Are foreigners allowed to establish a business in the Philippines

As of now I am still here in Saudi Arabia and maybe next year (3rd quarter) I could start my small business in Philippines.

I hope you can help me here. I'm engaged with my Palestinian boyfriend. We are both working in UAE but life is way difficult for us to stay so we plan to live in Philippines. I asked him to come with me. It means to stay and live in Philippines. He is not rich and just an average employee also. I have a store in my village. To be honest, he doesn't have a penny even to give but can I just declare that he invested in that store? We are planning to make a partnership in a small business. Can anyone suggest what are the business he is allowed to invest? Hope anyone can advice.

He can invest in any kind of business he likes.
Without a penny, I am sure that wouldn't be a risk at all.

Thanks much ericvda... We are excited yet worried what is the outcome.

Only if it is your wife, child, who is Filippino  can start a business as Filippinos and own it here.  A noncitizen can not own a business unless or up to 40% the other 60% Filippino owned.   But most will look the other way if you start one that looses money for you here.

Hi,
i was actually being sarcastic.... since he has no money, what is the risk for him ?

anyway, him coming to Philippines without any money is plain suicide.

those that are coming with money, usually spend or lose it all, willingly or not, after a few years time anyway.

It may all be romantic, but i doubt that this could ever work out.  It usually is the other way round.  Supporting him to stay legally in Philippines by doing a business is very expensive and the chances of succeeding are next to zero.  And he would still need to comply with all immigration's regulatory and that is also expensive and you would have to be his guarantor.  Not all that easy as you may think.  Just a visa expense for him to stay is at least 4000 pesos per month.  and that is just one bill but certainly not only that.


If you would become his employer, what could possible allow him to stay, it will cost you serious money and you will have to show you have a serious company that can afford all this and is allowed to hire foreign staff.  And aside from this, he needs to have the proper qualifications to work in your company. 

Marrying him is another possibility but you need to show you can take care of him, and once again, it usually is the other way round.  not that easy to explain that. 

So what i would recommend is to see how he can stay in the Philippines first.  He would never be allowed to work in it unless it is something specifically he and only he can do. 

For you to invest in his name, is never going to last.  Accounting wise, tax wise, it will eventually bite you in the behind.  ( investing money in a company needs to be recorded in the books, and taking money out also.  BIR is not that stupid and taxes you on  money taken out of the company that is for own purposes).  A running bill that will run in the hundreds of thousands pesos a year.  Without his living expenses.  For you to invest in his name, is the worst investment you could ever make.  it is the kind of investment that cost you money every month rather than receiving a possible earning.

When he can invest himself in a company with money he comes up with, that changes a lot and would also allow him to stay after some paperwork is done.  what company that is, doesn't matter.  And depending upon the type of business, he could even own up to 100 %.  Export company for example can be completely foreign owned and will also give him the access to stay in the Philippines after requirements are complied with.  Or a branch office from a mother company in his home country.


On a personal note, i would recommend he looks for a job first outside of Philippines, inside Philippines is impossible, and earns his money first what could eventually allow him to survive in the Philippines.  Philippines is very expensive to stay and live as a foreigner. 
just a thought

Thanks ericvda!

I will give it a shot anyway!

What's important for me is he is by my side. The amount I have I think is enough to start the business and process all his papers. What is living without him. Life would be useless. Money is something we earn to spend. If it's for him, it's worth it! I had a talk with my family, they understood and they're willing to help. If we can't, then he has to go back but I will still try. I never thought Philippines is expensive. I have a simple lifestyle! hahahaha anyway, thanks for all the info!

According to a tv program that I watched, yes, foreigners can own business here.... What they're not allowed though is to buy properties such as land; they could only rent....

hi all. i'm Vietnamese and is working here , Makati, in a call center with the 3 year working visa. I have come up with rhe idea to open a business in food industry. It is about a food shop serving vietnamese fast food. If any ( Both Foreigners and Philppinos beloved friends) is interest with my idea.

I will glad to share with you about my ideas/plans or anything regarding living and doing business here. Thank u guys

It is no do in the Philippines.  If you start a business here & do well.  In 4 months there will be 4 more across the street doing the same with family help.  Lower to no wage help.  Next they will check your books. You will do all legal & above.  So more overhead. You will go broke.  There are some franchises set up to loose money you can get into. Most to show of imported products. Not that you will sell many. Or turn a profit. But they wish people here to see there product.  So you loose money but get paid.

Well if Waterfall has something that can not be replicated or a source not avalible to others. That should not be an issue.

