[Philippines] Learn About Setting Up a Company

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Planning to Set-up the company in the Philippines?

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[Philippines] Learn About Setting Up a Company

  1. 1. Perez Go Cimafranca Avanzado & Associates
  2. 2.  CPA-Lawyer-Male Supermodel-Ninja Graduated BS-Accountancy 2000 from USC Graduated BS-Law 2005 from USC Professor: Taxation, Financial Accounting, Cost Accounting, Auditing
  3. 3.  Partner – Perez Go Cimafranca Avanzado & Associates Vice-president – Thrustpoint Consulting, Inc. Partner – Maverick Ideas Areas of Specialty: Corporate Law & Information Technology, Business Development and Organizational Structuring
  4. 4. But he did not understand theprice. Mortals never do.But the price of getting whatyou want is getting what youonce wanted.- Neil Gaiman
  5. 5.  Why???  Separate source of income  Be your own boss  Fulfill your dreams and your purpose  Save the world  Rule the world
  6. 6.  Why not??  Risks – It could fail  No stability  Waiting game
  7. 7.  When? When the timing is right.  When you have enough capital  When you have enough time  When you have the right team  When you have the right attitude  Determination  Patience  Appetite for risk
  8. 8. He who knows when he canfight and when he cannot, willbe victorious-Sun Tzu
  9. 9.  KNOW THE TERRAIN  KNOW YOURSELF KNOW THE ENEMY
  10. 10.  Know the TERRAIN:  Who is your market?  What does the market want?  What does the market need?  Existing technology  New technology
  11. 11.  Know the TERRAIN:  Will the market buy your idea?  Is your idea being supplied by existing products?  If yes, is their product good? Will they have product loyalty? Can you fill a need or want that they can’t?  Does the government provide incentives / restrictions?
  12. 12.  Android was founded on 2003 by Andy Rubin, Rich Miner, Nick Sears and Chris White It was acquired by Google on 2005 Patent applications were filed on 2007 “Believe it or not, there were quite a few hardware devices that ran Google Android, even before the new T-Mobile G1. At the Mobile World Conference, held in February 2008,at least three cell phone prototypes were running simple Android applications. At the Google IO conference in May, a cellphone with a touch screen, Qualcomm processor, 256 MB of flash, and 128 MB of RAM was unveiled.”
  13. 13.  Know YOURSELF ◦ Abilities, knowledge, training  Workhorse  Rainmaker  Bean-counter
  14. 14.  Know YOURSELF ◦ Funds  Personal savings  Loan from friends and family  Loan from the bank and from microfinance  Sell existing assets  Investment from other people
  15. 15.  Know YOURSELF ◦ Equipment & Technology  How many developers / staff?  Can I get by on good enough or should I have the best?  Licensed, Freeware, or Pirate Bay?  Am I in the graphics & design industry?  What can I get for free?  LIST IT ALL DOWN
  16. 16.  Know YOURSELF ◦ Allies  Partners  Investors  Employees  Suppliers  Customers
  17. 17.  Know YOURSELF ◦ Product and Services  Product or Service or Both?  Canned product or SAAS or hybrid?  How will my product make life easier for my client?  Pricing  Support
  18. 18.  Know your “E N E M Y” ◦ Who is the competition? Who are they serving? What are their products?  Case Study: Google vs. Apple vs. Microsoft ◦ Goals: What do I want to achieve with my business?  Self-fulfillment goals  Professional goals  Monetary goals
  19. 19.  In other words, make a FEASIBILITY STUDY ◦ Qualitative – Example: SWOT Analysis ◦ Quantitative –  Investment Costs, ROI  Projected Financial Statements  Project for the next 3 years
  20. 20. Management of many is thesame as management of few.It is a matter of organization.- Sun Tzu
  21. 21.  What entity to use? ◦ Single proprietorship ◦ Partnership ◦ Corporation
