FDA-Approved Food Supplements in the Philippines: A Quick Guide (Part 1)

As the threat of the COVID-19 pandemic continues to loom, the adage “health is wealth” has never been more true. People are starting to invest more seriously in the physical well-being of their families and loved ones. This is where FDA-approved food supplements in the Philippines come in.

With experts saying that a vaccine is at least a year away, maybe even more, prevention is taking center stage. Supplements help individuals increase their daily intake of recommended energy and nutrient requirements. This makes people less vulnerable to common illnesses as well as the dreaded COVID-19.

If you are thinking of selling, importing, and distributing food supplements in the Philippines, you must first obtain the approval of the Food and Drug Administration (FDA). This article provides you the basics of FDA Philippines food standards, including items such as the difference between drug-based and processed food categories for supplements, prohibited and allowed ingredients, making therapeutic claims, and what to include in a food label.

In the upcoming Part 2 article, we will discuss the detailed requirements for FDA approval and the corresponding fees and charges.

What are Food or Dietary Supplements?

As defined by Administrative Order No. 2014-0029, these are processed food products that help supplement the diet. A food supplement may contain dietary ingredients such as vitamins, minerals, herbs, amino acids, and other dietary substances made from plant, animal, natural, or artificial matter. It may take various forms, including those of liquids, capsules, pills, tablets, powders, and gels. It is not marketed as a conventional food or as replacement for drugs and medicines.

Does my dietary supplement fall under the Food or Drug category?

Based on FDA Philippines Officer Order No. 22 s. 1991, your vitamin or mineral product will be classified as drug-based if it meets the following conditions:

1) Has clinical therapeutic claim/s with regards to a specific vitamin deficiency or disease;

2) Has a concentration per dosage form of greater than 150 percent of the Philippine Dietary Reference Index (PDRI) for water-soluble vitamins and/or greater than 105 percent of the PDRI for fat-soluble vitamins;

3) Takes the form of a pharmaceutical dosage or injectable; and

4) Has additional pharmacologically-active ingredients present

On the other hand, your product will be categorized as a food supplement (more specifically a “processed food”) if:

1) Its indication is that of “Dietary or Health Supplement;

2) Its concentration per dosage form is less than 105% of the PDRI for fat- soluble vitamins and/or less than 150 percent for water-soluble vitamins;

3) It may be available in both non-pharmaceutical and pharmaceutical dosage form except parenterals;

4) It is available as either a purified or a natural product; and

5) It contains no additional pharmacologically-active ingredients.

Under FDA Philippines Administrative Order No. 2014-0029 (Annex A), food products are further classified according to microbiological risk: low, medium, and high. If your dietary supplement contains herbs and botanicals and/or products with other nutritional substances, it will be categorized as a high-risk food; if it has vitamins and minerals and/or amino acids, it will be considered as a medium-risk food. The authorization process and the inspection priorities of the FDA would depend on these subcategories.

What ingredients can be included in my health supplement?

FDA-approved food supplements in the Philippines must meet the regulatory body’s key standards. Among these is the ASEAN Negative List, which details substances that should not be used in health supplements. The prohibited items include:

1) Deadly Nightshade

2) Marijuana

3) Hemlock

4) Chaparral

5) Opium / Poppy

For its part, FDA Philippines Circular 2006-016 enumerates all authorized food additives. These are some examples of what we call additives today:

1) Artificial sweeteners

2) Emulsifiers

3) Food Colors

4) Flavor Enhancers

5) Preservatives

Any food additive and functional classes that will be adopted by the Codex Alimentarius Commission (CAC) shall be automatically included as an addendum to the circular’s Appendix for Food Additives.

What kind of claims can my food supplement make?

Food product claims are regulated under FDA Philippines Circular 2007-002. This circular adopts the CAC Guidelines for Use of Nutrition and Health Claims as its standard for evaluating nutrition and health claims made in advertisements and food labels. It must be noted that products that make unproven claims could be banned from being sold in the Philippine market.

Other relevant regulations include:

1) Administrative order 2014-0029: prohibits the use of curative and therapeutic claims under Chapter VI, Part C of the Guidelines in the Registration of Processed Food Products.

2) Administrative Order 2014-0030: precludes the declaration of misleading and prohibited claims, specifically those in the labels of prepacked foods, under Section VII.

What should be on the label of my dietary supplement?

FDA Philippines Administrative Order No. 88-B s. 1984, as amended by Administrative Order 2014-0030, regulates the labeling of prepacked food, particularly food supplements. Its main provisions are:

1) The following details must be included on the label:

  • Product name
  • Brand name and/or trademark
  • Full ingredient list
  • Net content

Note: Either a per volume or per quantity indication is allowed. For multi-packs, the total quantity as well as the number of individual portions must be indicated.

  • Name and address of the manufacturer and/or repacker, packer, importer, trader, and distributor

Note: For imported products, the country of origin as well as the complete name and address of the importer should be indicated.

  • Lot identification
  • Storage conditions
  • Expiration date
  • Food allergen information (to be mentioned below the ingredient list)

Note: The following allergens and its derivative products must be clearly indicated on the label:

a) Cereals containing gluten
b) Crustaceans
c) Eggs
d) Fish
e) Milk, including lactose
f) Peanuts
g) Soybean
h) Sulfites
i) Tree nut and other nuts
  • Instructions for use
  • Nutrition information

Notes:

Full nutritional declaration is required, especially if a product claims to contain certain nutrients. Only foods for special purposes, medical or otherwise, are exempted. The quantities must be displayed in a tabular form and declared according to the portion size or a specific weight or volume. Vitamins and minerals are to be expressed in mg or µg. The exceptions are Vitamin A, D, and E, which are to be expressed in IU (International Units).

