DOING BUSINESS AND INVESTING IN THE PHILIPPINES

The world is shrinking and people live in a global village where diversity, innovation, and strategic presence are the collective mantra of the Information Age. Trade and regulatory barriers have been broken and an increasing number of companies are looking beyond their borders towards richer markets in the developing world. The year 2000 heralded to not a few the Pacific century, and fittingly so with the emergence of China as an economic powerhouse rivaling the long standing pre-eminence of the United States, Japan, and Europe.

So…Why the Philippines?

1) Favorable tax regulations

The Philippines is not, by any stretch of the imagination, a tax haven. But for the serious investor with a long-term outlook, the Philippines offers tax incentives, tax holidays for pioneer industries particularly in the Information Technology sector where global growth is viewed in geometric terms, area or regional headquarters of offshore companies, a capital gains tax exemption for any sale or exchange of stocks for property, and an affinity towards the General Agreement on Tariffs and Trade (GATT).

2) Facility in registering corporations and partnerships.

The Philippines has probably one of the lowest prescribed paid up capitals in the world at PHP5,000, a Corporation Code allowing for the holding of bearer stocks with very few restrictions, requiring a minimum of only five (5) incorporators to register a corporation, allowing for the registration of foreign corporations and the appointment of a representative office without any prescribed capital outlay for infrastructure, with very few nationalization restrictions, and with an “express lane” for processing applications for registration of corporations and partnerships.

3) A developing market with a hospitable investment climate

The late 1990’s saw the Philippine stock market as one of the best performers in the Asia Pacific Region and into the millennium the country has remained to be one of the top exporters in the region. With several export processing zones and a long standing set of tax and capital equipment incentives for pioneer industries, and with a long-awaited political stalemate finally being resolved, the Philippines is once again a favored destination of investments in high-end electronics and semiconductors to footwear and clothes. Lately, the country has developed into a business process outsourcing and call center site in the heart of Southeast Asia. Competing with India with its fast growing industries, major multinationals such as Dell Computers and IBM have set up operations in the Philippines.

4) Skilled and educated labor force

Well-known companies ranging from the I.T. to Semiconductor industry have seen the advantages of establishing their offshore offices in the Philippines. Various I.T. firms such as Emerson, SPL, Siemens, and Intel have massively hired computer graduates in the country to provide offshore services to clients worldwide. Aside from the I.T. industry, many Filipinos are skilled in the communications, medical, and legal field.

5) Low cost of living and doing business

More and more international companies are seeing the value of establishing low cost global offshore centers in the Philippines. These companies are estimated to have savings of about 30% to 50% of their usual operating costs in countries with higher costs of living.

6) Familiar and compliant legal system

The legal concepts on property rights, business, contracts, government, personal rights, and other fields of law are offshoots of 50 years of American colonial rule. With the American and British legal models being the norm in international commerce and business, companies will readily adapt to the legal system with very little adjustment in their day-to-day operations.

7) Multicultural and diversified

With around 7,107 islands, this archipelago is host to 8 major dialects, more than 6 religions, and individuals with diverse nationalities. Filipino Chinese business communities and other groups of expatriates are scattered throughout the major islands of the Philippines from Metro Manila, Metro Cebu, and the former locations of the military bases in Pampanga.

8) English proficiency

Having been educated in the American educational system with English as one of the official languages and primary medium of instruction, the Filipino worker readily adapts to training and work across the spectrum of the labor market, from the semiconductor industry and outsourced legal and business processes.

9) Vibrant democracy

The Philippines in the 60’s and 70’s was the showcase of democracy in Asia. Then came Martial Rule under Ferdinand Marcos which underscored what was tamely referred to then as constitutional dictatorship. The late 80’s to the present saw the country regaining its more democratic and republican traditions, in the process opening itself up as a haven and market for the free world.

10) Strategic geographical location

Few countries in the Asia Pacific corridor enjoy a more strategic economic location than the Philippines. It is a few hours from the capital markets of Hong Kong and Shanghai in Mainland China, Singapore, Malaysia, Thailand, and Japan.

Specifically, the firm offers the following services to individuals and companies with a global outlook:

  • ORGANIZATION, INCORPORATION, AND REGISTRATION OF CORPORATIONS AND PARTNERSHIPS
  • INTRODUCTION AND REFERRAL TO BANKS AND FINANCIAL INSTITUTIONS FOR INVESTMENT FINANCING AND CORPORATE ADMINISTRATION
  • DOCUMENT RETRIEVAL AND SEARCH SERVICES
  • LEGAL, CORPORATE, AND FINANCIAL SERVICES

This Post Has 2 Comments

  1. I’ve been involved in taxes for lengthier then I care to admit, both on the personal side (all my working lifetime!!) and from a legal point of view since satisfying the bar and following tax law. I’ve put up a lot of advice and corrected a lot of wrongs, and I must say that what you’ve put up makes impeccable sense. Please uphold the good work – the more individuals know the better they’ll be equipped to handle with the tax man, and that’s what it’s all about.

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