: Horrible profit margins. Ever-rising utility costs, ever devastating price gouging competition, and today many cell phones are not only on the ‘net, but have more power than a desktop computer of a few years ago.
Restaurant: Possible to eke out a living here, but very tough competition. And whenever you open something which starts to be successful, you’ll find half a dozen direct competitor “copy cats” opening up, often next door … and very few Americans or other foreigners are going to be able to “out cheap the Filipino”.
Bar/Night Club: Totally dangerous in my view. In my 10 years of direct experience with others living in the Philippines and my own experience, I know of about a dozen foreigners who have been murdered. EVERY single one of them was involved in the bar or restaurant business in one way or another. I wouldn’t go near the bar/night club/sex trade business (and the three are not separable) if someone paid me to go into the business. Dangerous.
Jeepney or Taxi: Many people seem to think that one can just buy a jeepney and start hauling passengers. It doesn’t work that way. Again, remember this is not the USA. The PUJ/PUV public transpo business is very tightly controlled by independent owner/operator associations. In most cases, these are very closed groups and even if you can buy a membership, you are always going to be at a disadvantage as a foreigner.
Also, most public transpo has to have government approved franchises that specify exactly what routes they can ply, and you don’t just apply for such a franchise. It’s like getting a liquor license in the USA. You may have to wait years until an existing owner is ready to sell his/her franchise, and then you will pay the price you are asked to pay.
Forget about free enterprise, it often does not exist here in the Philippines.
So there’s a little random thinking and information. Do you want to Start a Business in the Philippines?