The indicated recommended daily allowance must conform to the Philippine Recommended Energy and Nutrient Intakes (RENI) for male adults aged 19 to 29. Foods for specific groups may use values applicable to such age groups, which will have to be indicated in the labeling. The actual nutrient content of vitamins and minerals should at no point be lower than 80 percent of what is declared on the label. There is no upper limit of overages for micro-nutrients and fiber though.

2) Additives must be properly labeled according to CAC standards.

3) All mandatory information on labels must be in English and/or Filipino. For imported products, the use of other languages is allowed but they should also carry a corresponding English translation.

4) For FDA-approved food supplements in the Philippines, the following statement in Filipino must be included in every advertisement or promotional effort as per Administrative Order No 2010-008:

“IMPORTANT REMINDER: THIS PRODUCT IS NOT A DRUG AND SHOULD NOT BE USED FOR ANY TYPE OF ILLNESS” (non-official translation)

This message should be printed in a size of at least one-third of the size of the largest letter or logo. It must be prominently printed using capital and bold letters using either Arial or Tahoma font.

5) Qualification for other standards such as for halal (Muslim) and kosher (Jewish) may be included in the label but would require proper substantiation. The assigned registration number may also be included on the label.

Need help with registering your food or dietary supplement?

If we handle it, you are guaranteed to have your FDA-approved food supplements in the Philippines. Let us help you. Contact us here and stay tuned for our next article on the registration process, requirements, and fees.

FDA CPR Certificate of Product Registration Requirements and Application Process in the Philippines

Certificate of Product Registration FDA Phils
Certificate of Product Registration FDA Phils.

Before you can start selling food items, cosmetics, or drugs in the Philippines, you need to secure first a Certificate of Product Registration (CPR) from the Food and Drug Administration (FDA).

Obtaining a CPR for your product involves knowing if it needs one, having the proper documents and requirements, and applying for it using the FDA’s system. Take note that each product being registered will have its own CPR. This means that each variant, flavor, and dosage will have its own certificate—basically, each item must be registered individually. There is no bulk processing option for FDA CPR application on their website.

Need to know more about how to apply for a Certificate of Product Registration from the FDA? Keep reading.

Click the links below to go directly to that part of this article:

  1. Products with Required Certificate of Product Registration (FDA CPR)
  2. Requirements for FDA CPR
  3. How to Get Certificate of Product Registration from FDA
  4. Automatic CPR Renewal
  5. Penalty for Products with no CPR

Products with Required Certificate of Product Registration (FDA CPR)

Which products need a CPR? The following items do:

1) Food Products (canned goods, bottled beverages, infant formulae, etc.)

2) Medicines, Pharmaceuticals, and Over-the-Counter Drugs

3) Medical Devices

4) Food Supplements (vitamins, minerals, energy boosters, etc.)

5) Toys

6) Veterinary Products (pet medications, vitamins, supplements, etc.)

7) Hazardous Household Products and Urban Pesticides (cleaning supplies, disinfectant sprays, etc.)

Do cosmetics need a Certificate of Product Registration?

Cosmetic products do not have a CPR, and instead are required to have a product notification. While the FDA needs to be informed regarding such cosmetics, the procedure outlined here is for obtaining a CPR only.

Requirements for FDA Certificate of Product Registration

If your product is listed above, you are required to process a CPR for your product. The following are the requirements for doing so:

1) A valid LTO or License to Operate which can be obtained from the FDA

2) A clear, scanned, and colored copy of loose labels of all packaging sizes for the products (or equivalent, as defined by FDA), as well as pictures of the product from all angles and in different packaging sizes. This allows easy recognition of a product as the same one being registered.

  • For food supplements, include blister packs, Alu-Alu packs, and secondary packaging (i.e. paper box or cardboard box).

3) Other requirements for traders, wholesalers, and distributors of locally manufactured food products / for importers and distributors

4) Documents to support product claims, such as:

  • Technical/nutrition health studies or reports
  • Market research studies
  • Certificate of analysis, quantitative analysis, and computations
  • Scientific reports or studies published in peer-reviewed scientific journals
  • Supporting certificates to allow the use of “Sangkap Pinoy”, Halal, Organic, Kosher, and other claims in compliance with current labeling requirements

5) Certificate of Analysis stating essential details to determine product compliance to food standards and regulations for the following:

  • Medium to high-risk products with standards of identity such as food for infants and young children, foods intended for special medical purposes, bottled water, etc) the certificate of analysis must be uploaded. The list of low, medium, and high risks can be found here on the FDA website.
  • Fortified food products covered by R.A. 8176 (iodized salt) and R.A. 8976 (cooking oil, flour, and refined sugar)

6) For food supplements, additional requirements include:

  • A stability study of the actual food supplement
  • Safety data, such as toxicity tests, must be attached to address safety concerns regarding the product.

7) Actual representative product sample of food supplement (for initial application only, and is not needed during CPR renewal).

Note: This is a list of general requirements; additional requirements and procedures may be required by the FDA depending on the product being registered. Confused? You can ask us about it.

Once you have these requirements, you can opt to register these products online using the FDA e-registration system, which can be found here.

How to Get Certificate of Product Registration from FDA

The following is the basic CPR e-registration procedure (as per FDA Circular 2016-014):

1) Secure your FDA E-registration log-in details.

2) Log in to the FDA website e-portal.

3) For first-time product applications, click on “New Case.”

4) Type the details of needed information of product, such as brand name, product name, food category, list of ingredients, product specifications, and other pertinent information.

5) Upload the required documents. The documents needed vary per product and if the product is for export or not. Please check the FDA website for more details.

Note: Maximum 2MB per attachment in PDF or PNG format, and 25 MB max for all attachments per application

6) Print Order of Payment and pay corresponding fees either in person at the FDA Main Office located in Alabang, through the Bancnet online payment gateway option as per FDA Advisory 2015-021, or whatever FDSA recommends on their site.

7) You can track the application progress through the process map indicated on the FDA website.

