Canadian coming Philippines wanting ideas for investing

LaoAnita wrote:

don't you want to do business in cebu?
in lapulapu city, there are many foreigners with filipina girl friend doing bar business near the seasides.
doing financial investment  in the philippines is good too
if you are interested,
please do let your girl friend contact me.
i can give her moe ideas.
am an accredited license agent

Wow… I think ALL expats need to review and perhaps calibrate certain key words here with ANY local person offering assistance/help/services.

Key words:

Ownership
Doing Business,
Investment
Accredited (by what authority)
Licensed Agent

Regarding properly documented "Accredited" and or "Investment agents" -  Since this topic is on investing in the Philippines, I have made the assumption that locals offering services here are offering investment connected services with investment connected Philippine credentials.  One must be very careful with what organization is producing accredited, licensed agents for investments here in the PI.  Review RA 7042 and pay attention to Rule XVIII Section 1 on fines.

Regarding owning a bar - For any person wanting to follow the laws and be properly protected under said laws, read and understand EO 98 "Foreign Investment Act of 1991" as amended in 2012 & 2014.  Then pay close attention to the Negative A list "Foreign Ownership is Limited…"  and  "No Foreign Equity", Section 3 ("Retail trade enterprises with a paid-up capital of less than US$2,500,000.00")…   This still means any foreigner that does not put down $2.5 Mil, can't have any % Foreign ownership.  I would be shocked if any foreigners in Cebu or any other location are "Legal Owner" of such bars.  Anything less than documented ownership is pure "wealth/asset transfer" and not a proper investment, IMHO.

Next, spend time reviewing RA 8762 to see how these Rules and Regulations are implemented on Foreigners. 

The rules and laws are not getting more pro-foreigner.  A news article by Philippine News Agency and InterAksyon.com   Stated, "MANILA, Philippines - President Benigno Aquino III has expanded the list of investment areas and economic activities that prohibit the participation of foreign investors under the 9th Regular Foreign Investment Negative List.

The said list enumerates the industries and business activities that are open to Filipino businessmen, and defines the extent of participation of foreign investors in areas allowed by specific laws and the Constitution."

There are many laws and rules and as a partnership/sole proprietorship/or corporation with a foreigner, many can be enforced (at will) as soon as any person complains or there is a family issue.

Wow, doing business in a third world country against competition that is local and would probably have the whole family working extreme long hours, in order to just survive....

I have spent most of my life in banking, here in Canada and New York City, and couldn't even estimate the number of people whom have come looking for advise or credit for their dream business. Most, I repeat, the vast majority. lose every penny they ever had thinking they were going to succeed in their dream business. Wrong location, too much competition, poor accounting skills, no idea how to market their business or under estimating their long term needs and running out of capital. I could go on for hours talking about examples of what could and will go wrong...

On the other hand, maybe you have a history of successful business ventures?

9 out of 10 new restaurants / businesses close in the first 6 months... and there isn't any corrupt official  demanding thousands of pesos for special fire extinguishers that you need, that are only available from their first cousin... You might have that type of cost of doing business over there....

Sorry, just telling you how I see it after a lifetime in corporate/commercial banking... yet you never know,  people do win the lottery everyday.

Good luck, but one last bit of stupid advice.... don't ask other people for advise about where to invest your money, because if you don't know, no one is going to tell you out of the goodness of their heart.... Everyone else (excepting Mother Teresa) is just looking at how much they can steal/get from you, because charity starts at home no matter where you live in the world.

Four years left to retirement in Aklan and traveling the world..... I can hardly wait.......

if you have the money its easy to put up a business in Philippines.  but you need to reconsider your location, line of business and target market.

spasquier wrote:

Unless you have a SRRV visa, or legal resident status in the Philippines, DO NOT INVEST IN THE PHILIPPINES.
It's a long process. Take your time, and NEVER put any investment in the name of your Filipina wife/finance/girlfriend.
She will take all eventually.

for business registrations and application of income tax holidays, just send me a private message. thanks.

Hi,

The investment of status in the Philippines at present are properties where you could buy a property and have it rented for short term (hotel-like) or long-term.

The investment for properties are open not just for Philippine nationalities but also open to other nationalities. But you have to be very careful, you should check and inquire from a known developer like Robinsons.

