Why open a business in the Philippines? There are plenty of international destinations for business and investments so what sets Philippines apart.
Tax incentives for businesses in the Philippines. The government can award certain incentives for your business if it is an export oriented company or located in one of the Philippines Export Zones. As well as companies can register with the Board of Investments as long as their project is listed in the current Investment Priorities Plan. These incentives are quite attractive, starting with 4-6 years of income tax holiday where companies are exempt from paying any tax on their income. The benefits can include duty free importation of equipment and raw materials and easy employment of foreign nationals.
Other countries also provide benefits to investors so what makes Philippines tax benefits that much better? Ease of application and awarding of the benefits. In the Philippines the entire registration process can be completed in as little as 6 weeks.
There is of course the lower salary rate for skilled and unskilled labor as compared to western developed countries, but in many other developing countries wages can be even lower. There are pros and cons with that in mind as well. You will be able to find workers at all levels from simple employees with not much experience and knowledge to extremely experienced employees often with international training or employment in the past. These workers will vary in salary as with the level of work they are able to do.
Now in many countries there is skilled an inexpensive labor, but one must consider all the additional expenses required. In Vietnam for instance, an employer is responsible to provide his worker transportation to and from work, 3 meals in an 8 hour shift, and paid vacation leave. In the Philippines the employer is only required to pay salary and all government payments are deducted from the employees share.
Ease of doing business. Many foreigners who first try to enter the market in the Philippines may think that the business environment is difficult but quite the contrary. Although there is sometimes heavy bureaucratic process and things seem to be complicated there are often shortcuts that allow things to move much faster than in western countries.
The number one reason I encounter that most foreigners are wanting to come here and open a business in the Philippines is lifestyle. Foreign managers or business owners can easily enjoy some comforts that only the most wealthy in other countries get to enjoy, including live in maids and personal drivers. There are many beaches in easy locale from the Manila business district and accessible first class restaurants and shops.
With all of these reasons combined Philippines quickly rises towards the top of business destinations for any investor or company.
Please feel free to submit comments or questions. For more information on registering a business in the Philippines, Contact Us.