Automatic CPR Renewal

To make CPR renewal automatic, the following conditions must be met:

1) The renewal application must be filed before the expiration date of the CPR;

2) The automatic renewal fee must be paid prior to the filing of application; and

3) There should be no condition stated at the back of the issued Certificate of Product Registration.

In case of a condition, compliance with the condition must be met and proven by including a scanned copy of the acknowledgment letter from the FDA indicating that the condition has been met.

Penalty for Products with no CPR

What if you release the product to the market without the proper certification? Not only is this illegal, but once FDA is notified, they will issue a cease and desist order. They will take your products off the market AND require you to pay fines AND process CPRs for your products that were taken off the shelves.

Going against the law can destroy the name of your business as well. The FDA issues public health warnings against products without CPRs, and this means bad publicity for your brand.

All in all, the hassles and penalties brought about by not doing things properly is just not worth the risk.

Does the application for an FDA CPR sound too tedious?

If applying for a CPR sounds like a hassle to do it yourself, then let us help! Our team of experts can help you with the whole FDA process, not just for product registration. If you have any inquiries, you may contact us here.

The Complete FAQ Guide on How to Renew Your Business Permit in the Philippines for 2020

Having a business registered in the Philippines requires you to renew its business permits annually.

It doesn’t matter if the company is a Single Proprietorship, a One Person Corporation, a Partnership, a Corporation, a Branch Office, or a Regional Headquarter (ROHQ). All business establishments, per Philippine law, must renew their permits or face possible closure of their operations as well as a loss of face to their clients. 

To help you avoid long lines and heavy monetary penalties, we give you our complete FAQ guide on how to renew your business permit in the Philippines for 2020. 

Frequently Asked Questions (FAQs):

 

What permits do I need to renew? When is the deadline for each? 

Business permit renewal season involves coordinating with three different government entities: the barangay, the city or municipality, and the Bureau of Internal Revenue (BIR). 

1. Barangay Permit or Clearance (Deadline: January 20)

A barangay permit certifies that a business establishment is compliant with the requirements set by its local government unit (LGU) of operation. It is also a requirement when securing the Mayor’s Permit. 

2. Mayor’s Permit or Business License (Deadline: January 20)

Each city or municipality has its own rules to comply with. The Mayor’s Permit certifies that a company is compliant with the ordinances of the city or municipal it operates in. 

3. BIR Renewal of Registration (Deadline: January 31)

The BIR issues a Certificate of Registration (COR) to a company when it is first established. To ensure its validity from year to year, a business establishment must pay a renewal fee of PhP 500.00 every January 31.

 

What are the penalties for non-renewal or late renewal of business permits? 

City or Municipality

If filing is not accomplished by January 20 of each year, the LGU concerned will impose a 25 percent surcharge on top of the unpaid taxes, charges, and fees assessed. Also, a negligent company will incur a 2 percent monthly interest on all unsettled fees, including the surcharge, until everything is paid off.

Extremely delinquent businesses, on the other hand, run the risk of closure and/or seizure of its properties and assets.

All these penalties are imposed by the Local Government Code of 1991.

BIR

A company that did not comply to the January 31 deadline will be fined an amount ranging from PhP 5,000.00 to PhP 20,000.00. Its officers also face the risk of imprisonment, with the term ranging from six months to a maximum of two years. 

 

What requirements do you need for business permit renewal with each government office?

Barangay

1. 2019 Barangay Permit (original and photocopy)

2. Official Receipt from last year (original and photocopy)

3. Accomplished application form (2 copies)

4. Renewal fee (varies per barangay)

City / Municipality

1. 2020 Barangay Permit (to be availed first for the current year)

2. 2019 Mayor’s Permit (original copy)

3. 2019 Official Receipt (original copy)

4. 2019 Audited Financial Statement

5. Lease Contract (if changing address)

6. Community Tax Certificate (CTC) or Cedula (to be secured first from City or Municipal Hall)

7. Comprehensive General Liability Policy (CGLP) insurance for 2020

8. Official receipt of CGLP availed

9. Renewal fee (varies per city or municipality)

Depending on the LGU concerned, you may also be asked to provide the following documents:

1. Fire and Safety Inspection Certificate (original copy) 

2. Sanitary Permit (original copy)

BIR

1. BIR Payment Form 0605 (Click this link to download from the BIR website)

2. PhP 500.00 annual business registration fee

 

What are the steps for renewing business permits? How long will the process take? 

Barangay

Estimated Time Needed: 1 day

1. Visit the barangay hall in whose district your company operates in. Secure a renewal application form.

2. After filling out the form, submit it along with the original copies of your 2019 Barangay Permit and Official Receipt.

3. The barangay’s permit division will then assess your renewal application and documentary requirements. If everything is in order, you may then pay the necessary renewal fee.

4. You will be given the Official Receipt for your Barangay Permit. You may then claim your new Barangay Permit on the date indicated in the Official Receipt.

City / Municipality

Estimated Time Needed: 1 to 2 weeks

1. Secure a renewal application form from the Business Permits and Licensing Office (BPLO) of the LGU that your company operates in.

2. Fill out the form then submit along with the documentary requirements for evaluation.

3. Based on the submitted documents, the BPLO will issue an assessment notice containing the amount of local business tax, real property tax, and other fees that your company needs to pay for 2020. You can choose to pay the entire annual fee in full or in quarterly installments. You may also contest the amount and request a lower assessment. 

4. Bring the assessment notice and pay the required fees at the City Treasurer’s Office. They will provide you the Official Receipt to be presented when you claim the Mayor’s Permit certificate.

5. If your documents are in order, pay the Mayor’s Permit renewal fee at the City Treasurer’s Office. You will be given a receiving copy of your documents.

6. It will take some time for the certificate to be released. In the meantime, the Official Receipt will serve as proof that you renewed your Mayor’s Permit on time if asked. 