We have known a lot of expats who bought a condominium (flat unit) and now they are enjoying their profits because the property they bought is in the business center area where most of the call centers are in the area, government offices and schools.

If you are interested please email me at:   romelle.guidion@gmail.com

There is a very informative CNBC article on this topic that is worth a detailed review for any would be 2015 investors in Philippine Condos in NCR. 

Key points are:

- Watch Data from the Bank for International Settlements (BIS).
- The central bank, Bangko Sentral ng Pilipinas (BSP), has delayed the 2014 launch of a property price index until 2015.
- Expected residential price growth of 5 percent in 2015, similar to 2014.

Source:  cnbc.com/2015/01/05/is-philippine-property-getting-bubbly.html

One must also remember the ever present "Transaction" costs in the PI. 

"The total cost of property purchase ranges from 13.25% to 16.25% of the property value, inclusive of Capital Gains Tax (6%) and Real Estate Agent's Fee (3% to 5%). It takes over 40 days to complete the eight procedures needed to register a property in the Philippines. Alway be careful when buying unfinished buildings or condominiums."

I wish to meet you when your here.

Don't is my advise.   It must be over 50% Philippine owned.   That leaves you wide open to loose all.   If you do start one and do good.  The next month there will be a new place  across the street doing the same as you.  You can not compete as they will hire family to work harder & cheaper than you can hire help.  Leave your money at home.   Invest there. Live of that.    Lots try here 95% fail.  There are a few franchises open from Canada you could try.  Introduce new products out of Canada.  To the Philippines. Canadian based but you here.

professor cebu wrote:

fyi. foreigners may open up a business here in the philippines with 100% ownership except for nationalised industry as defined in fia. so pls dont be misguided by ignorant people making comments about bad investment or shared investment in the philippines. they are just naive and nuisance.

Is this a naive statement about foreign ownership being a problem?+

RA7042 "Foreign Investments Act of 1991".

Section 7. Foreign Investments in Domestic Market Enterprises. - Non-Philippine nationals may own up to one hundred percent (100%) of domestic market enterprises unless foreign ownership therein is prohibited or limited by existing law or the Foreign Investment Negative List under Section 8 hereof.

Section 8b of RA7042: (Foreign Investment Negative List).
Small and medium-sized domestic market enterprises with paid-in equity capital less than the equivalent of five hundred thousand US dollars (US$500,000) are reserved to Philippine nationals,

So, if you start a business with "Foreign Investment" of over $500,000 you can own 100%

Section 3c
c) The term "foreign investment" shall mean as equity investment made by a non-Philippine national in the form of foreign exchange and/or other assets actually transferred to the Philippines and duly registered with the Central Bank which shall assess and appraise the value of such assets other than foreign exchange;

Hello everyone sorry for sending message here. If there expats in subic or bagiou Or tagaytay olongapo needs a helper please call or sms me my mobile *** sorry and thank you. God bless.you all MABUHAY.

you got it right. there are also other exceptions. you may want to check peza law as well.

ABCDiamond wrote:

professor cebu wrote:

fyi. foreigners may open up a business here in the philippines with 100% ownership except for nationalised industry as defined in fia. so pls dont be misguided by ignorant people making comments about bad investment or shared investment in the philippines. they are just naive and nuisance.

Is this a naive statement about foreign ownership being a problem?+

RA7042 "Foreign Investments Act of 1991".

Section 7. Foreign Investments in Domestic Market Enterprises. - Non-Philippine nationals may own up to one hundred percent (100%) of domestic market enterprises unless foreign ownership therein is prohibited or limited by existing law or the Foreign Investment Negative List under Section 8 hereof.

Section 8b of RA7042: (Foreign Investment Negative List).
Small and medium-sized domestic market enterprises with paid-in equity capital less than the equivalent of five hundred thousand US dollars (US$500,000) are reserved to Philippine nationals,

So, if you start a business with "Foreign Investment" of over $500,000 you can own 100%

Section 3c
c) The term "foreign investment" shall mean as equity investment made by a non-Philippine national in the form of foreign exchange and/or other assets actually transferred to the Philippines and duly registered with the Central Bank which shall assess and appraise the value of such assets other than foreign exchange;

and im saying it based on my experience not just mere opinions or misguided information. have helped a few non-phil nationals open up their businesses here in cebu. mostly those engage in bpo or ipo business enjoying peza incentives.

