The Philippines has lagged behind its neighbors in terms of development, growth, and public works over the past few decades, but the economy has picked up in recent years following reforms by the current government and efforts to weed out systemic corruption and cut red tape. The stock market has been consistently hitting new highs over the past two years, while the economy grew by 6.6% in 2012, and is forecasted to maintain high growth this year.
The Philippines has a sizeable, well-educated English-speaking workforce, with around 8 million college graduates and 16 million high school finishers. This has enabled the country to become extremely competitive in the Business Process Outsourcing sector.
As an ASEAN (Association of Southeast Asian Nations) member, the Philippines has a variety of preferential trade deals with other countries across the region. Businesspeople who wish to trade throughout the region can benefit from greater access and lower costs resulting from these agreements.
New companies registered with the Philippine Board of Investment (BOI) can take advantage of income tax holidays for up to 6 years after incorporation, and for additional period if the company undertakes expansion projects.
The BOI also designates some sectors as "pioneer" areas. Firms which operate in these sectors can avail of income tax holiday extensions if they use a large proportion of indigenous raw materials in their manufacturing, have a relatively low capital-to-labor ratio, or have at least US$500,000 of foreign exchange savings annually during the first 3 years of operation.
The Philippine economy is an open economy, and allows 100% foreign equity for businesses in most sectors, except for some in the Foreign Investment Negative List (FINL) where only 40% ownership is allowed.
The Philippines recently received its first ever investment grade rating from Fitch Ratings. Fitch cited the country’s strong sovereign external balance sheet compared to it’s ‘A’ range peers, as well as strong and less-volatile growth over the past 5 years.
Netherlands company registration gives access one of the world's most extensive double tax treaty networks, allowing a company to minimise withholding tax on incoming dividends.
In most cases, dealing with government agencies will mean having to face extensive red tape. Entrepreneurs in particular may find difficulty navigating the different processes and procedures required for business registration, licensing, and renewal.
Although the government has been making efforts to curb corruption, it still suffers from systematic corruption in a number of institutions. As such, in the 2012 Corruption Perception Index by Transparency International, the Philippines ranked just 105th out of 176 countries, although it had improved greatly from previous years.
In the World Economic Forum's Global Competitiveness Report for 2012-2013, the Philippines ranked just 65th, and it placed 136th on the 2012 Doing Business Survey conducted by the World Bank. The latter survey takes into account some factors such as business start up procedures, time, cost and minimum capital required to start a business.
Minimum capital requirements for some company types and sectors can be as high as US$200,000.
Healy Consultants efficiently and effectively manages our Clients engagement, providing detailed email status updates every second day:
Our client settles our fees and signs Healy Consultants' engagement letter, prior to company set up. Healy Consultants provides our client with a detailed engagement plan, outlining a roadmap for Philippines company registration, thus minimizing unwanted surprises and meeting client expectations.
Healy Consultants collects the required due diligence from our client, including passport copies, proof of address, and details of the company's intended activities.
Our client and Healy Consultants agree the legal, tax and accounting implications of Philippines company registration. Our client and Healy Consultants also agree the company name and the optimum corporate structure, including shareholders and directors.
Our client and Healy Consultants also agree the company name and the optimum corporate structure, including shareholders and directors. Healy Consultants' incorporation team performs a company name search with the Securities and Exchange Commission (SEC) and, if approved, begin Philippines company set up.
Healy Consultants' incorporation team applies for the Community Tax Certificate (CTC) a prerequisite to obtain the Barangay (district) clearance. Once the CTC is obtained, Healy Consultants' incorporation team applies for a Barangay (district) clearance. Using this document a license or permit for the company may be obtained.
Healy Consultants' staff emails the following corporate documents to our client for his signature and return to us:
Consent to act as director and shareholder
The Memorandum of Association
The Articles of Association
Healy Consultants' Philippines company set up team liaises with the Philippines Securities and Exchange Commission and completes registration of your Philippines company by submitting the signed documents and paying the statutory Philippines company registration fees.
Healy Consultants' incorporation team receives an email of the Certificate of Registration from the Board of Investments. Our team immediately emails the same to you. Healy Consultants will also obtain the mayor’s permit/municipal license to operate, at the Licensing Section of the Mayor's Office.
Healy Consultants incorporation team applies for Tax Identification Number (TIN). During the registration process, we indicate in the application the types of taxes we expect to be liable for, including VAT. Healy Consultants compliance team prepares all post Philippines company set up documents, including minutes of the first meeting, preparation of By Laws, assurance of initial share certificates.
