For both locals and foreigners, doing business in the Philippines is not difficult. FCB Law explores the basic rules and processes of starting a business in the country from the perspective of a future business owner. FCB Law focuses on partnership and corporation only, explaining the basic differences between the two and the main steps to take for each in terms of legal, financial, and national issues. We also delve into the importance of the corporate secretary and treasurer as key officers in the company’s operations.
In our jurisdiction, the Securities and Exchange Commission and the appropriate national agency, by authority of different legislation and implementing regulations, are the government offices that control businesses. Our country excels in agriculture and natural resources and is opening doors to many possibilities for both locals and expatriates who are eyeing to do business with us. The Philippines is open for business, we give preference to overseas companies because of the capital, expertise, and technology that they generate. Sad to say, their effectiveness and experience is further enhanced by successfully dealing with a myriad of problems that commonly arise when doing business with the public. Starting a business is easy as long as the right points and procedures are followed, and you arm yourself with the right people to guide you. Starting a business in the Philippines can be an exciting venture with great potential.
The Legal Landscape of Business in the Philippines
The legal landscape in the Philippines is complex and exhibits its historical and cultural roots. For the majority of its population, this complexity imperceptibly blends into daily life. For foreigners, the laws afford a beacon that lights a path into the business future. Throughout the course of the business from the formation of the entity, through taxation, vis-à-vis dealings with employees, recruitment, possible disputes, the sourcing of their needs to obtain permits and licenses to the time they repatriate their profits, foreign investors are expertly guided by stringent, often arcane and archaic legal structures. Lawyers often make the legal path that businesses and individuals walk complex simply because that is what the law prescribes – that’s law, right? However, what really happens in the day-to-dayness of business, the time- and money-consuming tasks involved, the procedures followed, the legal resources needed and the obstacles encountered apart from the knowledge of legal principles and legal practice? Setting up a business Philippines requires knowledge of local laws and procedures.
Specialized Services of FCB Law
On top of our corporate practice, FCB Law also has a number of specialized services to cater to different business concerns including intellectual property laws, gaming laws, and COVID-19 compliance. If you are interested in learning more on how FCB Law can assist you in your specific business concern, please contact our team.
Trademark and Copyright
Your brand is important to you, and to others too. Protecting your brand is not only smart in terms of business but in terms of security as well. FCB Law can help you register your trademark or copyright your creative works with the Intellectual Property Office. FCB Law can also assist in prosecuting any trademark infringer.
Data Privacy, E-Commerce, and Fintech
The use of online channels is crucial for any business and attendant security and compliance concerns are not easy to address. FCB Law can help you navigate through the Data Privacy Law and e-commerce laws and regulations.
Mining, Extraction, and Natural Resources
The mining sensitive nature of the Philippines has opened up several opportunities to monetize the country’s natural resources which in turn has created many issues that may also require the assistance of legal counsel. FCB Law can assist you in navigating through the legal framework of Ownership or Acquisition of Land, Exploration, Development, Exploitation, Protection of and Compliance with Environmental laws and regulations, and General Decentralization.
Expertise in Handling Business Registration and Permits
Business permit registration Philippines is essential for operating your business legally. The Business Law Department of FCB is well particular in the setting up of small, medium enterprises, and multinational corporations alike. The firm can facilitate a speedy and efficient registration, permit acquisition, and licensing of almost any business with many government agencies like the Department of Trade and Industry, Securities and Exchange Commission, Central Bank of the Philippines, Philippine Economic Zone Authority, Department of Labor and Employment, Board of Investments, Philippine Overseas Investment Corporation, Local Government Units, Department of Social Welfare and Development, Housing and Land Use Regulatory Board, and the Bureau of Product Standards and other similar bodies.
FCB can assist in achieving tax compliance with the Bureau of Internal Revenue and the Bureau of Customs and other government entities with regulatory function. The Department can also offer assistance in acquiring the necessary certificates and permits required by the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (HDMF/Pag-ibig) and can also represent clients before these bureaus. FCB advises and represents employers facing DOLE-related cases or problems and other legal problems involving their employees – Labor Disputes, Money Claims, employment conditions, Collective Bargaining Agreements, Trade Unions.