***

This is really true. And FYI, the Philippine economy is growing and it's a high time to invest.

professor cebu wrote:

you got it right. there are also other exceptions. you may want to check peza law as well.

So in brief, when you say that foreigners may open up a business here in the philippines with 100% ownership, you mean IF they bring in a minimum of (US$500,000) , but only 40% ownership if it is less than that.

The PEZA law is talking about "special economic zones" being set up, so again, not a small business I assume.

PEZA (Department of Trade and Industry) is the Philippine government agency that oversees and administers incentives to developers/operators of and locators in world-class, ready-to-occupy, environment-friendly, secured and competitively priced Special Economic Zone

professor cebu wrote:

fyi. foreigners may open up a business here in the philippines with 100% ownership except for nationalised industry as defined in fia. so pls dont be misguided by ignorant people making comments about bad investment or shared investment in the philippines. they are just naive and nuisance.

you got it right for FIA. but for PEZA law, there are other considerations other than the amount itself. the law speaks for itself, so i do not need to eloborate it further you can check the law

ABCDiamond wrote:

professor cebu wrote:

you got it right. there are also other exceptions. you may want to check peza law as well.

So in brief, when you say that foreigners may open up a business here in the philippines with 100% ownership, you mean IF they bring in a minimum of (US$500,000) , but only 40% ownership if it is less than that.

The PEZA law is talking about "special economic zones" being set up, so again, not a small business I assume.

PEZA (Department of Trade and Industry) is the Philippine government agency that oversees and administers incentives to developers/operators of and locators in world-class, ready-to-occupy, environment-friendly, secured and competitively priced Special Economic Zone

professor cebu wrote:

fyi. foreigners may open up a business here in the philippines with 100% ownership except for nationalised industry as defined in fia. so pls dont be misguided by ignorant people making comments about bad investment or shared investment in the philippines. they are just naive and nuisance.

professor cebu wrote:

the law speaks for itself, so i do not need to eloborate it further you can check the law

Unfortunately, the law is not clear enough; as you yourself say, there are many naive and ignorant people who are making comments. Maybe as they read contradictory statements.

Your own statement of "foreigners may open up a business here in the philippines with 100% ownership except for nationalised industry as defined in fia" also seems open to question, as not ALL foreigners can do that, according to some aspects of the laws, or can they ?

A simple question or three would be:

Can a foreigner own Sari Sari store in his name ?
Can a foreigner own a MacDonald store in his name ?
Can a foreigner own a Motorcycle store in his name ?

ie: Are these classed as Nationalised industries and only for Filipino ownership.

Is it easy for anyone to answer these questions?

ABCDiamond wrote:

professor cebu wrote:

the law speaks for itself, so i do not need to eloborate it further you can check the law

……..

A simple question or three would be:

Can a foreigner own Sari Sari store in his name ?
Can a foreigner own a MacDonald store in his name ?
Can a foreigner own a Motorcycle store in his name ?

All three of your questions come under the category of "Retail trade enterprises" vs. "Domestic market enterprise".  Assuming you intend to follow the laws as written (not always as enforced), my response follows:

1.  Can a foreigner own Sari Sari store in his name ? 

Answer: Yes, only with a paid-up capital investment of at least $2.5M or more, since a Sari-Sari is under the category of "Retail trade enterprises".  If you do not pay the $2.5M, there is no Foreign Equity (ownership) allowed.

2.  Can a foreigner own a MacDonald store in his name ? 

Answer: Same answer as above.

3.  Can a foreigner own a Motorcycle store in his name ?   

Answer: Same answer as above.

I have never met a foreigner here in the PI that is willing to pay $2.5M or Php116,250,000 just to own & run a Sari-Sari, etc.

Also, a foreigner can not own any "Domestic market enterprise" with:

1.   Paid-in equity capital of less than the equivalent of US$200,000.
2.   Which involve advanced technology or employ at least fifty (50) direct employees with paid-in-equity capital of less than the equivalent of US$100,000.