Following Philippines company registration, Healy Consultants provides our client with a complete company kit including i) original Certificate of Incorporation ii) a bound copy of the Philippines government approved Articles of Association iii) original share certificates iv) an original Philippines government receipt as evidence of payment of annual Philippines company registration and license fees.
To support Philippines company set up, Healy Consultants' Banking Team completes corporate bank account opening for our client. The account includes world-class multi-currency Internet banking facilities and our client is not required to visit the Philippines to complete this task. Healy Consultants works with internationally recognized banks such as HSBC, Standard Chartered and Citibank to provide corporate bank account services.
Following Philippines company set up, Healy Consultants assists our client with business website building, search engine advertising, as well as stationery and logo design.
Healy Consultants provides our client with a local business address in Philippines for invoicing purposes, together with telephone, fax and email support. If required, Healy Consultants assists our client to locate business premises in Philippines and recruit local staff to support Philippines company set up.
Healy Consultants will assist our Client in selecting and setting up the optimum Philippines corporate structure:
A sole proprietorship is owned by a single individual who was full control over the company and owns all its assets. This individual also carries complete liability for the firm, but enjoys full profits and conversely, suffers all losses. A sole proprietorship must apply for a business name and be registered with the DTI-National Capital Region (NCR), or with regional DTI offices.
A partnership is a firm which two or more proprietors, where the firm is treated as a separate legal entity from its owners. There are two types of partnerships: a general partnership, where the partners have unlimited liability for debts and obligations of the firm, or a limited partnership, where only one or more general partners have unlimited liability while the general partners are liable only up to their capital contributions. Partnerships with more than PHP3,000 (around $73.00) in capital must be registered with the Securities and Exchange Commission (SEC).
Established under the Corporation Code and regulated by the SEC, the corporation is a legal entity separate from that of its shareholders, with shareholder liability limited to the amount of their share capital. It must be composed by at least 5 to 15 incorporators, and have a minimum paid-up capital of at least PHP5,000. There are two corporation types in the Philippines:
Stock Corporation: This type of corporation has its capital stock divided into shares, and it is authorized to distribute profits or dividends to stockholders based on the number of shares held.
Non-stock corporation: This kind of corporation is organized primarily for public purposes such as charity, education, or culture. Members of this corporation are not issued shares.
A corporation can either be Filipino owned or foreign owned: if it Is 60% Filipino- and 40% foreign-owned, it is considered a Filipino company, whereas if is more than 40% foreign-owned, it is considered a domestic foreign-owned corporation.
Business persons who wish to travel to the Philippines are not usually required to apply for a Visa beforehand (with the exception of citizens from selected countries). Upon arrival, visitors are given a 21-day visa, with the option to extend up to 60 days.
Examples of Philippine visas available to international entrepreneurs and business people include:
Business Visa – For citizens of countries which require visas to enter the Philippines, or individuals who wish to stay in for an extended period, it is possible to apply for a business visa. This visa can be given on a single- or multiple-entry basis and with a validity of 6 months or 1 year. This visa is subject to all requirements of a normal visa, though a company letter of sponsorship is also needed.
Employment visas are also available for foreigners who are seeking to engage in lawful occupation in the Philippines. Foreigners may enter the Philippines under temporary visitor visas and file for a Pre-Arranged Employee Visa. The applicant may be required to attend a hearing (interview) before the visa can be issued.
To support the visa application, Healy Consultants prepares a comprehensive business plan detailing our client's proposed business activities in the Philippines, as well as market analysis and financial projections.
Healy Consultants offers personalized orientation programs for international entrepreneurs planning to work in the Philippines. Typical programs include introductions to banks to open personal bank accounts, visits to key points of business interest in the neighboring countries, as well as tours of commercial and residential property international schools, social clubs and recreational facilities. In summary, Healy Consultants offers a one-stop service for moving to the Philippines.
The average fee per Philippine business engagement amounts to USD11,900, which includes company incorporation, company secretary fee, corporate bank account opening and VAT registration. Refer to draft invoice embedded in the icon below:
The average Philippine engagement period is 16 weeks as outline below.
To receive the best Internet banking and customer service, Healy Consultants recommends international banks HSBC, Standard Chartered and Citibank for most corporate bank account solutions. Local banks can be used where appropriate for the Philippine business.
Healy Consultants Compliance Team can open an international corporate bank account within 3-4 weeks from the date your Philippine Company is registered. There is a 50% probability our Client will not need to travel to meet the Philippine Bank. Following bank account approval, the preferred Singapore bank will directly and independently email our Clients the corporate bank account number.
