Doing Business In The Philippines
A foreigner living in the Philippines can start a business. You have to avail of the the appropriate visa though. Well, I should say you should possess the appropriate visa. Many are sitting in a Bureau of Immigration jail for working without a permit. That and overstaying one’s visa are the two number one things that get foreigners into trouble here.
Requirements for Doing Business In The Philippines
In short, if you’re on a tourist visa, you can’t run a business in the Philippines. Foreigners must avail of one of four visas that I know of to work in the Philippines.
The four visas that I know of that allow a foreigner to make money are:
- Quota Visa
- SRRV — Special Resident Retirement Visa
- SVEG — Special Visa for Employment Generation
- Section 13 Resident Visa — Usually means marriage.
There are articles on this website that discuss some of these and I’ve covered it extensionally in the Basic Expat Training Manual. I plan a major update to the manual that will include a detailed discussion of doing business in the Philippines. If you purchase the manual, you are entailed to all future updates at no additional cost. Even when the price of the manual goes up.
I plan to add more information on visas to this site on the various visas. When will I have the time?
The steps required to properly opening a business are staggering! My girlfriend’s family are accountants. She sometimes did work for her sister. Her sister is a CPA. She would spend a lot of time registering a new business for her sister. After looking at the requirements, I can see why!
I’ll try to summarize them here:
- Verify and reserve the availability of the company name with the Securities and Exchange Commission (SEC)
- Deposit paid-up capital in the Authorized Agent Bank (AAB) and obtain bank certificate of deposit
- Notarize articles of incorporation and Treasurer’s affidavit with notary public
- Register company with the Securities and Exchange Commission
- Payment of documentary stamp taxes (DST)
- Obtain community tax certificate (CTC) from the City Treasurer’s Office (CTO)
- Obtain Barangay clearance
- Obtain mayor’s permit to operate at the Licensing Section of the Mayor’s Office
- Buy special books of account at bookstore
- Register for taxes at the Bureau of Internal Revenue (BIR)
- Obtain the authority to print (ATP) receipt/invoices from the Bureau of Internal Revenue (BIR)
- Print receipts and invoices at the print shops accredited by the BIR
- Have books of accounts and Printer’s Certificate of Delivery of Receipts and Invoices (PCD) stamped by the BIR
- Initial registration with the Social Security System (SSS)
- Complete registration with SSS and Philippines Health Insurance Company (PhilHealth)
Now that would be pleasant, no?
Some of this simply boggles my mind. I’m living in the Philippines on a tourist visa, so I can’t operate a business here. When I get rich, I’ll get a SRRV which will allow me to operate a business in the Philippines. You don’t have to be rich but you do have to be better off than I am now. The day is coming where I will have one.
When I saw step number 9, I thought that surely there were other methods that could be used. I asked Jessie and she said no, they have to buy those set of books and make all entries by hand. Surely there as to be another way. If not, that would mean there would have to be a lot of bookkeepers working for a chain like Jollibee to enter each sale of french fries into a ledger!
So while a foreigner can do business in the Philippines, the requirements are substantial. A CPA will preform these steps for you and let you get back to actually working on your business in the Philippines.
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Tagged with: Basic Expat Training Manual • Bureau of Immigration • Business In The Philippines • Living In The Philippines
Filed under: Expats in the Philippines
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I’ve just read your short article. So a foreigner staying in Philippines on a tourist visa can start their own business IF they are better off? Would you please define it by the measure of dollars? I mean how much money must I have if I want to start my own business? And what type of business are there open for foreigners?
That’s right, you can’t start your own business in the Philippines on a tourist visa. If “they” are worse off or better off. Which they are you talking about.
A better question would be what type of businesses are not open to foreigners. I’m aware of nothing that defines what business are open to foreigners. There are some that cannot be run by foreigners. Two I know of are tour guides and real estate brokers.
How much? I think you’d need to decide on which business in the Philippines that you would like to start. Then do the research on what it would cost. I don’t think anyone could tell you that. I suppose you could hire a consultant to first develop a business plan and then find out what those cost would be. Most would do that on their own, I think.