I hope my response is very clear.  Best wishes.

Hi All,

i just wanted to give you my idea about the topic. 

on the topic of opening a business:

First ownership of a business can never be done as a foreigner in a sole proprietor formula in the Philippines.  Nor many other countries for that matter.   

If you want to have a full ownership, you need to have a corporation.  And in order to know if you are allowed to have 100 % you need to look at the type of business you want to have.  I put a link at the bottom where you can check the PDF file from the Philippine Government.   It includes the list (negative list) of skills and the amount of equity, ownership, you can have.

So in order to know if you can have or if you want to have 100 % ownership, you need to check first what you want to do and if what you want to do is inside the negative list.  Everything that is not in this list is, can be owned up to 100 % presuming you follow the regulations of the industries and corporate law.

To answer your question on opening a Sari Sari store, you can in theory own this 100%.  But why would you want to do this ?  You need to set up a corporation in order to do this and that is costly in set up and it would obligate you to file every month your withhold taxes, VAT declarations, income statement and yearly audited accounts.  The audited accounts  cost easily 30k peso per year to have that done.  a sari sari store  is  not making a lot of money

MacDonalds is a Franchise. You never really own that, right.   But you can own the corporation yes as long as you pay for the full ownership.     

But to open a single restaurant, the company requires that potential franchisees have liquid assets of at least $750,000.
Startup costs, which include construction and equipment expenses, average between $955,708 and $2.3 million, according to McDonald's. The total is determined by the geography and size of the restaurant, as well as by the selection of kitchen equipment, signage, style of decor, and landscaping.
Franchisees must pay 40% of the startup costs with cash and other non-borrowed resources, while the rest can be financed.
In addition to those costs, McDonald's charges a $45,000 franchisee fee and an ongoing monthly service fee equal to 4% of gross sales. Franchisees must also pay rent to the company, which is a percentage of monthly sales.

But that is just the franchise.  In order to set this up, you need to check the regulatory of opening a food business in the Philippines.  That goes without saying for the macdonald's example in the form of a corporation,  The requirements here are possible as 100 % foreign owned.  But it will cost you. 

A motorshop is the same issue as the sari sari store.  if you think that you need serious equity and investment, i would always recommend to form a corporation.  This business is possible to have 100% equity for as long as you pay up the corporate registration and have the amount of incorporators that you can trust. 

I have 3 companies myself and they are all 100 % foreign owned.  Have different activities.  So it is possible but every company has experienced different issues while opening it.  But i believe that it is not even so hard or complicated nor is it much different than in some other countries. 

here is a link to a document you should read. 

www.ey.com/Publication/vwLUAssets/Doing … ppines.pdf

this is from the government and explains all about doing business in the Philippines.  Including PEZA zones and tax holidays
My experience is that some government agencies are following the law to the letter but some are more flexible and would give you the permit as they need the tax very urgently.... getting the business permit can be a very challenging adventure as every district has its own rules and costs.

Is Philippines a good country to do business in ?  i have mixed feelings on this.  I always say yes for as long as your clients are foreigner clients, not expats,  or you are in the food business. 
So If you have a product where the clients needs to pay first before you give the product, like a hamburger, that may work. 
If you have to deal with local companies or local people as private clients giving them extension of payment, YOU ARE SCREWED !!!!  Why you think that soon also the electricity in the Philippines will become prepaid...

In a country where practically everyone expects everyone else to follow the rules except themselves, liability on say paying the bill is no longer existing.  And without a decent cash flow, doing business becomes very very hard to do.





On the subject of investment.

when someone is asking me if the Philippines is a good place to invest in, i always say  TAKE YOUR MONEY AND RUN!!! RUN LIKE HELL !!!


There are no good investments in the Philippines. 

Nor are their people you want to invest in.
Not in the housing nor in industries.  You have to deal with 99% of the time with scammers or dishonest people.

The investment is only good because they need your money.  and they need it badly !!   

Great business for sale that is doing well and is "marketleader"....  Seriously ??     

investing in a condo ?  it is very hard to get the monthly rent paid.  If you have a tenant, the condo will be more than often destroyed,  Count the investment to make it nice again......

than what is left ?  Investing in the person that comes to you with a great idea ??  Where he will bring in the expertese and you will bring in the cash ?  After 1 year he has your cash and his expertese. 