You to have noticed that many stores only carry 1 brand as they are the only one who can sell that brand in a area.  Or have the rights to sell that brand.  Kind of like beer in America. You can only buy it from there distributor.  At there price.

Yes, if sole proprietor then you need to invest 2,500,000 USD, if thru  a corporation or partnership there's sharing for as long the greater % of ownership is Filipino.  There are lists of business which are restricted from foreigners.  Retailing is solely for Filipinos unless you go into 70% of your goods or services is exported. Or domestic enterprise with 40% Foreign Equity with paid in Equity capital of less than the equivalent of 200,000 USD.

or you apply as special resident visa, depending on your age and you may invest in condominium, lease of house and lot and invest in membership of golf clubs.  Hope this can help.

hi., i am an expat resident in the philippines and married to a filipina. i am the owner of Bicol Classifieds Magazine and also Arabica Coffeeshop and resto. in Naga City Bicol region.( of course with my wife coz foreigner are not allowed to own more than 40% of the business).
as i understand you are looking forward to invest in a business here in the philippines.
i have a very good offer to you if interested. i am a very straight person not a scam not  a bad guy.
i am looking for a partner to join me in my media and marketing business to help me expand faster in the bicol region. so far we are covering the entire Camarines sur but we are aiming all Bicol which will give us access to more Businesses.
if interested to know more about my business and my offer to you please contact me for further discussion about the amount we are seeking and the legal status and income.
regards

You can only own 40%  Your partner will take you in a partnership. There are a few franchises you can own. You would need check the list here of what they are. But NO do not do such is the best answer you will get.

He is right you can only own 40%.  There are a few franchises that you can own that are exceptions. You would need read up on those.

I do see one business that would be ideal to build for a child or offspring here.   As it would take 10 years or more to become popular with international adds.

I but know nothing I would like to start a business in the PI

wow, great information, but is all the negativity really necessary?

Hi
  You seam the most knowledgeable about the topic.  I have a long story but likely common.   My mom is pinoy my dad is white.   I was born here in the US. My parents separated and my mom moved back to the PI. My brother and I have been supporting her and the land there for almost ten years.  The land was in my grandparents name.  Until recently my lola passed.   Now the land is in my mother's name.   But she always said that land is and will always belong to her only two sons.   Since we have been indirectly paying for it.   (Giving her money)  now we were thinking about selling it.  But thinking the best idea is to demolish the few buildings on it and rebuild apartments.  What I want to know is if my brother and I could have full ownership to do so?  What it would take?  How much?  If there is a possibility of finding an investor in the PI to co-own and manage it for us?  Along with any other possibilities of taking on such a big project?  My mother is not educated in this sense so I'm looking for professional thoughts outside of family?  Anything would be helpful thank you.

Dougiedefresh,

The first thing is to check if the land was transferred from your grandparent's name to your mother's name.  If yes, then you are her heirs if not, your mother and her siblings are the owners of the land even if you were the one paying for its taxes.  Please check if your mother holds the Transfer Certificate of Title of that land and if  it's in her name.

If your mother acknowledges that you and your brother are the owners of the land, then it should be transferred in your name to secure your ownership, that is if you are Filipino citizens.  If not, you can not own the land even if your mother likes it.

If you have spent for that  land but you can not own it, maybe selling it is the best option and the amount maybe invested in the Philippines. Foreigners can partner with Filipinos or may opt to be sole proprietor.

By the way, which part of the Philippines located?

lipslikesugar wrote:

Thanks ericvda!

I will give it a shot anyway!

What's important for me is he is by my side. The amount I have I think is enough to start the business and process all his papers. What is living without him. Life would be useless. Money is something we earn to spend. If it's for him, it's worth it! I had a talk with my family, they understood and they're willing to help. If we can't, then he has to go back but I will still try. I never thought Philippines is expensive. I have a simple lifestyle! hahahaha anyway, thanks for all the info!

Hi Lipslikesugar,
Hope my idea will work to you. Why not get marry first on the country where the two stayed and come back to the Philippines with him and u can exercise your balikbayan visa. Your husband can stay in the Philippines for a year and if that visa expired, u can just exit to another country and re enter phils. again and another 1 year balikbayan visa again. Be sure that when your husband will enter phils. You should be there and ready your marriage certificate to show the immigration officer. Actually we used this visa when my hubby and daughter entered the phils. And i should be traveling with them when they enter phils. If your husband travel alone he will need visa or may be given only few days to stay in phils. If he qualify a visa free country. I find it cheaper this way than every month renewing his phil. Visa.

borilove wrote:

