Doing Business in the Philippines

Philippines Business Registration
Ayala Avenue Makati City Central Business District

Dayanan Business Consultancy assists individuals and foreign companies of all sizes in setting up their business operations in the Philippines. Doing business in the Philippines has many advantages as well as a large amount red tape.

Once we know your goals and the kind of business you want to launch in the Philippines,  DBC will recommend the best structure for your KPO, Call Center, IT or Web Development Outsourcing, Back Office Operation or Import and Export. DBC will advise you how to register your investment with PEZA or BOI to obtain tax incentives.

Get the Leading Business Process Outsourcing in the Philippines

We will also ensure that you will get the best Business Process Outsourcing in the Philippines. BPO is a cost-saving measure which is a method of subcontracting business-operations to a third party. One category of BPO is outsourcing of back office services, and Dayanan can help you starting from your business registration in the country.

DBC’s knowledge of the Philippine’s business environment and government agencies allows DBC’s clients to reach their objectives quickly. Personalized service is our commitment, whether your intention is to establish a:

Once the SEC has issued your License to Transact or Certificate of Incorporation, DBC will still be there to help get local business permits and licenses and register with other government agencies when necessary.

Other services DBC provides Business Development and Marketing, Business Plans, Visa Processing, Bookkeeping and Payroll.

Your Business Registration in the Philippines will be done quickly and professionally through Dayanan Business Consulting services.

Contact the DBC Team now for a free consultation.

BPO Philippines BOI Registration

Tax incentives offered by the BOI to BPOs are another enticement to register a business in the Philippines. The Philippine government allows Business Process Outsourcing companies to file an application with the Board of Investments to register for tax incentives.

Multiple tax and non tax incentives are given to businesses in the IT / BPO sector. The major benefits are a four year income tax holiday (normal corporate income tax is 30%), exemption from 12% VAT, duty free importation of capital equipment and special visas for foreign employees.

BOI registration is comparable to dealing with any other Philippines government agency.

BPO Philippines BOI Registration

BPO’s in general qualify for BOI incentives. Only a domestic corporation may apply for incentives, a foreign branch office may not register with the Board of Investments. If the proposed activity is not listed in the BOI Investment Priority Plans (IPP), the main prerequisite is that the applicant export at least 50% of their products/services if Filipino owned and export at least 70% if foreign owned. Call centers and other IT related outsourcing business are required to invest a minimum of USD 2,500.00 per seat. As any BPO consultant knows, USD 2,500 is a small amount once you start adding up what is needed for an IT startup.

Documents to be Submitted to the BOI

1. Properly accomplished Application Form

2. Project Study/Project Report

3. Copy of the DTI Reg. (for sole proprietor) or SEC Cert. of Reg., Articles of Incorporation/Partnership, and By-laws (for partnerships and corporations)

4. Board Resolution authorizing an officer to transact, execute, and sign in behalf of the applicant enterprise

5. Proof of publication of the “Notice of the filing of Application”

6. AFS and ITR for the past 3 years or for the period the applicant has been in operation if less than 3 years (for existing firms); or Sworn Statement of Assets & Liabilities of Major Stockholders (for new corporations)

7. Other documents that may be required by the specific activity in the IPP

BPO Philippines BOI Registration
BPO Philippines BOI Registration

 BOI Registration Process

1. Checklisting of application document

2. Publication of the NOTICE

2. Official filing

3. Evaluation of application / project

4. Presentation to the ManCom/Board for decision

5. Notify applicant of Board action

6. Compliance with the pre-registration requirements

7. Issuance of Certificate of Registration

DBC is here to assist you with BPO, IT outsourcing, call center registration with the BOI. And any other Philippines Business Registration Contact us now

Doing Business in the Philippines Made Easy

Dayanan Business Consultancy helps foreign companies get their business up and running in the Philippines.

Besides being known for the hospitality and warmth of its people, the Philippines has a promising culture. A developing country that boasts of fluent English speakers, this country is attracting foreign investors for its industrial competitiveness.