Keep your money hidden , is the best investment i can give anyone.  check out the country first and if after a couple of years you still like it, consider a business or investment. 



my personal thoughts


i have been in the Philippines for more than 2 decades. But my business clients are abroad. 
Philippines is a great country to go on holiday, or to retire if you are sure that you NEVER EVER have to deal with anyone of them.

i thought i might add that i have a retail chain in the philippines.  100 % foreign owned  and 10.000 pesos registered capital.

it is not even so difficult.

my other 2 companies are in captive shared and branch offices and also 100 % foreing owned


it just requires some creativity

they are all under the negative list. just to quote the pertinent portion of RA 7042, to wit:

Section 8. List of Investment Areas Reserved to Philippine Nationals (Foreign Investment Negative List). - The Foreign Investment Negative List shall have three (3) component lists: A, B, and C:

xxxxx     xxxx     xxxx

b) List B shall contain the areas of activities and enterprises pursuant to law:

xxxx     xxxx     xxxx

Small and medium-sized domestic market enterprises with paid-in equity capital less than the equivalent of five hundred thousand US dollars (US$500,000) are reserved to Philippine nationals, unless they involve advanced technology as determined by the Department of Science and Technology. Export enterprises which utilize raw materials from depleting natural resources, with paid-in equity capital of less than the equivalent of five hundred thousand US dollars (US$500,000) are likewise reserved to Philippine nationals.

xxxx      xxxx       xxxx


c) List C shall contain the areas of investment in which existing enterprises already serve adequately the needs of the economy and the consumer and do not require further foreign investments, as determined by NEDA applying the criteria provided in Section 9 of this Act, approved by the President and promulgated in a Presidential Proclamation.

xxxxx      xxxxx   xxxxx

ABCDiamond wrote:

professor cebu wrote:

the law speaks for itself, so i do not need to eloborate it further you can check the law

Unfortunately, the law is not clear enough; as you yourself say, there are many naive and ignorant people who are making comments. Maybe as they read contradictory statements.

Your own statement of "foreigners may open up a business here in the philippines with 100% ownership except for nationalised industry as defined in fia" also seems open to question, as not ALL foreigners can do that, according to some aspects of the laws, or can they ?

A simple question or three would be:

Can a foreigner own Sari Sari store in his name ?
Can a foreigner own a MacDonald store in his name ?
Can a foreigner own a Motorcycle store in his name ?

ie: Are these classed as Nationalised industries and only for Filipino ownership.

Is it easy for anyone to answer these questions?

for more info on the Negative List, kindly check this link provided by SEC: 

http://www.sec.gov.ph/download/Forms/fo … 202013.pdf

You could look into domains. The premium .ph domains are taken but a lot of niche sub level premium are still available.
There is obviously hard work needed to get traffic to site but also a fair amount of risk.

hi sir,,im also in bikol,,neigboring town of matnog..if you want bussiness there or in manila best is industrial related,,or in province.best there is livestock,you need to buy or your frnd a land u can put,,cow farming,goat or sheep,,

If you are looking for conservative investments, then I would look into leaving your money in Canada.  Of course aggressive investments are different.

I know as an Australian, that if I have my money invested in Australia that i have the following pro's and con's

Invested in Aust living in the Phil's (Conservative Investment)

Pro's

* A highly regulated market.
* Average return around 5%
* I know the ins and outs of the government rules
* The banking system is one of the most secure in the world.
* If i decide to leave the Philippines, then i simply up and move back to Aust. without having to withdraw money from the Philippine market.

Con's
* I pay 30% of tax on the returns
* Currency Fluctuation risk

Note: i do not have to pay tax in the Philippines on the money earned in Aust due to an agreement established between Aust and the Philippines



Investing in the Phil's

Pros
* Nil Currency risk

Con's
* Regulation is not has high as in Aust
* I have to pay tax in the Philippines


So for me i will leave my money in Australia

I have found that if you play cards with the locals for sentimo  I can often come out a head.  Once it moves into the piso range you will loose money every time.   About as far as I want to invest here.