There are VISA’s that allow you to work in the Philippines.
You think a 630 plus word article is short? It is short for me. To fully explain everything I’ve learned could be put in a single book and sold. I plan to add it to mine but not a single book, at least not for now.
hi rusty.
i’ve been reading your blogs for a while now,, if i have time.. and i understand you’ve been living there since 2008,and on a tourist visa..now, when that thing expired, you have to “run” again to b.i. and u mention,u wanted to visit u.s.,but you have’nt done so…correct? do you know of any one(expat)that is on a 13a visa w/ their spouse that has gone back to u.s for a visit? what is their option/s??
thanks,
Yes, you have to go back to BI every 2 months to renew your visa.
I have not been back to the USA
I don’t understand your question about options. Options for what?
Hi Rusty,
Nice article. Just and additional information regarding #9 “Buy special books of account at bookstore”. Businesses can also register accounting software, POS machines, or cash registers, aside from the manual books of accounts. Companies should also register their employees with the HDMF Home Mutual Development Fund (Pag-IBIG fund) as a mandate for every Employers. Moreover, other business types, need to secure secondary licenses to operate. For example, pawnshops and money changers should obtain permit with the BSP (Bangko Sentral ng Pilipinas). Schools may also need to obtain endorsement from CHED or DepEd (Department of Education).
Thanks Vic,
I did my best to find out about the books and if they had to use those exact ones. My girlfriend has two years of accounting in one of the local colleges and her family works as accountants. Her sister is a CPA but we didn’t contact her. She was out of the Philippines at the time.
Jessie told me that those sets of books had to be used but I thought maybe, just maybe that had changed. I don’t see how SM and Jollibee could possibly do each transaction manually.
I appreciate the updated information beyond the basics!
hello there Rusty,i hope it’s okay if i ask how much is it going to cost us from step 1 down to at least step 5 so i may have an estimate. me and my partner would like to open up a contractor business.if i may ask,would it depend on the type of business? i would be glad to hear from you. – -Ariane
It ins’t expensive but I don’t remember the exact cost.
how about an estimate if you can rmember,sir?
Hi Sir, The business that we (me and my foreigner friend) will be a small food cart. For the business go easy or should i say no other things like he can’t own a business here cuz he only have a tourist visa and having a Partnership/ corporation will be hard to start (many permits to get,etc) we decided to use my name in registering the business. If other foreigner would think of that. better find someone who could you trust (if you’re single)
I don’t know what to say on this kind of thing. I don’t think anyone gets to worked up over a foreigner helping a Filipino get a business going which is basically what he is doing with you. But authorities are very well aware of this kind of thing and refer to it as “dummies.” I think the authorities have bigger issues to pursue rather than small things like this. One never knows though and competitors could always cause problems and will if they get the chance.
You really need a lawyer for these kinds of situations but I don’t know if that is warranted with one food cart.
It probably isn’t really legal what you’re doing though. I don’t know.
If his gf wanted to cause him issues she might call authorities and tell them he has a business in your name. Would they care? Probably not but you never know.
Yup, a friend of mine said (she’s taking up Law) suggested me to make a contract. Thanks maybe seeking Legal advise would be the best.
Hi Sir ,
i want to invest some money into the fishing business . Acc to Philippine law , a foreigner cannot own any business related to fishing , so i decided to put it in the name of my filipina wife . The investment will be more than 50,000 USD , so i am a bit scared . I have heard many horror stories about other foreigners in Philippines trusting their wife with their investment just to find out later that she and her family took it , and the foreigner was left with nothing . In my case , IF my wife decides to screw up with me and take it all , i wont even be able to sue her , bcz everything would be on her name .
Please tell me if i could take some precautions or some kind of contract with her before i invest my money . I just want to be safe .
Sounds like to me you know the risk. I can’t tell you how it will end up. That’s an awful lot of money in the Philippines though.