How easy is it to start up a business in the Philippines. Discover the different legal entities and the government agencies that help you starting a business in the Philippines. Thensee how some made it happen through with 4 short cases studies.

1. Setting up a business
in the Philippines

2. First of all, it’s not an option
anymore. It’s mandatory.

3. The Philippines, with its vibrant economy and strategic regional location, has
been pulling significant foreign capital as well as a good number of number of
expats in recent years.

4. It has proven itself
resilient in the global
economic slowdown
and is considered an
emerging market
economy today.
#2 GDP growth in the
world at 6.2% in 2015.

5. What is your business like?
Business to Business
Business to Consumer
Business to Government

6. How do you want to do business?
Foreign investors can enjoy the perks of doing business in the Philippines
through government incentive programs.

7. Legal Framework
If a foreign corporation intends to establish a business
presence locally, all legal aspects must be considered.
3 Dimensions of doing business in the PH:
1. Qualifications of the foreign enterprise to
formally enter the economy
2. Amenability to suit of a foreign corporation
3. Tax treatment of the foreign enterprise

8. BOI is the main agency in charge of investment
promotion in the country.
You can register with the BOI if you engage in any of
the activities included in the country’s priority
investment areas as listed in the Investment
Priorities Plan (IPP).
For non-pioneer industries, foreign ownership is
limited to 40% and below, unless you can guarantee
an export sales of at least 70% of total sales.
BOI Incentives:
• Income tax Holiday (ITH)
• taxes and duties exemption on imported spare parts and export tax
• Reduced duty rates for capital equipment, spare parts, and accessories
• Tax credits on domestic breeding stocks, genetic material, raw materials, and supplies.
• Additional deductions from taxable income on labor expense as well as necessary and
major infrastructure work.
Option 1:

9. Location and eligibility of activity are the two
main qualifications to be able to register with
PEZA.
The location should be in designated Special
Economic Zones or Ecozones. Eligible activities
include export manufacturing, information
technology (IT) service export, tourism, medical
tourism, and agro-industrial export
manufacturing among others.
PEZA Incentives:
• Income Tax Holiday (ITH) of 4 years for non-pioneer projects and 6 years for pioneer
projects. After the ITH expires, a 5% Special Tax on Gross Income and exemption from all
local and national taxes is applicable.
• Zero taxes and duties in the importation of capital equipment, raw materials,
machineries, and spare parts. An exemption on wharfage duties and export tax is
applicable as well.
• Zero VAT on local purchases and an exemption for all local government imposts, fees,
licenses, or taxes.
• Zero expanded withholding tax.
Option 2:

10. A foreigner cannot form a solely-owned
business in the Philippines. You can
only have up to 40% ownership in a
corporation. You can start a
corporation with a minimum capital of
5,000php.
PH Incorporated
Option 3:
Agents/Agencies
Option 4:
You can also hire an individual or a
private agency to register the
business for you. They can do all the
work such as

11. Philippine Government
Agencies
Once you’ve established your business, opened shop, and hired your
employees, you have to familiar yourself to these government agencies
covering employer contributions to provide employee benefits.

12. All employees working for private
companies must apply to be SSS
members. The purpose of the system is
to protect the members in case of
inability to work due to sickness,
disability, maternity, old age, death, and
other contingencies that result to loss or
income or financial burden.
The Bureau of Internal Revenue is
responsible for assessment and
collection of all internal revenue taxes,
fees, and charges. Companies should
make sure that their employees
employment status is updated at the
BIR.

13. On behalf of the employees, employers are required
to contribute to the Home Development Mutual
Fund, also known as the Pag-ibig Housing
Development Program.
The agency provides the Filipino workers an
opportunity to own a house and lot in easy-
payment plans with low interest, which will be
directly deducted from their monthly salaries.
All employees are required to be contributors
of the Philippine Health Insurance Corporation
or PhilHealth, the medical insurance company
of the Philippines. Contributions depends on
actual employee monthly salaries. Members
and dependents are given health and
hospitalization subsidies.

