Investors who decide to open a business in the Philippines as a foreigner have access to a growing market. This article does not describe the actual incorporation steps (you can read about these here), but rather talks about the pros and cons of starting a business in this Southeast Asian country.
| Quick Facts | |
|---|---|
| Entry requirements in the Philippines | Up to 30 days without a visa for EU citizens, short-term visa free entry available according to nationality for for-EEA nationals |
| Solutions for foreigners interested in opening a business in the Philippines offered our team | Upon request |
| Mandatory residency required to open a company in the Philippines as a foreigner | Residency is not mandatory |
| Residency by investment scheme available | The Freeport Area of Bataan (FAB) Investor Visa (FIV) Program is available to qualifying entrepreneurs. |
| Minimum investment amount for residency by investment (if applicable) | USD 75,000. Other conditions apply. |
| Relocation with family members for foreign investor residence permit holders | The family can be included on the residence permit application. |
| Types of companies available to foreign investors | One person corporation, foreign-owned domestic corporation. You can ask our team for more details. |
| Full foreign ownership permitted | Yes, subject to conditions in some industries. |
| Operation costs in the Philippines | Setup costs, office costs (see below), costs with the employees (see below), business-specific costs (such as those related to production, materials, etc.) |
| Payroll costs in the Philippines | Monthly social security contributions by the employer that can amount to PHP 3,530 according to the employee’s salary. |
| Accounting costs (approx.) | Can start at PHP 10,000 per month, depending on the chosen package. |
| Employment costs (minimum salary) | Varies according to industry. The minimum daily wage for non-agricultural workers is PHP695. |
| Office rental costs in the Philippines (approx.) | Can start at PHP 800 per square meter per month, depending on location. |
| Number of companies incorporated each year (approx.) | More than 50,000 in 2024. |
| Regulatory environment makes it easy to open a business in the Philippines as a foreigner | It has become easier |
Table of Contents
Advantages for investors who open a business in the Philippines
The Philippines is a Southeast Asian country with important opportunities for investment. The country has a fast-growing economy and potential in many different industries.
If you want to open a business in the Philippines as a foreigner, the following are your most important advantages for doing business here:
- Corporate tax credits and incentives can be attractive to those who open a business in the Philippines as a foreigner;
- The domestic market is a significant one;
- Sectors like tourism or renewable energy present important potential for development;
- The labour costs are lower compared to other countries;
- English is one of the country’s official languages, making it easy for international investors to start a business in the Philippines as a foreigner due to the fact that no significant language barriers are to be expected.
Foreign investors enjoy a welcoming business environment and can take advantage of the many sectors with important growth opportunities. However, how easy is it to open a business in the Philippines as a foreigner? We take a look at relevant data below.
Ease of doing business in the Philippines
According to the World Bank’s Ease of Doing Business Index for the year 2020, the Philippines had an overall score of 62.8 out of 100 (with the notable mention that the highest achieved score is not 100, but 86.8).
Our team presents some areas in which the Philippines scored well in terms of business creation:
- A low minimum capital for companies (about 5,000 Filipino pesos or approximately 100 euros);
- Lower company incorporation costs, compared to other countries (notable ones include the fees for registering the company).
Challenges for foreign entrepreneurs who are doing business in the Philippines
Some of the issues that can be expected by those who open a business in the Philippines as a foreigner include the larger number of procedures to be performed (approximately 13, according to the Ease of Doing Business Index) and the time required to complete these (which can be around one month in some cases).
Special conditions can apply in certain business fields, according to local requirements for obtaining special permits and licenses.
Foreign companies that open a branch in the Philippines will have to structure it accordingly and provide their foreign-issued incorporation documents.
Requirements foreign investors can expect in the Philippines
Like in any jurisdiction, those who set up a business in the Philippines as a foreigner do so by observing the local regulations for company creation. In this case, businesses are registered as per the Corporation Code.
Once the business is set up, it becomes liable for tax and, as an employer, the company will be required to observe the regulations of the Filipino Labor Code.
If you want to move to the Philippines to run your business, you will have to obtain a special investor’s resident visa, which will provide residency rights as long as the conditions for eligibility continue to be met.
If you want to know more about how to open a company in the Philippines as a foreigner, and what rules you will have to observe, please contact our local team of specialists.