It is easy to find many foreigners today looking to open a business. Philippines is a somewhat tricky market that needs careful studying before you decide to take that plunge. Before doing so, you should take time out to observe the culture and see what works and what doesn’t. Filipinos have a certain way of doing things and being aware of these little differences can help make your experience of doing business here a much better one. Remember the old saying, “it’s always better to know what you’re getting into.”
To start the process of incorporation, Philippines has two distinct forms of business ownership. There is the sole proprietorship business and in order to get this going, you will have to apply for a business name and register at the Department of Trade and Industry (DTI). The other form is a partnership, which will require you to come up with 3,000 Philippine pesos or more in capital. After getting this done, you must register with the SEC (Securities and Exchange Commission). Moving along in the process, you will find that there is a lot more involved when you decide to open a business in Philippines. Once your business is established under the Corporation Code and SEC registered, you will need to get five incorporators together. These five individuals you get should own share of the corporation and have 5,000 pesos in minimum paid-up capital.
After getting your deposit certificate from the bank verifying your paid up capital and your registered name from the SEC, you will need a CTC (Community Tax Certificate) in order to obtain Barangay clearance. This form needs to be filed in the place where you plan to set up and engage in business activities. This step is then followed by applying for a permit and municipal license from the local Mayor’s office licensing section. All this really is proof that you have the wherewithal to conduct your business legally and pay the necessary taxes during the applicable time.
Once this step has been hurdled, expect to receive an inspection visit from the Mayor’s office. They will be checking to see if your corporation is in order and you are conducting your business in the correct manner. You will receive a license and permit to operate once you pass and will be required to purchase special accounting books from the local bookstore. These are used for cash receipts and disbursements.
Completing this step will lead you to the next one which will require you to register for VAT (Value Added Tax) and other local and municipal taxes your corporation will be liable for. You will also need BIR (Bureau of Internal Revenue) permit to print additional sales receipts and invoices, as well as authorization for the use of electronic accounting software and non-government issued accounting ledgers.
These are some of the key steps to take when you decide to set up your business for incorporation. Philippines has a lot of good consulting firms you can hire should you need further clarification on how to get into the local business market.
