The Philippines is starting to magnet huge investment opportunities within its web. In fact, one of its ASEAN neighbors Singapore, recently pledged $185.7 million in investment which is expected to create almost two thousand jobs.
Setting up a company in the Philippines can be challenging especially if you don’t know what government agencies to deal with and their ways of working. More so if you are not aware of the possible pain points to start with so here are a few challenges that may come your way if you wish to set up a company in the Philippines. After all, in world ranking of ease of doing and starting a business, Singapore and Philippines are on opposite poles – Singapore ranks second and sixth in ease of doing and starting a business respectively while the Philippines placed 117 and 173 on both categories.
Brace yourself for the long wait. While the Securities and Exchange Commission (SEC) of the Philippines – the equivalent of Acra in Singapore – has recently implemented the online submission of application for registering companies, it would take some time before the system can be polished and perfected. This means that as an investor, you might have to adjust your time-to-market strategies as completing the registration cycle locally could take between 16 to 18 weeks for corporations and between 18 to 21 weeks for other company structures like Representative Office and Branch Office.
Multiple government agencies for local permitting. Obtaining your Certificate of Registration from the SEC is just phase 1 of the registering process. The most tedious part has to deal with a number of government divisions within the municipality where your business is registered. This can be a bit challenging especially if you don’t know who to approach and where to get the documents that they would ask you to provide.
Periodic Filing Reports with the Bureau of Internal Revenue. There are more or less 28 mandatory reports which need to be prepared and submitted to the BIR for a corporation. Switching to a representative office where income tax is not applicable does not necessarily mean reduced tax reports because periodic filings will still be required from such business structures hence, it is very important that you hire a reliable accounting team or firm to diligently do these reports for you.
If you’re a Singaporean investor who wants to expand your operations here in the Philippines but is not sure which corporate vehicle to choose, please do not hesitate to contact us.