Highlighting how doing business in the Philippines can be advantageous but prone to red tape, Dayanan Business Consultancy or DBC assists individuals and foreign companies of all sizes in setting up their business operations in the Philippines.

Through its website, DayananConsulting.com, DBC guarantees to help customers by preparing business plans and obtaining business permits on their behalf. In addition, DBC can provide services for feasibility studies, business plans and real estate studies and consultancy.

Business Registration Incorporation Philippines SEC

Dayanan Business Consultancy explains that its knowledge of the Philippines’ business environment and government agencies allows its clients to reach objectives quickly. The company commits to personalized service for businesses seeking to establish in the Philippines Foreign Ownership of Corporation, a 100% Foreign Owned Domestic Corporation (subsidiary), Representative Office, Foreign Branch Office, Partnership, Sole Proprietorship or Regional Headquarters.

DBC, as a business consultant in the Philippines, will recommend the best structure for BPO, KPO, Call Center, IT or Web Development Outsourcing, Back Office Operation or Import Export. DayananConsulting.com will also advise businesses on how to register their investments with the Philippine Export Zone Authority or the Board of Investments to obtain tax incentives.

Once the Securities and Exchange Commission has issued a License to Transact or Certificate of Incorporation for a business, DayananConsulting.com will still be there to help get local business permits and licenses and register with other government agencies as may be necessary. Other services that DBC provides include Business Development and Marketing, Business Plans, VISA Processing, Bookkeeping and Payroll. The DBC Team also offers free consultation services.

Benefit from Dayanan Business Consulting services to register and obtain Philippine business permits quickly and professionally. Check out https://www.dayananconsulting.com now and learn how business can start operating in the country in no time.

About: Dayanan business consultancy helps foreign companies get their business up and running in the Philippines. They can help customer obtaining business permits and prepares business plans. In addition, the company can provide services for feasibility studies, business plans and real estate studies and consultancy.

Company Contact Information
DayananConsulting.com
Public Relations
Unit 12C, Valero Towers 122 Valero St. Salcedo Village, Makati, Philippines
1227
Phone : +639178125014

Philippine REITs set to take off in 2010

By Julius Guevara

The Philippines joins the list of Asian countries that have recently introduced the real estate investment trust as a viable investment vehicle. The Philippine REIT Summit held in Manila last July featured local and multinational fund managers such as ING, RREEF, Citibank and First Metro as well as local developers Ayala Land, Robinsons Land, SM Prime and regional REIT players Axis REIT and Ascendas as they discussed how the new Philippine REIT law could be best implemented to the Philippine market.

“REITs (in the Philippines) is a financial product whose time has come,” said Francisco Sebastian, President of First Metro Investment Corp. Pointing out the lack of good investment options and the Filipinos’ high savings rate of 30%, Mr. Sebastian surmised that REITs will enable savings to be channeled into productive economic capital.  Paul Joseph Garcia, Chief Investment Officer of ING Philippines, also added that “as investment managers, we are actually very excited for this asset class. The Philippine property market is in the process of undergoing a significant breakout… property prices have not even breached the previous all-time highs that we’ve seen in the ’90s prior to the Asian financial crisis, and for me that’s a good sign.”

Local developers also welcomed the introduction of REITs to the country. Frederick Go, President and COO of Robinsons Land commented that “(REITs) are a very efficient way for developers like ourselves to raise capital, and most of the funds that we generate will be employed back into developing more properties.”

Fueled by the tremendous growth in business process outsourcing (BPO) industry as well as remittances from 3 million overseas Filipino workers, the Philippine real estate industry has been on an upswing for the past few years. While the Philippines was also affected by the global financial crisis in 2008, the real estate industry and the economy as a whole have rebounded strongly. “The Philippines is a very defensive market,” noted David Fan, Managing Director of CBRE Investors Japan. “People continued to shop, rents were stable, there was a little bit of correction with housing prices, but now things are looking quite positive.”

