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In 2015, the Philippines ranked as the 39th largest economy in the world based on the International Monetary Fund. The country also aims to have 500 startup companies by 2020, all of which would have raised USD 200 million for funding and USD 2 billion for valuation.
While it is no brainer that the Philippines sends out a number of migrants yearly, the country has also been accommodating to immigrants from different nations.
In the times when the country is opening up spaces for investment, it is also a perfect time for opening up your own business in the Philippines even if you are not a local!
Why Choose the Philippines?
Among its Southeast Asian neighbors, the Philippines rises as one of the fastest growing economies in the ASEAN region. With such an enticing opportunity for investment, businesses will definitely gain both their needed human resources and consumer market.
We Have Friendly Locals
Wherever you choose to go, locals would surely welcome you with warm smiles and open arms. Filipinos are a friendly bunch, trying to welcome strangers and newcomers and establishing enough rapport to build trust and get a “feel” of the person. This is an innate part of the Filipino culture, and you can also become a significant part of it too!
We Speak with Literacy and Good English
“Basic literacy is almost universal in the Philippines,” reports the Philippine Statistics Authority in its 2011 release on the data on literacy of Filipinos in the year 2008, where 95.6% of Filipinos 10 years old and above are reported literate.
In 2018, the country also ranked second among 21 Asian countries in English proficiency, and 14th globally in the recent English Proficiency Index. This is proof that Filipinos can communicate well and do business transactions effectively with high English proficiency.
More investors are coming to the Philippines to participate in trade, especially in the services sector. This is due to the naturally conversant attitude and good articulation of Filipino professionals which adds to the competitiveness of our market.
We Build, Build, Build!
The Build, Build, Build program of the Rodrigo Duterte administration aims to improve the country’s transportation services. From 2017 to 2022, the government allotted an amount of Php 8 to 9 trillion to materialize pending infrastructure plans and facilities.
In supporting the importance of this move, the Japanese International Cooperation Agency says that the poor infrastructure of the country has led to losses amounting to USD 2.4 billion solely in 2012.
With this nationwide infrastructure program, we all look forward to seeing improvements, especially in how money and time could be put to good use.
Skilled Workforce and Natural Resources
The country’s wealth of natural resources and raw materials give it a prime spot to emerge as a top economy as it may attract even extreme resource-seeking foreign investors who are looking for resources to be utilized.
To cultivate such resources, the Philippine workforce has been consistently proving itself as a steady and hardworking pool of world-class talent that would significantly contribute to improving the Philippine economy.
Going Around the Foreign Equity Restrictions, Legally
Having provided an in-depth discussion of the foreign equity restrictions and how the Philippine business landscape is emerging, we have come up with an easy list of how you may be able to go around the restrictions in setting up shop in the country.
The liberalization of the foreign investment law means that foreign investors may own 100% of the capital under some conditions.
Go for enterprises not on the negative list
As the most logical thing to do, the Philippine government has left out some key industries you may invest in without partaking in all the hassles. You may know more about what’s in the negative list here.
Invest with a Filipino counterpart
Consider getting the opinion of a Filipino partner who can give you good theoretical and practical advice in setting up a business in a particular industry. Having Filipino partners will not just make things easier as they may add to the in-depth technical and cultural know-how that your company needs. On top of that, a foreign investor who allows Filipinos and their corporation to do business will be allowed to own 100% of the capital.
Unrestricted Industries to Invest In, Now!
Despite the foreign equity restrictions discussed in our previous article, there are still several enticing industries in the Philippines that are expected to remain lucrative and could be owned by foreign nationals in the coming years.
In October 2018, President Rodrigo Duterte signed Executive Order (EO) No. 65, otherwise called the 11th Regular Foreign Investment Negative List. While the new list of investment areas in the negative remain the same, the EO now allows 100% foreign ownership of five investment areas.
The National Economic and Development Authority (NEDA) reports that the five new investment areas include:
Internet businesses
These include businesses which may be done online, including but not limited to web design, marketing, social media management, virtual assistance, freelancing services, consulting, e-commerce, and forms of gaming which do not involve gambling.