  22. 22.  Sole proprietorship ◦ Only one person owns the business ◦ No separate juridical entity ◦ Register with the DTI for formal recognition ◦ Income Tax Rate: 10 to 30%
  23. 23.  Partnership ◦ At least 2 people ◦ No separate juridical entity ◦ Register with SEC for formal recognition ◦ Income tax rate: 30%
  24. 24.  Corporation ◦ At least 5 people ◦ Separate juridical entity  Obligations of the company are not obligations of the stockholders ◦ Register with SEC for formal recognition ◦ Income tax rate: 30%
  25. 25.  Should I have partners? ◦ Are you a team player? Are you a dictator? Should I have investors? ◦ Can you raise the capital on your own? ◦ Can you afford to pay back the capital? Should I have a foreign partner / investor?  What is his involvement? Funds, industry, or both?  How much can he put in?  Do I trust him? Does he trust me?  Safeguards
  26. 26.  3 Main Functions of Businesses ◦ Operations / Production (Workhorse) ◦ Sales & Marketing (Rainmaker) ◦ Administration (Bean-counter)  Human Resource  Accounting  Treasury  Custodian & Maintenance
  27. 27.  Employees  Partners  Regular employees  Sub-contractors  Outsourced admin. staff  Other considerations: wages, benefits, training, loyalty, discipline
  28. 28. "It is difficult to realize thetrue Way just through sword-fencing. Know the smallestthings and the biggest things,the shallowest things and thedeepest things."- Musashi Miyamoto
  29. 29.  Fixed Assets  Monthly Expenses ◦ Land  Wages ◦ Buildings  Rent ◦ Leasehold  Utilities Improvements  Marketing expenses ◦ Vehicles ◦ Furnitures & Fixtures ◦ Office Equipment
  30. 30.  Must have enough funds to last you 6 months to 1 year even without income. Give yourself a salary, enough to meet your monthly living expenses Always invest back into the company for its long term expansion Give yourself a bonus. Company savings / rainy day fund
  31. 31.  Tax-planning ◦ VAT or percentage tax? ◦ Income tax or special rates? ◦ Export? ◦ Special Benefits (BOI, PEZA, RHQ / ROHQ)
  32. 32. Sample Finance Plan
  33. 33. "When you decide to attack,keep calm and dash in quickly,forestalling the enemy...attackwith a feeling of constantlycrushing the enemy, from firstto last."-Musashi Miyamoto
  34. 34.  Base of operations / Principal Office Find out the requirements:  DTI / SEC  Name reservation  Articles of Partnership / Articles of Incorporation + By- laws  BIR  Registration Fees (TIN)  Documentary Stamp Tax  Local government  Business permit
  35. 35.  Employee benefits  SSS  Philhealth  HDMF / Pag-ibig Bank  Treasurer-in-trust account For businesses with special licenses  BOI  PEZA  TESDA  Etc.
  36. 36.  Draft your Articles and prepare your requirements Reserve your business name ◦ www.sec.gov.ph ◦ www.dti.gov.ph Deposit the “show-money” with your bank  Do not put all your money in, paralyzing operations Finalize your Articles and clean up your presentation Submit with the SEC / DTI
  37. 37.  Follow-up After Certificate is released:  Release of bank funds  Get TIN from the BIR & register your books of account  Get business permit  Register with SSS, Philhealth, & Pag-Ibig  Print official receipt  Alien employment permit, if you have foreigner employees / partners Find out the periodic compliances – set deadlines and schedules
  38. 38. All men dream: but not equally.Those who dream by night in thedusty recesses of their mindswake up in the day to find it wasvanity, but the dreamers of theday are dangerous men, for theymay act their dreams with openeyes, to make it possible."-T.E. Lawrence
  39. 39. Unit 5 Merjen Bldg., Gun-ob,Lapulapu City, CebuTelefax No. (6332) 340-4689jan.perez@pgcalaw.phUnit F Ground Floor, W Tower39th Street North, Bonifacio TriangleBonifacio Global City1634 Taguig, PhilippinesTelefax: +6325001308

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