Philippine REIT (P-REIT) proponents are counting on these strengths to further propel the REIT market in the country. The Philippines is second only to India in terms of providing offshore BPO-related services worldwide, and would continue to provide steady demand for office space. In 2009, revenues for BPO-related services amounted to US$7.2 Billion, an increase of almost 20% from the previous year. Because of strong growth, BPO demand for office space resulted in single digit vacancy rates for Metro Manila’s CBD’s during 2004 to 2007.

The growing number of Overseas Filipino Workers (OFWs) is also propping up demand for real estate-related products, particularly in housing and retail. As these OFWs send money back home to their families, the funds are invested in condominiums or used to purchase consumer goods.  Eight million Filipinos are currently working abroad, with an additional 3,000 leaving the Philippines daily for jobs abroad. Total remittances from OFWs amounted to US$ 17.3 Billion in 2009, and are expected to increase by 6% in 2010.

Philippine REIT Structure

The Philippine REIT Act was introduced in December 2009, and implementing regulations are currently being drafted. In order to achieve REIT status, at least 75% of the entity’s income should come from income-producing real estate.  As in other countries, the P-REIT allocates 90% of its distributable income as dividend to its investors. The company should also be listed on the Philippine Stock Exchange with a minimum of 1,000 public shareholders holding at least 50 shares each and who in aggregate own at least one-third of the outstanding capital stock of the REIT. While P-REITs are technically considered as corporations, they are referred to as real estate investment trusts in order to adhere to internationally accepted definitions.  Since the REIT operates under the Corporation Code, it is still subject to income taxes but is not subject to the minimum income tax of 2% of gross income. Other transactions taxes are either reduced or waived.

Furthermore, P-REITs are modeled after other REITs in the region, following an externally advised structure which requires the services of an independent fund manager and property manager to ensure transparency and fulfillment of fiduciary duties to the REIT shareholders. The fund and property managers can charge up to one percent each of the REIT’s net asset value as management fees.

One limitation that may prevent the growth of the P-REIT industry is the implementation of the limitations on foreign ownership of property to only 40%. Another possible setback is that the P-REIT is not allowed to develop property unless it plans to hold the property for at least two years after completion. Furthermore, the Bureau of Internal Revenue still has to come up with implementing rules and regulations, and has appealed for some revisions to the REIT law that would balance their tax revenues and REIT profitability.

Opportunities for P-REITs
Most of the local developers opined that P-REITs would first be introduced in the retail sector. Mr. Go of Robinsons Land indicated that they are preparing for retail REIT issuances “primarily because they have been the most stable, the most consistent revenue generators of the company in the last two decades.” Jaime Ysmael, Chief Financial Officer of Ayala Land, also pointed out that “the Philippines is a consumption-led economy,” with personal consumption expenditure comprising over 70% of the local GDP. He added that half of the US$17.3 Billion in remittances from overseas Filipinos benefits the real estate industry. “’Malling’ is a way of life for Filipino families… Manila’s large malls have average foot traffic of 200 to 500 thousand visitors a day.” This translates to strong demand for retail, which has had an annual growth rate of 10% for the past 10 years and has had occupancy rates of more than 90%. Rental rates have also increased by 4% annually since 1996.

The participants also pointed out opportunities in the residential sector, with the country’s burgeoning population growth and a housing backlog of 2 million housing units. Increasing purchasing power due to OFW remittances would also support demand for housing. Similarly, representatives from CBRE and Ascendas pointed out that the increased demand for consumer goods bodes well for the industrial sector, particularly in warehousing and logistics. Opportunities also exist for BPO-related office facilities going into a REIT structure, as demand continues to grow. Lastly, there are opportunities for infrastructure funds to participate in public-private partnerships with the Philippine government through the REIT structure.

“I think the launch of the REIT in the Philippines is a tremendous first step,” said Ascendas South East Asia’s Loh Wai Keong as he shared his experiences in the Singapore market. “The next step would be to see how the industry would help grow the quality of the fund managers and asset managers. Once you launch your REIT, most will be first attracted to the yield, but at the later stage when your REIT is traded on the stock market, the investors will reward you with good yield compression if you can show a good track record of growth in your revenues. That gives you a very cheap source of equity for you to raise more funds, and you can go on to develop new property. That’s a very important virtuous cycle that you need to hold on to.”