7. You may then claim your new Business License from the City Treasurer’s Office on the date indicated in the Official Receipt.

BIR

Estimated Time Needed: 1 day

1. Fill up BIR Payment Form 0605 with details of your business establishment.

2. Bring the BIR Payment Form 0605 to your RDO’s Authorized Agent Bank (AAB) and pay the PhP 500.00 annual business registration fee there.

 

What other tips should I know about business permit renewal?

1. Don’t procrastinate. Preparing the documents required by your LGU at the last minute will land you in long waiting lines and possible payment of penalties. Use the whole month of December if necessary. Remember: the deadline for the whole process of business permit renewal is January 20.

2. Be OC (obsessive-compulsive). Paying attention to small details can save you a lot of time. Organize your documents as soon as you receive or print them. Triple-check what is written in your application form and its attachments. Bring enough cash before you head to the battle lines. 

3. Patience is a virtue. No matter how early you start preparing, you will probably still face lines at your barangay hall, city hall, and BIR RDO. Make sure you’re ready to play the waiting game. Bring a fan, towel, bottled water, and even a good book if you’re so inclined.

4. Copies can save you. You never know how many copies of a particular document will be asked of you at the counter. Bring extra copies of your required documents so you don’t have to run out to the nearest photocopier (and lose your spot in the lines).

5. Avoid fixers. Do everything aboveboard. Don’t listen to individuals who promise shortcuts and discounts in the business permit renewal process. Their quick fixes may also quickly land you in hot water for tax evasion.

 

The best partner for renewing your business permit is someone who tells you the fees and steps needed exactly as it is. At DAYANAN Business Consultancy, we do exactly just that. Having helped over a hundred companies through the process, we know exactly how to save you time and effort. This allows you to focus on your core business functions better.

Let us take care of filling out forms and going to government offices for you. Contact us today!

The Apostille: Simpler Authentication for Documents To Be Used Abroad

HCCH

Bringing documents from one state to another and having their validity recognized has always been difficult. A foreign corporation that wants to establish a Philippine subsidiary has to go through several steps just to authenticate its articles of incorporation from abroad. But with the Philippines recently joining the Apostille Convention, things are bound to get easier.

The Convention

The Apostille Convention (formally known as the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents) provides for the use of a security certificate called the “Apostille.” This simplifies the authentication process for public documents used across signatory countries. The Philippines officially became a member last September 12, 2018.

Drafted by the Hague Conference on Private International Law (HCCH), the international treaty will take effect between the Philippines and other states party to it on May 14, 2019. This is pending changes to be made by the Supreme Court to the Rules of Court with regards to foreign public documents. The Office of Consular Affairs under the Department of Foreign Affairs (DFA) will be responsible for implementing the treaty.

The Apostille

Previously, a public document must be authenticated both by the foreign ministry of its originating country and the foreign ministry of the country where it is to be used. This process is usually handled by embassies and consulates of the concerned states. In the Philippines, the certification issued by the DFA is popularly called the “red ribbon.”

Once the Convention becomes effective, public documents would no longer need to be consularized. An apostillized public document will immediately have legal effect in a foreign country where it is presented. Of course, the affixing of a red ribbon is still needed for states which are not members of the Convention.

The apostille is a standard form that can be placed or attached to the original document. It testifies that a document bears the signature of an authorized person, the capacity of the signatory, and an official stamp or seal. It does not, however, certify the content or purpose for which the document was issued.

Covered Documents

Public documents that can be apostillized according to the Convention are the following:

a) documents emanating from an authority or an official connected with the courts or tribunals of the State, including those emanating from a public prosecutor, a clerk of a court, or a process-server (“huissier de justice“)

b) administrative documents

c) notarial acts
       Note: This may include seemingly “private” documents such as contracts and wills

d) official certificates which are placed on documents signed by persons in their private capacity, such as official certificates recording the registration of a document or the fact that it was in existence on a certain date and official and notarial authentications of signatures.

Those that are not valid for apostillization include:

a) documents executed by diplomatic or consular agents;

b) administrative documents dealing directly with commercial or customs operations.

 

The apostille, once it is fully implemented in the Philippines, can boost trade and investment while making personal transactions easier. It will be useful for the millions of Filipinos working abroad as well as the large number of expatriates who have made (or are planning to make) the Philippines their second home.

BI Issues New Rules on Work Permits

work permit swp pwp

The Bureau of Immigration (BI) is imposing stricter requirements and procedures in issuing special work permits (SWP) and provisional work permits (PWP) to foreigners intending to work in the country.

According to BI Commissioner Jaime Morente, the Bureau will now require foreign applicants to submit additional documents before they are issued work permits.

Morente also said that the BI will see to it that no work permit will be issued to aliens who will be employed as construction workers, cashiers, janitors, carpenters, and other blue-collar jobs. Professions classified as regulated by the Professional Regulation Commission (PRC) will also not be allowed without the approval of the PRC. 

“This is to ensure that these work permits are issued only to aliens whose jobs could not be performed by Filipinos,” the BI chief said.

Morente said that the new rules were issued to address the reported increase in the number of foreigners employed in the country to the alleged detriment of Filipino workers.

“These new rules are meant to protect the interest of local workers, as we have observed that in the past, foreigners may abuse their permits and take away jobs from our kababayans,” he stressed. 

Among the requirements that work permit applicants will submit are: validity of stay as tourists; address, existence, nature of business, and financial viability of petitioning company; and SEC and other government licenses to operate.

Only authorized BI officers at the main office and alien control officers in the bureau’s field offices may approve or disapprove applicants for SWP and PWP.

DOLE New Rules

For the issuance of Alien Employment Permits (AEP) DOLE now requires that a company have either 50 Filipino employees and PHP5,000,000 in paid-in capital, PHP10,000,000 in paid-in capital. This does not apply to IT Enterprises registered with PEZA.

