If you have plans or dreams of starting your own company in the Philippines, here are some things to help prepare you for the journey.
1. Know your company. What kind of products or services will your company produce? Will you be having local or international clients, and what would be the percentage of each? Do you have a foreign company and are looking at creating a branch or subsidiary in the Philippines? Do you have a name in mind? What type of ownership – individual, partnership, corporate? These questions (and more) will help determine what kind of paperwork and registrations you must fulfill. As you prepare your business plan, having a clear idea of how you want it set up will help you establish it correctly and properly, avoiding unnecessary headaches.
2. Spend time in the Philippines. Figure out where you plan to set up your business, who will be the directors (you need five if you’re setting up a company), who will run your business while you are away, and your general system of organization. This is best done while you are in the country. Be prepared to spend some time setting up; better to take time and plan it out, rather than feel rushed and hurried.
3. Select a reliable bank. Having a good relationship with a bank is a good idea. Making sure it has either an international presence or a good partnership with an international bank can help with finances as you build your company. You will also need a bank at the start to deposit paid-up capital and obtain a certificate of deposit for registration of your business.
4. Be ready to visit local government offices. A barangay clearance, business permit, tax certificate, etc. are all documents you will need and, therefore, you will need to visit the local government offices where your business will be located. Expect to wait as you apply for each document. Get as much information prior to the visit to make sure you have everything you need. Or, you can do #5.
5. Hire a good lawyer. While setting up a company in the Philippines has been made easier by information on the web from the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue (BIR), having a corporate attorney who can get the groundwork all done for you for a reasonable fee makes things far more simple. It avoids having to go through lines and going through the pain of realizing there are missing items, or mistakes in application.
6. Hire a good accountant. Once you have your business registered, the necessary clearances and permits obtained, you will need to get your Tax Identification Number and a Certificate of Registration. Your accountant can handle all the necessary paperwork to get that as well as preparing all the documentation for invoicing and receipts, book of accounts, VAT registrations, etc. Make sure your accountant is reliable and trustworthy; you will be depending on her to calculate correctly and pay your required taxes.
7. Register for Employee Benefits. If you plan to have employees, it is best to register with the Social Security System (SSS) which automatically registers you with Philippine Health Insurance Company (PhilHealth). It would be good to be familiar with industry standards to make sure you are competitive and provide what is best for your employees. A successful business, after all, depends on happy employees.
8. Get to know other business owners. Find associations, groups or friends who are fellow business owners and meet with them regularly. They can provide you with tips, information and advice as you build your business. You might even need them to vent on occasion, and they will absolutely understand. Having this network will give you a finger on the pulse of the work environment in the Philippines that you would need if you’re far away, as well as service providers they use and trust that you can rely on.
9. Have a trustworthy and reliable representative. Aside from the personnel you hire, you will want to have someone you know and trust to either manage or keep an eye on your business as you start. Having someone with your interest at heart is best, to make sure your business runs well even when you’re not there.
10. Nothing is as you expect. The infrastructure of the Philippines is still developing and requires patience from the would-be entrepreneur. What you think is a simple transaction could end up to be a two-week application period with a waiting period added. That said, there is always a way to figure things out, and knowing who to talk to and where to go for answers will save you time, energy and frustration.
Starting a business in the Philippines can require a bit more legwork and patience, but the rewards are also quite fulfilling.