Branch Office Registration

Philippines Branch Office

One of the ways for a foreign corporation to start business in the Philippines is to register a branch office. A Philippines branch office may start its operations as soon as the SEC has issued its license to transact business.

SEC Branch Office Registration Process

1 – Name Verification Slip (The SEC will conduct a name search to check if the corporate name has any similitude with a corporation already registered with the SEC).

2 – Authenticated copy of Board resolution authorizing the establishment of an office in the Philippines: designating the resident agent to whom summons and other legal processes may be served in behalf of the foreign corporation and stipulating that in the absence of such agent or upon cessation of its business in the Philippines, any summon of legal processes may be served to SEC as if the same is made upon the corporation at its home office.

3 – Financial statements

A. For those whose home country requires audited financial statements, the applicant shall submit the audited financial statements (AFS) as of date not exceeding one (1) year immediately prior to the filing of the application;

If the date of the AFS exceeds the one-year requirement, the following shall be submitted:
i. Audited financial statements that are available as of date of filing of the application; and
ii. Unaudited financial statements (UFS) as of date not exceeding one (1) year immediately prior to the filing of the application.

B. For those whose home country does not require audited financial statements, the applicant shall submit the unaudited financial statements (UFS) as of a date not exceeding one (1) year immediately prior to the filing of the application provided that the UFS shall be accompanied by a Certification signed under oath by an officer of a responsible regulatory institution or by the applicant’s legal counsel that the applicant is not required to prepare and submit audited financial statements, with a citation of the law or regulation on which it is based.

The aforementioned AFS and UFS must be signed under oath by the president or any other person authorized by the corporation. No authentication shall be necessary if the signatory to the said financial statements is the same as that in the corporation’s application.

Pursuant to Section 125 of the Corporation Code, the applicant’s financial statements must show that it is solvent and in sound financial condition.

4 – Certified copies of the Articles of Incorporation/By-laws/Partnership/Memorandum and Articles of Association with an English translation thereof if in a foreign language.

5 – Proof of Inward Remittance such as bank certificate of inward remittance or
credit advices. *

6 – Resident Agent’s acceptance of appointment (not necessary if agent is the signatory in the application form.

7 – Copy of passports, names and addresses of the present Corporate Directors and Officers with English translation.

Advise when setting up a branch office:

All documents must be in English and authenticated by the Philippines Embassy/Consulate of the home country.

* Minimum inward remittance of USD 200,000.00 as capital investment. Branches which use advanced technology or employ a minimum of 50 direct employees may be allowed a reduced paid-in capital of USD 100,000.00. Companies which export more than 60% of their products or services may apply for an exemption.

The SEC requires that within sixty days from the issuance of the license to transact business in the Philippines a foreign corporation (except foreign banking or Insurance Corporation) is obligated to deposit with the SEC satisfactory securities with an actual market value of P100,000 in order to secure present and future creditors of the licensee in the Philippines. That within six (6) months after each fiscal year of the licensee, the Securities and Exchange Commission shall require the licensee to deposit additional securities equivalent in actual market value to two (2%) percent of the amount by which the licensee’s gross income for that fiscal year exceeds five million (P5,000,000.00) pesos. (Corporation Code of the Philippines Section 126)

We recommend that the inward remittance be registered with the Central Bank of the Philippines, Bangko Sentral ng Pilipinas.

A foreign corporation transacting business in the Philippines without having been licensed by the SEC does not have the right to file any action, suit or proceedings in Philippine courts of law.

Eligible companies may apply for Philippine tax incentives by registering with the PEZA or BOI.

After the SEC has issued the License to Transact Dayanan Business Consultancy will assist you in obtaining local business permits.

The corporation code of the Philippines in Title XV gives the definition and rights of a foreign corporation in the Philippines to conduct business.