The Philippines’ economic dynamism is rooted in strong market demand, backed by increased real incomes and strong remittances, with rising urbanization, a growing middle-income class, and a large and youthful population. Together with success in the area of information technology and industrial growth, companies have turned into something different. Although its economy is largely dominated by the agricultural sector, this newly developed country still has a lot of opportunities, not only for Filipinos, but also for foreigners.
Why is the industry in the Philippines good for business?
In addition to being abundant in natural and mineral resources, stunning tourist spots and diverse cultures, the Philippines is also a strong market for local and foreign entrepreneurs. Here are the reasons why:
The Philippines is in the center of the asian region, making it a strategic country that plays an enormous role not only during the period of war, but until today in the field of trade and trade, resulting in faster economic development. It is situated within four hours’ flying time from the region’s main capitals. It is a vital entry point for over 500 million people in the ASEAN market and a gateway for foreign shipping and aircraft suitable for European and American enterprises, situated at the crossroads of eastern and western businesses.
Manpower services that are reliable and efficient
One of the most compelling advantages the Philippines has over any other Asian nation is the Filipino workforce. With a higher priority in its education, the country’s literacy rate is 99.08% of the region’s best. Aside from its mother tongue, English is taught in all schools, making the Philippines one of the largest English-speaking countries in the world.
Openness to new chances
Most Filipinos are easy to talk with and hospitable and, considering the past of foreign colonizers, are open to improvements and new ideas. Challenges and concerns are generally easily acknowledged and resolved regardless of how destiny decides them and there is little to do about it. Even in the worst calamities that have struck the nation over the past few years, they are still resilient.
Confident customers are Filipinos
In the country, Filipinos are optimistic spenders who put their hard-earned cash on new clothing, holidays, savings and home improvements. It showed the Philippines as the top spenders worldwide and on top of even the United States, which ranked fourth, based on the survey conducted by Nielsen. In Asia-Pacific, the Philippines outranked neighboring countries like India and Indonesia, which came second and third respectively.
The Philippines is an archipelago that makes connecting every island a challenge, but a well-developed communication, transport, business and economic infrastructure connects the three major islands and distinguishes the Philippine economy through the initiative of its government. The liberalization of inter-island shipping and domestic aviation, highly accessible by air, water and cyberspace, has further sparked improved facilities and services.
Unlimited market chances
The Philippines has grown and developed different areas for investors and provides a vibrant consumer market accustomed to a variety of product choices created by a competitive domestic economy. Given its diverse community, backed by its people’s confident purchasing power, it offers a strong opportunity for new business ideas, so see for yourself what opportunities this country offers.
What company should I move into?
Keep in mind all the reasons why doing business in the Philippines is fine, let us now examine the top seven best industries on which you can venture;
Tourism and Travel – The Philippines is proud of its scenic beauty and luxurious tourist destination, with an immense demand for services, packages, deals, amenities, lodging, travel, transport, food and beverage and other services related to travel.
Agriculture – Agriculture As a tropical region, the Philippines has a vast agricultural land mass that stretches to 9.7 million hectares of fertile soil suitable for various crops such as coconut, rice, mango, sugarcane, maize, coffee, banana, pineapple and cacao. The nation also produces poultry and livestock that serve the region’s basic needs, so it’s a good industry to be involved in.
Fabrication – Given the low labor costs of the country, the Philippines is a good place to venture into manufacturing, including food and beverage, petroleum, transportation, and industrial machinery, textiles, and other goods.
Services for IT, BPO, and Company – Growth in the IT sector has led to a rapid and rapid expansion of Business Process Outsourcing, with BPOs emerging as the top contributors to the Filipino economy over the last decade.
Real Estate Company – Even if it has already accomplished too much in the last few years, real estate is still considered a booming industry. There will still be a need for real estate space and offices as the population keeps rising. As investors can enter a whole market for home seekers and visitors, it is a fairly sustainable market with attractive potential for high returns.
Retail – In the midst of currency inflation, overall consumer spending and consumption, thanks to the high employment rate in the country, is still high. A driver of this increase has been online shopping and delivery, with more Filipinos using mobile apps to meet their shopping needs.
Healthcare – As the country’s health spending has increased significantly over the past few years, this industry appears to be picking up momentum. This is a good sign that a safe lifestyle and a good business are prioritized by individuals.
In order to start a business in the Philippines, do I need a visa?
It is easy to stay in the Philippines with a visa on arrival for a few months for most foreign nationalities, but if you want to stay for 3-6 months or longer, you will need a business visa or a visitor’s visa. This helps you to negotiate alliances, attend international conferences, engage in corporate meetings, and others.
Temporary visitor visa applicants should usually apply to the Philippine Embassy or Consulate, which has jurisdiction over their place of residence. Although some visa applicants can apply for a visa at any Philippine Embassy or Consulate abroad, others can only apply for a visa at the Embassy or Consulate of the Philippines in their country of origin or their legal residence.
The minimum requirements for the application of temporary visitor visas are as follows:
- Passport/Travel Document Valid for a period of at least six (6) months beyond the stay in the Philippines;
- Visa submission forms duly fulfilled;
- Images of the passport (2 pieces);
- Evidence of bona fide status as a businessman or tourist;
- Verified return or onward travel tickets to the nearest destination port; and
- Payment of Fees for Visas
Laws and Regulations for a Company
Foreign investment is encouraged in most sectors through fiscal and non-fiscal incentives in the Philippines. These benefits and their availability requirements are specified in the country’s Republic Act No. 7042 or the Foreign Investments Act of 1991 (FIA). Although there are limits on maximum capital investment for certain sectors, all of them can be found in the Negative List of Foreign Investment in the Philippines. If your company of choice falls into the sectors outlined in the negative list, a given recap must be followed.
International equity capital laws are as follows:
Foreign equity is limited to 40 percent for domestic business enterprises (defined as companies deriving at least 40 percent of their revenue from sources within the Philippines). It also means you can’t be the president of a corporation. However, if you have a minimum paying capital of US$200,000 or more in your domestic market sector, the equity limit can be lifted and foreigners can own their companies entirely.
They can abolish the capitalization requirement for export-oriented companies (which are described as companies deriving at least 60 percent of their revenue from sources outside the Philippines) and go beyond the 40 percent limit on equity held by forecasters.
For export-oriented companies (which are described as companies deriving at least 60% of their revenue from sources outside the Philippines), the capitalization requirement can be abolished and equity held by foreigners can surpass the 40 percent limit.
The Philippines also has an Anti-Dummy Law that penalizes persons who breach foreign equity limits and those who evade nationalization laws. It has been a tradition for foreign investors to use the name of their Filipino marriage partner or partner with a local to work around the restrictions to prevent further problems, but this arrangement also presents some risks.
Get help with registering your business in the Philippines through Spearhead
Spearhead can provide you with assistance with business registration. If you are a foreigner looking to register your business in the Philippines, you can contact us to get started.