Dayanan Business Consultancy’s accredited visa consultants are available to assist with all your visa applications.

Five Benefits of Document Imaging Systems

document_imaging_system

Businesses are constantly looking for ways to cut costs and increase productivity. One of the many ways this can be achieved is by investing in advanced technologies that will eradicate timely hand-operated tasks. These allow organizations to waste less time on routine but necessary office work and more time on Important Matters.

What is a Document Imaging System?

  • A Document Imaging System is a software that allows users to store, organize and retrieve digital records. (E.g. scanned images, photos and general office documents).

What can it do to help your Business?

  • Be able to instantly access documents anytime, anywhere.
  • Implement an electronic workflow.
  • Sophisticated search and retrieval capabilities.
  • Merge a Document Imaging System with other essential business applications to manage IT costs and propel efficiency.
  • Guarantee document recovery in the case of a disaster. It allows multiple backups to be stored at offsite locations providing a means to recover data.

Document Imaging Systems are vital to an organization’s capability to process and share information quickly, helping employees make decisions faster. However, This  is only one step forward. Organizations looking to get the most out of the technology often forget two other crucial technologies that make these systems possible, which are Optical Character Recognition and Data Capture.

It’s almost always the same story every time. Businesses purchased a Document Imaging System believing  it would improve the productivity and reduce inefficiencies in the workplace but in their evaluations, they neglected to think about all the documents they presently have sitting in their filing cabinets around the office.  Whilst they can effectively take care of new, electronic documents, they do not have way of digitizing or extracting important data from existing paper documents. Optical Character Recognition and Data Capture are what make this possible. They allow organizations to get rid of cabinets full of paper documents, and make all of the information held on them accessible online throughout the whole organization. Without this capability, employees are left with half of the information,therefore only half of the productivity gains. With these in place, employees can appreciate not having to run around back and forth to the file cabinet or be asked to track down a relevant document out of the Archive.

The Best System we’ve come across, so far, has been Enadoc. Where you are able to Search efficiently, Organize, Capture and Secure your document, and  most importantly save time and money.

Has your organization invested in a Document Imaging System? If so, did they simultaneously acquire Optical Character Recognition and Data Capture solutions?

 

Contact us NOW for a presentation on how Enadoc can help your business succeed.

Starting a Business in the Philippines

Starting Business PhilippinesWhy would anyone want to start and do business in the Philippines?

The bureaucratic and legal hurdles a company or entrepreneur must overcome to incorporate and register a new firm here can be frustrating. However, with the help of a business consultant, that has extensive experience in Philippines business registration and setting up foreign owned businesses here, such as Dayanan Business Consultancy, that is not an issue.

The fact that so many foreign companies have regional headquarters, representative offices, foreign branch offices and other business setups in the Philippines, speaks volumes that it is well worth wading through the red tape to have operations here.

English Speaking and Talented Human Resources

One of the biggest advantages of doing business in the Philippines is that it has a higher level of English proficiency than any other Asian country. There is also an immense pool of talented Filipino graduates and experienced workers providing cost effective human resource solutions.

In addition, the Philippine Government offers incentives through a dozen Investment Promotion Agencies (IPAs) promoting “Economic Zones” in selected areas of the country. Incentives include various tax exemptions, tax holidays, special investor’s visas, and others to promote investment in businesses.

These include:

•    The Philippine Board of Investments (BOI)
•    The Philippine Economic Zone Authority (PEZA)
•    The Tourism Infrastructure and Enterprise Zone Authority (TIEZA)
•    Aurora Special Economic Zone Authority
•    Authority of the Freeport Area of Bataan (AFAB)
•    Bases Conversation Development Authority (BCDA)
•    Clark Development Corporation
•    Cagayan Economic Zone Authority (CEZA)
•    PHIVIDEC Industrial Authority
•    Philippine Retirement Authority
•    Regional Board of Investments (ARMM)
•    Subic Bay Metropolitan Authority (SBMA)
•    Zamboanga Economic Zone Authority

These secure ready-to-occupy world-class, environment-friendly, and competitively priced Special Economic Zones are waiting for various types of businesses, both commercial and industrial, to take advantage of them.

Depending on which Investment Promotion Agency is being utilized; these can include manufacturing, BPO, tourism, agri-business, IT services and more.

For example, the Philippine Board of Investments is focused on BPOs, the electronics industry, shipbuilding, and renewable energy. PEZA’s priorities are focused more on manufacturing and industrial agricultural manufacturing for export and BPO’s, as well as overall economic zone development and operation. There is some overlap in the kinds of businesses to which the IPAs will grant incentives.

It’s More Fun in The Philippines!

The Tourism Infrastructure and Enterprise Zone Authority of course – “encourage local and foreign investments in our tourism industry through the establishment of Tourism Enterprise Zones (TEZs) in strategic areas of the country.”

The tourism industry opens up a tremendous amount of opportunities for businesses, especially in the small to medium range.
TIEZA is giving incentives for the development of tourism related businesses such as:

•    Travel and tour services
•    Transport services – land, sea, and air
•    Adventure sports such as mountaineering, spelunking, and scuba diving
•    Convention organizers
•    Accommodation establishments – hotels, resorts, condotels, Inns, motels and homestay operators that cater to tourist
•    Tourism estate management services
•    Restaurants, shops, and department stores
•    SPAs
•    Health and Wellness facilities
•    Museums and Galleries (Especially in cultural heritage zones)
•    Theme Parks
•    Convention Centers
•    Zoos

To learn more about the procedures, time, and cost involved in starting a business in the Philippines, business contact the DBC Team now for a free consultation.

