Foreign investors who choose Philippines company formation can take advantage of tax holidays of between two and 6 years upon registration. Companies operating in special economic zones pay a corporate tax rate of just 5% on gross income.

A business can be 100% foreign-owned if it is located in an Export Processing Zone or Special Economic Zone and up to 100% foreign ownership of domestic market enterprises is allowed except for specific areas listed under the Foreign Investments Negative List.

A range of investment incentives are available to support Philippines company formation. For example, the Board of Investment (BOI) offers grants to foreign investors who invest in a 'pioneer' industry, as defined by the government. A full list of pioneer industries is identified in the Philippines Investment Priorities Plan (IPP).

The Philippines is a member of the Association of Southeast Asian Nations (ASEAN). Entrepreneurs who choose Philippines company formation therefore gain access to key markets in ASEAN member states via preferential trade deals.

Philippines company formation and corporate bank account opening is complex and time consuming due to bureaucracy in the country. On average, client engagements last for eight weeks. The Philippines is negatively ranked as the 139th least corrupt country in the 2009 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians.

Philippines company formation requires a minimum of 5 shareholders and 5 directors. The majority shareholding must be Filipino, unless 100% foreign ownership is granted.

Companies outside the special economic zones are subject to a corporate tax of 32%.

A statutory audit is required for all foreign corporations and branches. An annual return must also be submitted to the Bureau of Internal Revenue.

The Philippines is negatively ranked as the world's 109th freest economy in the Heritage Foundation's 2010 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.

The Philippines ranks as the 144th easiest place in the world to do business, according to the 2010 Doing Business Survey by the World Bank. The survey measures factors including business start up procedures, time, cost and minimum capital required to start a business. It is also poorly ranked at 87th in the World Economic Forum's Global Competitiveness Report 2009-2010.

The Philippines ranks a negative 105th on the United Nations Human Development Index, which rates a country on its overall life expectancy, literacy, education and living standards.

For additional information on Philippines company formation, contact email@healyconsultants.com or telephone us at (+65) 6735 0120.