Key Steps in Starting a Business in the Philippines
While the Philippines boasts one of the best performing economies in the region, it has been among the most challenging places to start a business, ranking 99th out of 190 countries in the ease of starting a business. Stiff regulations, confusing processes, and unnecessary fees further hinder growth in the country. FCB Law provides key initial steps in starting a business in the country. Initial steps in starting up a business include: searching and reserving a unique and distinct name for the proposed corporation; the necessary location clearances and business permits, acquiring an employer and an employee that will attend to basic requirements of the corporation, and collection of fees necessary to expedite transaction/s. FilSME will then handle the rest of the process for the filing and registration of the corporation.
Applying for business permits and other clearances can take up to a month or more in the Philippines, depending on your operating locations. A slow process can also lead to penalties and surcharges for being unable to comply during the prescribed period. With a growing number of businesses that are popping up throughout the country in response to the increasing consumer power of Filipinos, the requirement of getting a permit and having to comply with various clearances can hinder growth in setting up your desired business. To aid business owners in completing requirements and avoid penalties, FCB Law has also partnered with FilSME to streamline and expedite the accreditation process for businesses in the Philippines.
Understanding Business Structures in the Philippines
Starting a business is a complex and time-consuming endeavor. For those who have decided to pursue it, proper planning and guidance, combined with easy-to-follow instructions, are essential. In the Philippines, the following briefly lists information about the types and restrictions of doing business, the requirements for business name registration and reservation, and the pertinent documents for sole proprietorship. The underlying assumption is that the reader has no extensive legal knowledge and will rely on our law firm to set them up for the rest of the entire process. This article pursues the primary objective of mapping out the stages and costs of establishing a business in the Philippines.
The following are the types and restrictions of doing business in the Philippines. The types and requirements for setting up each type of business vary. A close preliminary look at the type of business that befits the future business venture will inform the reader of ample information to plan for starting a business. Broadly, doing business in the Philippines has three (3) (drilled down to at least fifteen sub-classifications) categories or types, namely, sole proprietorship, corporations, and partnerships. Data from the Securities and Exchange Commission (SEC) shows that businesses organized as corporations grew at an average annual rate of 6.92% since 2008, while partnerships grew by 4.9%. In contrast, the growth of sole proprietorship businesses plunged to 6.36% due to the increasing personal liability, high cost, heavy, and burdensome capitalization requirements. These types of business entities will be discussed further under the succeeding paragraphs, particularly the types of corporations and their benefits, including essential considerations in organizing your business.
Business Name Registration and Reservation
After determining the location of the intended business, the next step is to have the business name registered with the Department of Trade and Industry (DTI). It is important to ensure that the name being registered is not already in use or has previously been registered by another party. Once the business name has been properly cleared and verified, a term of five (5) years, which can be extended for another term of five years, is given to the registrant to exclusively use the proposed business name. The name should be composed of letters, words, phrases, symbols, numerals, other graphic elements, or any combination thereof should be clearly and neatly written (it is recommended that at least three (3) business names be submitted).
Securing Business Permits and Licenses
The Philippines is a signatory to the ASEAN Economic Community (AEC), set up with the overall goal of transforming ASEAN into a single market and production base characterized by the free flow of goods, services, and investments. The AEC envisions a globally competitive single market through the grand total of its 600 million people, and is expected to boost the Philippines’s GDP from 1.4% to 5% and increase the employment rate. At the heart of the AEC formation and the goal of the free flow of goods and services are the business permits, licenses, and certifications. Securing business permits and licenses can be a huge challenge as this may require dealing with different government agencies. As true as this is, securing the same can dictate the area a business can legally operate and its eligibility to transact business with other entities or potential clients.
A business permit is one of the key pieces of a business’s operation. In the Philippines, a mayor’s permit or a business permit is required when a business has to be in operation. Generally, anyone who intends to start a business must apply for a business permit prior to starting businesses. This means you cannot operate your business without a proper permit. is one of the pioneer businesses in the Philippines providing business support services for local and foreign investors of the Philippines. Using technology, the site grants users access to the various LGU and regulatory offices across the country
