With an economy forecasted to grow by 6 to 7 percent in 2016 and a credit score at investment grade, the Philippines is back on the radar of some of the world’s largest foreign investors. Once known as the ‘the sick man of Asia’, the archipelago has become a resilient economy with years of solid growth up ahead. However, there a number of key considerations companies should take into account before expanding to the Philippines. Here are three of them:
Understand the Local Market. When expanding your business to a new country like the Philippines, it is imperative to gain a broad yet nuanced appreciation of local customs and habits. The Philippine market is unique, and the line between success and failure is usually thinner than most companies think. Thankfully, while language may be a problem elsewhere, the vast majority of Filipinos are fluent in English.
Find the Right Partner. Another key to success when doing business in the Philippines is to understand the legal and tax system. While 100 percent equity is allowed in most industries, there many areas with limited foreign ownership. In cases like this, choosing the right business partner is crucial. Do your due diligence or seek professional advice.
Choose the Best Mode of Investment. When setting up a business, the Philippines offers a variety of legal structures for foreign companies to choose from (domestic corporation, branch, representative office, regional headquarters or regional operating headquarters) and it is important to understand the pros and cons associated with each type. The best mode of investment will largely vary depending on your business’s purpose, capital and goals.
If you are looking to invest in the Philippines and to set up a company, do not hesitate to contact one of our business consultants to have a market overview and a detailed legal and tax analysis. With +300 companies registered in the Philippines, we advise some of the most influential businesses and institutions in the country.