Located in the heart of Southeast Asia, the Philippines draws investors and entrepreneurs from all over the world,
all looking for a slice of its robust domestic market and a prime position in the Asia-Pacific region.
With the
country’s growing population and steady GDP growth in recent years, setting up a business in the Philippines is a
smart move. However, it can be challenging for those who are unprepared.
In this
page, we give you some important things to keep in mind on how to set up a business in the Philippines.
Research and Preparation
Feasibility and marketing studies are a must for anyone planning to establish a business in the Philippines. You
will need to choose the ideal business structure that will
best accommodate the size and available resources of your business.
Registering with the SEC
You need to register a name approved by the Philippine Securities and Exchange Commission (SEC) before your business can operate in the country. After your proposed company name is approved by the SEC, you’ll be able to reserve it for a period of 90 days for a fee of PHP 40 to PHP 120.
Registering with the SEC is one of the most important phases in establishing a business. In addition to the approved company name, business owners must submit the following documents and materials:
- Treasurer’s affidavit
- Statement of assets and liabilities
- Articles of incorporation
- Details of the company including information on the officers, stockholders, and board of directors
SEC registration can be processed online or in person. The entire registration
process typically takes up to three days but can be expedited through the SEC’s “Green Lane” to reduce the duration
to just a single day.
SEC registration costs vary as these are equivalent to a fifth
of a company’s capital stock (does not exceed PHP 1,000), in addition to other related administrative costs.
Deposit Capital for your Business
Setting up a business in the Philippines requires prospective owners to deposit a minimum amount of capital in a
bank account. PHP 5,000 is the minimum amount set by the Philippine Corporation Code. Most banks also require
additional materials including identification papers and articles of incorporation.
Acquiring Permits
Prospective business owners are also required to obtain several
local government permits. One of the most important permits is the barangay clearance, which will allow you to
operate in your chosen location. A barangay clearance can be obtained for a fee of around PHP 500.
Other
permits required are:
- Environmental permit
- Fire permit
- Mayor’s permit
- Sanitary permit
Keep in mind that requirements vary between municipalities, so it is best to do your own research and ask around
when obtaining permits.
Post Registration
After registering with the SEC, you’ll need to complete a few additional steps, such as:
- Opening a corporate bank account for your employee payroll and company expenses.
- Getting a Taxpayer Identification Number (TIN) from the Bureau of Internal Revenue (BIR).
- Register with the Home Development Mutual Fund (HDMF) to provide housing benefits for employees.
- Register your business with PhilHealth for insurance coverage of employees.
- Registering with the Philippine Economic Zone Authority (PEZA) is not a mandatory step, but it is recommended especially for international businesses due to the number of tax benefits it provides.
After you’ve completed all of the steps above, the real work begins. You will then need to handle other aspects of
establishing a business such as looking for ideal office space, planning your day-to-day operations, creating a
recruitment strategy, and assembling your workforce. If you plan to handle payroll in-house, you will also need to
make sure your business complies with various rules and regulations in your region.
Navigating
the Philippines’ business landscape as well as the different registration processes can be daunting. FilePino’s
wealth of experience and access to a wide range of local resources can help set up your company seamlessly from
start to finish. We provide an unparalleled level of service designed to help business owners establish their own
company from registration, legal consultation, acquiring ideal office space solutions, to expanding your business
and beyond.
If you’re planning to set up a business in the Philippines, get in touch with us at FilePino today! Call +63.917.892.2337 or (+632).7792.9100, or send us an email at info@filepinostg.wpengine.com