Its difficult to follow the law in the Philippines. You cant trust many people in positions of power, its all about who you know and a pay off for help.My feeling is the Philippines does nt want any foreigners doing business here.Come , rent enjoy the positive sides, visit the beaches, Islands and cities, but do not invest in a business. The chances of succeeding  are against you

I do not know much about it.  I do know there is a Canadian franchise business here  looking for Canadians to import and introduce new Canadian products to the Philippines.  Your money stays in Canada.  You get a exclusive on the products as supply person & middleman.  A Import business they are in the freezone.   I know that kitchen goods is took as I have been in that store.  Don't look like they sell much do to price. High end stuff.  Lots of display items.  Trying to get Philippine owned stores to sell Canadian made goods. Introduction business I think you would call it.

If you have $20,000 dollars to invest Don't invest it in the Philippines.   And don't "start a business" here like every other Philippino or Philippina will tell you.    It is just a sham and chances are 20 to 1 you'll lost big-tme.   Many, many foreigners, too many to count, have lost their shirts trying  to "Strike it Rich" in the Philippines.  Just take your prize bride and live frugally.  You'll never become rich here and don't let your wife tell you  you  will.
Most Philippinas and their male counter-parts are  simply out for your money to invest  in some hair-brained scheme they don't have money for.and  never will.   If you $20,000, which is near a million piso in Philipplines....buy a  CONDO.   At least you will own it outright.   Or buy a house if you can stomach only owning 40 precent of it as Philippine law requires.   My first  trip to the Philippines
was in 2006.  I was married to a Philppina for five years and she died.  Now  I've been living here
for three years and am married again.   So I am no novice.  But if you  think you are smarter than
all the expats that have lost their grubstake here..go for it...Listen to these famous last words:  "I told you so."

Good advice well said

i suggest to those expats who would like to invest in philippines try  import and export example for canada or  american or europen nationals..try to invest in coconut juice or any coconut product and export them to usa ,canada,and europe

jc501 wrote:

i suggest to those expats who would like to invest in philippines try  import and export example for canada or  american or europen nationals..try to invest in coconut juice or any coconut product and export them to usa ,canada,and europe

USA gets coconut products from all over the world already, this is not a new idea, competing with Thailand etc.

philippine coconut and thailand are very huge different in terms of quality,of buko juice,, different bec, of kind of soil or land to be plant the coconut..also the fruits are mre big compare to thailand, mostly natural way of planting in philippines..thats the advantages..

One word of advice. ...  DON'T. A fool and his money are soon parted in the Philippines.

Hi,

I currently started a project and funded it myself I came from Uk too and live there and own a dinosaur attraction, but I choose to come back and expand here in manila. I started my project in bulacan ,interactive walkthrough attraction similar to how to train your dragon, and I am looking for small investment, my project can make atleast 12million pesos up to 30million pesos per year , that's why im so excited with my project, but funding it alone is hard ,I started the production of large animatronics dragons and you are welcome to see the the actual site abd actual dragon we making  or meet me first , please contact me in xxx christian

Hello everyone

@ peeweet6000, can you please drop an advert in the appropriate section of the website : Business partners classifieds in Manila

All the best,
Bhavna

It would be very interesting to learn "how" you own the business here?  Projects are typically part of a business scheme that includes funding and planning from within a corporate entity.  Investing in such an activity should require very detailed publication of the project details.  How can any expat here gain any meaningful information on starting a project that now has a production element (assumed with a business focus) when so many core elements are not detailed?

Is your "project" being used by the public here?  As a private person, partnership or corp, how are you in production here in the Philippines?  What does the documentation used for the business permit say regarding your legal business and production workers?  What software did you identify to SEC and use for the business accounting?  Is the business sitting on leased, rented or land you/your spouse own? 

When you say what you own a business/are in production here in the Philippines, please share your ups & downs with getting your TIN, Business permit(s), Brgy, employee benefits and any SEC registration events.

I hear so many say that they own here and yet, there are so few with proper business and or ownership documents. 

All of these are key blocks in "legally" owning and being in production with a business here. 

I still own my consulting business in California and produce consulting services globally, but I could never say it is a Philippine business just because  I may consult to expats here or at any international location.