Opening Personal & Corporate Bank Accounts in the Philippines

Corporate Bank Accounts Philippines

Corporate Bank Account Philippines

All corporations doing business in the Philippines need a local bank account. There are many local banks, foreign owned banks and branches of foreign banks to choose from. The main advantage of opening an account with a local bank is their numerous branches all over the country, mall outlets open on weekends and payroll ATM accounts for employees.

 

Requirements for Company, Corporate or Commercial Bank Accounts in the majority of Philippine Banks:

1.    Certificate of Incorporation or License to Transact Business
2.    Articles of Incorporation
3.    By-laws
4.    Board Resolution to open bank account naming the authorized signatories
5.    Board Resolution election of company officers
6.    Secretary’s Certificate certifying the Board Resolution to open bank account naming the authorized signatories
7.    General Information Sheet
8.    Two valid IDS for each signatory

Requirements for Foreign Individuals Bank Accounts in the majority Philippine Banks:

Foreign Individuals: most banks require that foreigners present an Alien Certificate of Residence (ACR) issued by the Bureau of Immigration. Tourists who stay in the Philippines for more than 59 days will be issued an ACR. All others who are issued work visas or any other kind of long stay visa will also be issued an ACR.

Two  Valid IDs:
Passport
Driver’s license
ACR
Retirement ID issued by an official authority
DOLE ID

Some banks may require proof of address.

Ways around Philippines Foreign Investment Act

Many people ask how they may circumvent the Philippines laws on foreign ownership as stated in the foreign investment negative list.

Most inquires pertain to foreign ownership of land and foreign ownership of corporations engaged in retail business or where the foreign equity is restricted to 40% or less.

No legal solutions exist for a foreigner to own land in their own name or to own more than the legal percentage of a business allowed to him by law. The use of nominees with side agreements is illegal and is a violation of the Anti-Dummy Law.

The Department of Justice Opinion No. 165, Series of 1984 indicates what may determine that the Anti-Dummy Law is being violated:

•    That the foreign investor provides practically all the funds for the joint investment undertaken by Filipino businessmen and their foreign partner.
•    That the foreign investors undertake to provide practically all the technological support for the joint venture.
•    That the foreign investors, while being minority stockholders, manage the company and prepare all economic viability studies.

Foreign investors may think they are protected by side agreements naming them the beneficial owners, however when the time comes to use the agreement in court, they will discover that the agreement has no value being a document that violates the law.  Another common occurrence is for the foreign investor to find that the nominee has taken over the business or has sold all the business’s assets.

No matter what people may tell you, the best way to do business in the Philippines is to obey the foreign investment act regulations regarding foreign ownership. Shortcuts only equal unnecessary risks.

Rules of Court of the Philippines, Rule 138

Rule 138 – Rules of Court
Attorneys and Admission to Bar

ATTORNEYS & ADMISSION TO BAR

Rule 138

Section 1. Who may practice law. –  Any person heretofore duly admitted as a member of the bar, or hereafter admitted as such in accordance with the provisions of this rule, and who is in good and regular standing, is entitled to practice law.

Sec. 2. Requirements for all applicants for admission to the bar. –  Every applicant for admission as a member of the bar must be a citizen of the Philippines, at least twenty-one years of age, of good moral character, and a resident of the Philippines; and must produce before the Supreme Court satisfactory evidence of good moral character, and that no charges against him, involving moral turpitude, have been filed or are pending in any court in the Philippines.

Sec. 3. Requirements for lawyers who are citizens of the United States of America. –  Citizens of the United States of America who, before July 4, 1946, were duly licensed members of the Philippine Bar, in active practice in the courts of the Philippines and in good and regular standing as such may, upon satisfactory proof of those facts before the Supreme Court, be allowed to continue such practice after taking the following oath of office:

“I, _________________________, having been permitted to continue in the practice of law in the Philippines, do solemnly swear that I recognize the supreme authority of the Republic of the Philippines; I will support its Constitution and obey the laws as well as the legal orders of the duly constituted authorities therein; I will do no falsehood, nor consent to the doing of any in court; I will not wittingly or willingly promote or sue any groundless, false or unlawful suit, nor give aid nor consent to the same; I will delay no man for money or malice, and will conduct myself as a lawyer according to the best of my knowledge and discretion with all good fidelity as well to the courts as to my clients; and I impose upon myself this voluntary obligation without any mental reservation or purpose of evasion. So help me God.”

Sec. 4. Requirements for applicants from other jurisdictions. –  Applicants for admission who, being Filipino citizens, are enrolled attorneys in good standing in the Supreme Court of the United States or in any circuit court of appeals or district court therein, or in the highest court of any State or Territory of the United States, and who can show by satisfactory certificates that they have practiced at least five years in any of said courts, that such practice began before July 4, 1946, and that they have never been suspended or disbarred, may, in the discretion of the Court, be admitted without examination.

Sec. 5. Additional requirements for other applicants. –  All applicants for admission other than those referred to in the two preceding sections shall, before being admitted to the examination, satisfactorily show that they have regularly studied law for four years, and successfully completed all prescribed courses, in a law school or university, officially approved and recognized by the Secretary of Education. The affidavit of the candidate, accompanied by a certificate from the university or school of law, shall be filed as evidence of such facts, and further evidence may be required by the court.

No applicant shall be admitted to the bar examinations unless he has satisfactorily completed the following courses in a law school or university duly recognized by the government: civil law, commercial law, remedial law, criminal law, public and private international law, political law, labor and social legislation, medical jurisprudence, taxation and legal ethics.

Sec. 6. Pre-Law. –  No applicant for admission to the bar examination shall be admitted unless he presents a certificate that he has satisfied the Secretary of Education that, before he began the study of law, he had pursued and satisfactorily completed in an authorized and recognized university or college, requiring for admission thereto the completion of a four-year high school course, the course of study prescribed therein for a bachelor’s degree in arts or sciences with any of the following subjects as major or field of concentration: political science, logic, english, spanish, history and economics.