Philippine banks can provide financing to Philippine registered companies provided the following conditions are met i) good Business-plan ii) availability of security iii) experience of business owners iii) last 3 years audited financial statements iv) realistic feasibility study v) project strength and weaknesses analysis (SWOT).
To support their new business in the Philippines, Healy Consultants assist clients with Trade finance tasks including i) bank guarantees ii) letters of credit iii) finance against trust receipt iv) document against payment and against acceptance.
Securing corporate finance in the form of a loan, overdraft or simply preferential credit terms are other corporate banking related aspects of doing business in the Philippines.
Philippine banks offer the highest levels of corporate bank account facilities including multiple currencies, internet banking, telephone banking, checking accounts, savings accounts, debit and credit cards, fixed term deposits and wealth management services.
A non-resident foreigner who has stayed in the Philippines for more than an aggregate period of 180 days in a year and engages in trade or business in the country is subject to a tax rate of 20%. This rate will differ if the Philippines has a tax treaty with the country from which the foreign individual or corporation is a resident of.
Foreign corporations who are not doing business in the Philippines are subject to a 30% withholding tax on income if the said income is derived from a source within the Philippines. Again, the tax rate can vary if a tax treaty exists between the Philippines and the foreign company's home country.
Foreign employees, whether resident or non-resident, are required to pay taxes on income sourced from the Philippines. They are also required to file their income tax returns (ITRs) annually in April. Rates are progressive, from 5% to 32% of taxable income. Non-residents who are not engaged in any kind of trade or business in the Philippines are taxed 25% of gross income.
Accounting and taxation services including i) corporate structuring, ii) minimizing withholding tax, iii) tax returns and financial statements, iv) payroll and investments to support Philippine incorporation.
Healy Consultants Virtual Office services including i) providing office space in the Philippines or internationally to clients ii) a business address in th Philippines, or internationally, for invoicing purposes iii) phone, fax and email support and iv) global call centre support to accompany Philippine incorporation.
Healy Consultants assists our clients to obtain corporate finance, trade finance and establishing merchant accounts to support Philippine incorporation.
Human resource support including i) staff recruitment and employment and residence visas ii) payroll support and iii) local business address in the Philippines for invoicing purposes, together with telephone, fax and email support to accompany Philippine incorporation.
Healy Consultants Marketing services including i) business website building ii) search engine advertising iii) designing stationery and logos iv) market research v) media advertising to support Philippine incorporation.
Healy Consultants IT Support services including i) hardware purchasing and configuration ii) office network configuration iii) business website design and maintenance iv) server maintenance to support Philippine incorporation.
Healy Consultants Consulting Services including i) merger and acquisition advisory ii) business due diligence iii) internal audit support iv) business process re-engineering to support Philippine Incorporation.
The Philippines is an archipelago of 7,107 islands, making it the country with the 5th most number of islands. It also has the 4th longest coastline, despite being just the 73rd largest country in terms of land area.
The Philippines is named after King Philip II of Spain, under whom the islands were settled.
Two periods of colonization characterize the Philippines: first by Spain from 1565 to 1898, followed by the Americans from 1898 to 1946. The British also occupied the capital, Manila, for more than two years in the 18th century.
The Philippines was Asia’s first democratic nation, with a democratic constitution being installed upon its independence from Spain in 1898.
The Philippines is considered to be the center of the world’s marine biodiversity, with thousands of underwater species unique to the country's waters. It is also part of the Coral Triangle, an area rich in marine life spanning the Malay Archipelago.
The Philippines is unique among countries in Asia in that its main religion is Roman Catholicism, which was introduced by the Spanish early in their conquest. 80% of the country's population of over 100 million is Catholic.
The University of Santo Tomas is Asia’s oldest university. It was established in 1611 and is 25 years older than Harvard University.
The Philippines is the third-largest English-speaking country in the world, after the United States and the UK. This has allowed it to become a hub for call centers and business process outsourcing.
The Christmas season in the Philippines is particularly long – you can hear carols and Christmas jingles being played in establishments across the country as early as September, and as late as January.
The Philippine Eagle is the largest eagle in existence, with a wingspan of over 7 feet and weighing up to 10 lbs. On the other hand, the Philippines is also home to the world's smallest primate, the tarsier, which can fit in the palm of your hand.
Year 1 incorporation
US$3,100 per Director per annum*
US$1,800 per Shareholder per annum**
* Depending on corporate structure and professional services required by our clients.
** Excludes US$3,450 refundable deposit.