Teaching at higher education levels provided the subject being taught is not a professional subject
Non-professional subjects, compared to professional courses, offer more flexibility and are apt for students who want the technical know-how but do not necessarily wish to pursue a career out of a course.
Training centers that are engaged in short-term, high-level skills development that do not form part of the formal education system
Similar to those who teach non-professional subjects, training centers in the Philippines are becoming more and more popular as the number of skilled workers seeking certifications is rising in number.
The Technical Education and Skills Development Authority (TESDA), a government entity, acts as the national technical and vocational education and training authority in the country which provides guidelines and sets clear directions for the sector. To know more about them, you may click here.
Adjustment companies, lending companies, financing companies, and investment houses
As the label says, such companies can be operated by foreign entities in the country. These include but are not limited to adjustment houses and insurance services delving in issues of property, marine, casualty, and machine insurance, among others.
Wellness centers
While wellness and massage centers are very popular in the Philippines at present, there are still a lot of creative and necessary ideas that can be materialized. Among those very popular and attractive to consumers include spas, resorts, and farms that are commonly nature-themed and serve as avenues to destress and take a break from city life.
Are You Ready to Invest?
As putting up a business in the Philippines with the goal of fully owning it becomes a mini-mantra, you can always make use of extra knowledge in fixing your business needs despite foreign equity restrictions. Here’s how:
Do your research and plan ahead
Knowledge is power. Reading up on both the technical know-how and personal experiences of foreign investors in the country will always be helpful. This may put your perspective into place, help you see things at a wider lens, and encourage you to be good forward-thinkers, which are very important in maintaining a business.
Prepare documents in advance
Philippine agencies more often than not take more time in processing necessary documents needed for setting up your shop. If you plan on doing so, it is better to be always prepared with extra copies – sometimes certified as true copies – of important and relevant documents. Keeping a short checklist for every transaction would also be helpful in the future.
Seek professional assistance
In seeking professional assistance, Fernando Lagman Avenida Law Offices can be your professional immigration partner. We have in-house specialists who can help foreign and local investors alike who want to invest and put up their businesses in the Philippines. Our services will ensure that your immigration processes and transactions are legitimate, effective, and fast, with the help of our efficient immigration specialists.
References
Balea, J. (2015). Connecting Asia’s startup ecosystem. Retrieved from https://www.techinasia.com/philippines-startup-roadmap
Education First. (2018). EF English Proficiency Index Philippines. Retrieved February 21, 2019, from https://www.ef.com/wwen/epi/regions/asia/philippines/
Fernando Lagman and Avenida. (2019). The expat’s ultimate guide to starting a business in the Philippines. Retrieved from https://avenidalawoffice.com/the-expats-ultimate-guide-to-starting-a-business-in-the-philippines/
Fernando Lagman and Avenida. (n.d.). Immigration lawyer in Manila. Retrieved from https://avenidalawoffice.com/about/
Philippine Statistics Authority. (2011). Literacy of men and women in the Philippines (Results from the 2008 Functional Literacy, Education and Mass Media Survey). Retrieved from https://psa.gov.ph/content/literacy-men-and-women-philippines-results-2008-functional-literacy-education-and-mass-media
Pineda, A. (2018). Top 12 industries to invest in the Philippines. Retrieved from https://grit.ph/industries/
The President of the Philippines. (2018). Promulgating the Eleventh Regular Foreign Investment Negative List. Retrieved from http://www.officialgazette.gov.ph/downloads/2018/10oct/20181029-EO-65-RRD.pdf
Technical Education Skills Development Authority. (n.d.). TESDA Core Business. Retrieved from https://www.tesda.gov.ph/About/TESDA/86
Uy, D. (2016). Philippines ranks 9th in global migrants with 5 million abroad. Retrieved from http://www.bworldonline.com/content.php?section=Nation&title=philippines-ranks-9th-in-global-migrants-with-5-million-abroad&id=137282