Sec. 7. Time for filing proof of qualifications. – All applicants for admission shall file with the clerk of the Supreme Court the evidence required by section 2 of this rule at least fifteen (15) days before the beginning of the examination. If not embraced within sections 3 and 4 of this rule they shall also file within the same period the affidavit and certificate required by section 5, and if embraced within sections 3 and 4 they shall exhibit a license evidencing the fact of their admission to practice, satisfactory evidence that the same has not been revoked, and certificates as to their professional standing. Applicants shall also file at the same time their own affidavits as to their age, residence, and citizenship.

Sec. 8. Notice of applications. –  Notice of applications for admission shall be published by the clerk of the Supreme Court in newspapers published in Pilipino, English and Spanish, for at least ten (10) days before the beginning of the examination.

Sec. 9. Examination; subjects. –  Applicants, not otherwise provided for in sections 3 and 4 of this rule, shall be subjected to examinations in the following subjects: Civil Law; Labor and Social Legislation; Mercantile Law; Criminal Law; Political Law (Constitutional Law, Public Corporations, and Public Officers); International Law (Private and Public); Taxation; Remedial Law (Civil Procedure, Criminal Procedure, and Evidence); Legal Ethics and Practical Exercises (in Pleading and Conveyancing).

Sec. 10. Bar examination, by questions and answers, and in writing. –  Persons taking the examination shall not bring papers, books or notes into the examination rooms. The questions shall be the same for all examinees and a copy thereof, in English or Spanish, shall be given to each examinee. Examinees shall answer the questions personally without help from anyone.

Upon verified application made by an examinee stating that his penmanship is so poor that it will be difficult to read his answers without much loss of time, the Supreme Court may allow such examinee to use a typewriter in answering the questions. Only noiseless typewriters shall be allowed to be used.

The committee of bar examiners shall take such precautions as are necessary to prevent the substitution of papers or commission of other frauds. Examinees shall not place their names on the examination papers. No oral examination shall be given.

Sec. 11. Annual examination. –  Examinations for admission to the bar of the Philippines shall take place annually in the City of Manila. They shall be held in four days to be designated by the chairman of the committee on bar examiners. The subjects shall be distributed as follows: First day: Political and International Law (morning) and Labor and Social Legislation (afternoon); Second day: Civil Law (morning) and Taxation (afternoon); Third day: Mercantile Law (morning) and Criminal Law (afternoon); Fourth day: Remedial Law (morning) and Legal Ethics and Practical Exercises (afternoon).

Sec. 12. Committee of examiners. –  Examinations shall be conducted by a committee of bar examiners to be appointed by the Supreme Court. This committee shall be composed of a Justice of the Supreme Court, who shall act as chairman, and who shall be designated by the court to serve for one year, and eight members of the bar of the Philippines, who shall hold office for a period of one year. The names of the members of this committee shall be published in each volume of the official reports.

Sec. 13. Disciplinary measures. –  No candidate shall endeavor to influence any member of the committee, and during examination the candidates shall not communicate with each other nor shall they give or receive any assistance. The candidate who violates this provision, or any other provision of this rule, shall be barred from the examination, and the same to count as a failure against him, and further disciplinary action, including permanent disqualification, may be taken in the discretion of the court.

Sec. 14. Passing average. –  In order that a candidate may be deemed to have passed his examinations successfully, he must have obtained a general average of 75 per cent in all subjects, without falling below 50 per cent in any subject. In determining the average, the subjects in the examination shall be given the following relative weights: Civil Law, 15 per cent; Labor and Social Legislation, 10 per cent; Mercantile Law, 15 per cent; Criminal Law; 10 per cent; Political and International Law, 15 per cent; Taxation, 10 per cent; Remedial Law, 20 per cent; Legal Ethics and Practical Exercises, 5 per cent.

Sec. 15. Report of the committee; filing of examination papers. –  Not later than February 15th after the examination, or as soon thereafter as may be practicable, the committee shall file its reports on the result of such examination. The examination papers and notes of the committee shall be fixed with the clerk and may there be examined by the parties in interest, after the court has approved the report.

Sec. 16. Failing candidates to take review course. –  Candidates who have failed the bar examinations for three times shall be disqualified from taking another examination unless they show to the satisfaction of the court that they have enrolled in and passed regular fourth year review classes as well as attended a pre-bar review course in a recognized law school.

The professors of the individual review subjects attended by the candidates under this rule shall certify under oath that the candidates have regularly attended classes and passed the subjects under the same conditions as ordinary students and the ratings obtained by them in the particular subject.

Sec. 17. Admission and oath of successful applicants. –  An applicant who has passed the required examination, or has been otherwise found to be entitled to admission to the bar, shall take and subscribe before the Supreme Court the corresponding oath of office.

Sec. 18. Certificate. –  The Supreme Court shall thereupon admit the applicant as a member of the bar for all the courts of the Philippines, and shall direct an order to be entered to that effect upon its records, and that a certificate of such record be given to him by the clerk of court, which certificate shall be his authority to practice.

Sec. 19. Attorneys’ roll. – The clerk of the Supreme Court shall keep a roll of all attorneys admitted to practice, which roll shall be signed by the person admitted when he receives his certificate.

Sec. 20. Duties of attorneys. –  It is the duty of an attorney:
(a) To maintain allegiance to the Republic of the Philippines and to support the Constitution and obey the laws of the Philippines;

(b) To observe and maintain the respect due to the courts of justice and judicial officers;

(c) To counsel or maintain such actions or proceedings only as appear to him to be just, and such defenses only as he believes to be honestly debatable under the law;

(d) To employ, for the purpose of maintaining the causes confided to him, such means only as are consistent with truth and honor, and never seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law;

(e) To maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his client’s business except from him or with his knowledge and approval;

(f) To abstain from all offensive personality and to advance no fact prejudicial to the honor or reputation of a party or witness, unless required by the justice of the cause with which he is charged;

(g) Not to encourage either the commencement or the continuance of an action or proceeding, or delay any man’s cause, from any corrupt motive or interest;

(h) Never to reject, for any consideration personal to himself, the cause of the defenseless or oppressed;

(i) In the defense of a person accused of crime, by all fair and honorable means, regardless of his personal opinion as to the guilt of the accused, to present every defense that the law permits, to the end that no person may be deprived of life or liberty, but by due process of law.

