According to PwC, the Philippines has everything a foreign investor would want in a country—a strategic location, a skilled labor force, a stable democratic government, and a growing economy. If you’ve decided to start a business in the Philippines, it’s time to learn how to go about it.
Launching a business in the Philippines is easy. You just need to finalize the business type (sole proprietorship, partnership, or corporation) and its name, then register with the following corresponding agencies. Some of these agencies even give incentives. Read on to find out more about the Philippine government agencies that foreign investors like you should know about.
Department of Trade and Industry (DTI)
The Department of Trade and Industry (DTI) is the primary regulatory arm of the Philippine government involved with the country’s trade, industry, and investment activities. Foreign investors and Filipino entrepreneurs alike need to register a name to associate their business with. The process, known as business name registration (BNR), is required only if the business owner is a sole proprietor and will use a name other than his/her true name.
To make BNR a faster and more convenient process, the government has created the Philippine Business Registry website to “facilitate business registration-related transactions by integrating all agencies involved in business registration.” The system includes a step-by-step process with online forms on what you need to register a business name.
Visit the official DTI website related to BNR for more information.
Bureau of Internal Revenue (BIR)
The Bureau of Internal Revenue (BIR) is an agency under the country’s Department of Finance. They collect revenues for the government in terms of taxes.
Every form of business in the Philippines, invested in by a foreigner or otherwise, needs to be registered to the BIR and have its own unique business tax identification number (TIN).
To get your business TIN, you need to go to the BIR Revenue District Office (RDO) where you intend to establish your business and the following in the same office:
- Obtain a Certificate of Registration;
- Register your books of accounts and loose-leaf books of accounts or a computerized accounting system;
- Request for permit to print and issue invoices and receipts. If you’ll be using a cash register or a point of sale (POS) system, you need to request a permit for that as well.
For more information, visit the official BIR website.
Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) is an agency under the Philippine Department of Finance responsible for regulating the securities industry. They have jurisdiction and supervisory power over all corporations, partnerships, and associations in the country, so any foreign investor who wishes to form his/her company under those business types must register with the SEC.
Similar to the DTI, SEC has a number of online services to make the process of business registration for partnerships and corporations easier. To know more, visit the official SEC website.
Board of Investments (BOI)
An attached agency of DTI, the Board of Investments (BOI) is responsible in promoting investments in the Philippines. Foreigners who invest in business projects and activities that will “provide opportunities in employment, develop the productivity of resources, and heighten the volume as well as the value of exports” are incentivized by the BOI.
Qualified foreign investors (that is, foreign business owners who are duly registered in either/all the necessary agencies) may apply for BOI incentives such as an income tax holiday, exemption from taxes and duties, and non-fiscal incentives, among many others.
Learn more about the incentives on the official BOI website.
Philippine Economic Zone Authority (PEZA)
Businesses cannot operate just anywhere in the Philippines for environmental preservation and legal reasons, and the Philippine Economic Zone Authority (PEZA) is the agency that determines whether your company will be allowed to do business in these select areas.
If you are a foreign investor looking to conduct an export-oriented partnership or corporation in the Philippines, particularly in designated Economic Zones, you are required to register with PEZA. There are different PEZA registration processes for different export industries.
PEZA, however, offers incentives to businesses who are eventually permitted to operate in the Economic Zones. These incentives include several tax exemptions after certain periods, as well as zero taxes and duties on imported capital equipment and raw material, and much more.
Visit the official PEZA website for more information on registration and their incentives.
SSS, PHILHEALTH, and PAG-IBIG
Foreign investors who are looking to employ workers in the Philippines in their business must ensure that each one of them is registered and covered by the required government benefits. These benefits include coverage by:
- Social Security System (SSS)
- Philippine Health Insurance Corporation (PhilHealth)
- PAG-IBIG Home Development Mutual Fund
The SSS provides and administers a pension fund for workers in the private sector that has the following social security benefits: sickness, retirement, maternity, disability, death, funeral, and employee’s compensation.
PhilHealth, on the other hand, provides affordable health insurance coverage for all citizens in the Philippines. Finally, PAG-IBIG is a national savings program and affordable home financing for the Filipino employee.
With the booming economy of the country, it only makes sense for foreign investors to start a business in the Philippines. To do that, though, it’s important to go through these government agencies and go through the necessary registrations. Doing so will not just enable you to operate legally, but will also help protect your rights as a business and even qualify you for some incentives in the process.
Rocky Chan is a lawyer and business consultant who excels in corporate formation, immigration procedures, and client relations. In the last 7 years, he honed his craft in the field of foreign investment consultancy.