14. Business Culture
Doing business in the Philippines can be tricky for newcomers. There are
certain nuances that make some things quite complicated.
These are a few that you should bear in mind, when dealing with Filipino
colleagues. (Don’t say we didn’t warn you!)

15. Punctuality isn’t always one of the best traits of Filipinos, and this should not
drive you nuts.

16. Merienda: Filipinos love to eat, and don’t be surprised that snacking in
between main meals is mandatory.

17. Nickname: most Filipinos have
really long names. A second
name won’t be enough; others
will have a third (and maybe a
fourth!). So it’s best that you
ask how they want to be
called.
Mark Angelo
Ferdinand
What’s your
nickname?
Mark? Angelo?
Ferdinand?
It’s Mac-Mac.

18. The Philippines is recognized as the TEXT capital of the world, and rightfully
so. The mobile phone is every Filipino’s main accessory, sending an average
of 2 billion SMS /day!
Filipinos use SMS for almost everything – from fax confirmation to traffic
updates. Get used to colleagues texting in a meeting and while engaged in a
conversation. It’s the primary means of communication for them.
Do you love
me too?
<3 <3 <3
What do
you do?
WRU?

19. Employing People
Cultural subtleties aside, Filipinos would exceed your expectations at work.

20. The country’s labor force is estimated at 41 million with
450,000 new graduates every year.

21. Flexible solutions that suit your
business needs

22. Client: Road assistance platform
Problem: The client wanted to
revamp and display a new e-
learning platform for its Training
Center in Brussels.
Solution: They hired a team of
developers in manila to get the job
done and maintain a web
responsive platform as well as a
new corporate website.
Business Area: Creative services
& Back office
Setup: Project Outsourcing
Risk: Medium
Cost: Low
Replicability: Medium
Learning Curve: Low
Case Study # 1: Project Outsourcing

23. Client: A global biopharma
Problem: The client has a factory in
Shanghai that needs to deploy quickly a
new SAP module for production. They
have trained staff all over the world but in
China to do so. Production manager and
blue-collars only are employed in China.
Solution: Hire a project manager in the
region and secure paper works based
timesheets approved by purchasing dpt
in Brussels. An ex-UCB employee is hired
in Manila and will travel back and forth to
the factory with local; the rest of the time,
she will work from a serviced office in
Manila.
Business Area: Services & Consulting
Setup: Staff Leasing
Risk: Low
Cost: Medium
Replicability: Medium
Learning Curve: High
Case Study # 2: Remote Staffing

24. Client: A developer and manufacturer of lifts
Problem: The Swedish bespoke lift and
elevator company sees potential in Asia and
deployed a first core sales force in
Shanghai. From there, it wants to resell in
the whole region, but every country has…tax,
import and service rules. Plus, clients want
an invoice in their currency from a local
company.
Solution: The client hired the services of
Eastcube, a Belgian import-export company
that:
a. recruited and hosued a sales agent
b. contracted with a freelance Swedish
technician based in Manila
c. contracted with a local import
agent/custom broker
Business Area: Industrial Sales
Setup: Insourcing
Risk: Medium
Cost: Medium
Replicability: High
Learning Curve: High
Case Study # 3: Industrial Reselling

25. Client: Management consulting firm
Problem: Client is active in PPP around
Asia and sees a big growth potential in
PH, especially over the last 2 years.
Solution: Lease office space in the heart
of Manila’s newest CBD without the
hassle of dealing with SSS, HDMF, PHIC,
and BIR.
Business Area: Services & Consulting
Setup: Seat leasing
Risk: Low
Cost: Low
Replicability: High
Learning Curve: High
Case Study # 4: Hosting & Seat Leasing

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Eastvantage is a provider of bespoke, personalised outsourced
solutions to SMEs in the areas of Business Support, Technology and e-
Marketing. Operating from the heart of Southeast Asia in Manila,
Philippines,
We employ over 200 employees and growing with a footprint in over 20
cities across the globe, servicing clients from a diverse array of
industries including banking, energy, advertising, food and beverage,
retail and e-commerce. Learn more about our services, company
culture and our people through www.eastvantage.com.
Eastvantage Business Solutions, Inc.