Sec. 21. Authority of attorney to appear. –  An attorney is presumed to be properly authorized to represent any cause in which he appears, and no written power of attorney is required to authorize him to appear in court for his client, but the presiding judge may, on motion of either party and on reasonable grounds therefor being shown, require any attorney who assumes the right to appear in a case to produce or prove the authority under which he appears, and to disclose, whenever pertinent to any issue, the name of the person who employed him, and may thereupon make such order as justice requires. An attorney wilfully appearing in court for a person without being employed, unless by leave of the court, may be punished for contempt as an officer of the court who has misbehaved in his official transactions.

Sec. 22. Attorney who appears in lower court presumed to represent client on appeal. –  An attorney who appears de parte in a case before a lower court shall be presumed to continue representing his client on appeal, unless he files a formal petition withdrawing his appearance in the appellate court.

Sec. 23. Authority of attorneys to bind clients. –  Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeals, and in all matters of ordinary judicial procedure. But they cannot, without special authority, compromise their client’s litigation, or receive anything in discharge of a client’s claim but the full amount in cash.

Sec. 24. Compensation of attorneys; agreement as to fees. –  An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable.

Sec. 25. Unlawful retention of client’s funds; contempt. – When an attorney unjustly retains in his hands money of his client after it has been demanded, he may be punished for contempt as an officer of the Court who has misbehaved in his official transactions; but proceedings under this section shall not be a bar to a criminal prosecution.

Sec. 26. Change of attorneys. –  An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party.

A client may at any time dismiss his attorney or substitute another in his place, but if the contract between client and attorney has been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled to recover from the client the full compensation stipulated in the contract. However, the attorney may, in the discretion of the court, intervene in the case to protect his rights. For the payment of his compensation the attorney shall have a lien upon all judgments for the payment of money, and executions issued in pursuance of such judgment, rendered in the case wherein his services had been retained by the client.

Sec. 27. Attorneys removed or suspended by Supreme Court on what grounds. –  A member of the bar may be removed or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a wilfull disobedience of any lawful order of a superior court, or for corruptly or wilfully appearing as an attorney for a party to a case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice.

Sec. 28. Suspension of attorney by the Court of Appeals or a Court of First Instance. –  The Court of Appeals or a Court of First Instance may suspend an attorney from practice for any of the causes named in the last preceding section, and after such suspension such attorney shall not practice his profession until further action of the Supreme Court in the premises.

Sec. 29. Upon suspension by Court of Appeals or Court of First Instance, further proceedings in Supreme Court. – Upon such suspension, the Court of Appeals or the Court of First Instance shall forthwith transmit to the Supreme Court a certified copy of the order or suspension and a full statement of the facts upon which the same was based. Upon the receipt of such certified copy and statement, the Supreme Court shall make full investigation of the facts involved and make such order revoking or extending the suspension, or removing the attorney from his office as such, as the facts warrant.

Sec. 30. Attorney to be heard before removal or suspension. –  No attorney shall be removed or suspended from the practice of his profession, until he has had full opportunity upon reasonable notice to answer the charges against him, to produce witnesses in his own behalf, and to be heard by himself or counsel. But if upon reasonable notice he fails to appear and answer the accusation, the court may proceed to determine the matter ex parte.

Sec. 31. Attorneys for destitute litigants. –  A court may assign an attorney to render professional aid free of charge to any party in a case, if upon investigation it appears that the party is destitute and unable to employ an attorney, and that the services of counsel are necessary to secure the ends of justice and to protect the rights of the party. It shall be the duty of the attorney so assigned to render the required service, unless he is excused therefrom by the court for sufficient cause shown.

Sec. 32. Compensation for attorneys de oficio. –  Subject to availability of funds as may be provided by law the court may, in its discretion, order an attorney employed as counsel de oficio to be compensated in such sum as the court may fix in accordance with section 24 of this rule. Whenever such compensation is allowed, it shall not be less than thirty pesos (P30.00) in any case, nor more than the following amounts: (1) Fifty pesos (P50.00) in light felonies; (2) One hundred pesos (P100.00) in less grave felonies; (3) Two hundred pesos (P200.00) in grave felonies other than capital offenses; (4) Five hundred pesos (P500.00) in capital offenses.

Sec. 33. Standing in court of persons authorized to appear for Government. – Any official or other person appointed or designated in accordance with law to appear for the Government of the Philippines shall have all the rights of a duly authorized member of the bar to appear in any case in which said government has an interest direct or indirect.

Sec. 34. By whom litigation conducted. –  In the court of a justice of the peace a party may conduct his litigation in person, with the aid of an agent or friend appointed by him for that purpose, or with the aid of an attorney. In any other court, a party may conduct his litigation personally or by aid of an attorney, and his appearance must be either personal or by a duly authorized member of the bar.

Sec. 35. Certain attorneys not to practice. –  No judge or other official or employee of the superior courts or of the Office of the Solicitor General, shall engage in private practice as a member of the bar or give professional advice to clients.

Sec. 36. Amicus curiae. –  The court may, in special cases, and upon proper application, permit the appearance, as amici curiae, of those lawyers who in its opinion can help in the disposition of the matter before it; or it may, on its own initiative, invite prominent attorneys to appear as amici curiae in such special cases.
Sec. 37. Attorneys’ liens. –  An attorney shall have a lien upon the funds, documents and papers of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements.