Business Consulting BlogTax BlogWhy Open an Export Company in the Philippines

July 10, 2012

The Philippines recently had its highest GDP rise in 20 years. Over 7.5%, in today’s world economy that is very decent growth for 2010. Many factors are contributing to the Philippine economic rise, one of the major areas strengthening the local economy are companies taking advantage of establishing export businesses in the Philippines.

There are many reasons to establish a business in the Philippines. Good labor pool, easy government registrations, and competitive pricing, but if you are able to find a good or service that you can export, the advantage becomes heavily stacked in the investor’s favor.

Reduction of Paid-up Capital

The Philippines has high capital requirements for companies that want to establish a local presence, or for majority owned foreign enterprises. This can deter SMEs from establishing or operating business locally. However if your company will export your finished product, the capital requirement is significantly reduced allowing for 100% foreign ownership to be more feasible for small businesses.

Tax Incentives

One of the easiest ways to receive tax incentives and other benefits from the government is to establish a business that will export at least 70% of the finished product. The two major government organizations that award benefits are the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) both have very similar benefits, except that PEZA requires that you are located within a PEZA zone or PEZA building.

Trade Agreements

The Philippine government has entered into strategic trade agreements with countries all over the world. This allows for the export of certain items to be tax and duty free depending on which region. Currently in the US, there is a bill allowing temporary duty free imports from the Philippines to help re-surge the garment industry locally.

The Philippine government is constantly striving to improve the local business environment to encourage more and more investment into export industries. Especially the Call Center and BPO services industry. Any business where the client is outside of the country is considered export, so the outsourcing industry is booming under the current policy.

All of these excellent reasons are why investors are choosing to open export oriented businesses in the Philippines. Contact Us for more information or to speak to some one about opening an export business in the Philippines.

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