I HAVE EXPERIANCED BOTH SCENARIOS,SO YOU MUST GET A VERY TRUSTWORTY PERSON SOMEONE WHO YOU HAVE KNOWN FOR QUITE SOME TIMES,THERE ARE LOTS OF SCAMMERS THERE AND USE THOSE BEAUTIFUL GIRLS JUST TO GET THERE WAYS.BUT YOU ALSO HAVE VERY GOOD QUALITY PEOPLE YOU JUST HAVE TO PICK AND CHOOSE THE RIGHT ONES.MY INTERNET CAFFEE WAS DOING VERY GOOD,WAS PRODUCING HALF MY SALARY HERE IN USA,BUT AFTER THE RAIDS THINGS WENT SOUTH FOR ME.BUT IM SURE ITS CAN BE DONE.FOR LARGER AND BIGGER BUSSINESSES IT IS BEST TO MARRY A CITIZEN THERE THEN YOU HAVE NO PROBLEMS AS LONG AS ITS TRUE LOVE AND NOT MONEY LOVE.GET IT?

The... Raids?

i am an American with experience in Marketing and Printing I am looking for business opportunities here in Tacloban Leyte for me and my Fiance. I also have some contacts in Cebu (natives) I would be interested in hearing more about your Idea's If you like please contact me here privately and I will provide my personal contact information

of course, foreigners are allowed to do business here in the philippines. but there are certain limitations for a certain type of industries

Excuse me please don't get personal if someone has a different viewpoint to you as for mail Order Brides that Business was made illegal in the Philippines years ago and don't be so disrespectful to women here it's not clever it shows ignorance

a foreigner can NOT own land in the philippines, but you can lease land under certain conditions only a pinoy will tell you different

yes some have given incorrect information and your one of them

Hi I am a Singaporean but was married in Cebu in which my wife and child are both a Cebuano. Giving this I intend to run a Maid Recruiting Agency for the international Market as I have already established one here in Singapore.  What are my requirements and how much partnership is required for a Philippine share holder or is it required too.
I will be glad to here some feed backs on this or email to me.
Thanks guys..

the word" lend "as in money is really" give"dont expect it back

no particular share for partnership set up but for corpo, there are minimum requirements

Anyone know a trustworthy and reliable (knowledgeable) attorney in Davao City. I am thinking of establishing a business here.

Thanks in advance
Wayne

Can a foreigner start a Call Center business in Philippines? I want to help a foreign friend

barkz wrote:

the word" lend "as in money is really" give"dont expect it back

My brother-in-law wanted to borrow money to buy a truck so he can move copra from the family farm to market. I offered to buy the truck, keep the title, lease it to him banking the payments until he paid the principal plus 7%. He pays maintenance. I pay insurance. What's the downside?

ElGatoNegron wrote:

Anyone know a trustworthy and reliable (knowledgeable) attorney in Davao City. I am thinking of establishing a business here.

We can help you out here in Cebu while somebody is doing some legworks in Davao City


Thanks in advance
Wayne

FilipinaAko wrote:

Can a foreigner start a Call Center business in Philippines? I want to help a foreign friend

Yes he can. In fact, he may be entitled of tax privileges.

In keeping with my tradition of telling it like it is...

You are a MARK, in PH.  You will be charged double (at least) for whatever you buy.  They call you "Joe" behind your back...

Any money you "invest" you will lose.  Dead serious.  And yes, some will disagree, but in time they will learn .)

I guess the main question, for me at least, is why would you want to be there permanently; to live behind barbed wire... in an environment where you "stick out like a sore thumb.?"  Maybe you are getting off on the diesel smoke, coming out the back of all those jeepnies?

Do yourself a huge favor - FORGET IT.

Try the province, you wont be so angry.  Though I agree investing here should be left to the locals or as  I like to put it. Mutually assured sovereignty.

There are many posting very solid advice here.  If a person wishes to start a business and move past the advice/warnings they should look into the corporation details a bit more. 

Notice:  This will be a long post…… 

I will share a few lines/instructions I have provided privately to a select group of expats here.  A starting point is to read, research and/or obtain consultations well past just the need for a 60/40 split.   

Phase I

You (the expat) should start with a very simple and logical evaluation process.

1.  Either the 1987 Constitution has been changed on foreign ownership or it has not been?

2.  Either the 40% ownership is limited to and includes the "partially nationalized activity" in "your sector of interest" or it does not?

3.  Either this law controls the participation of foreign entities in economic and commercial activities in the Philippines or it does not?

4.   Either this law says "that foreigners may hold interests in corporations, partnerships and other entities in the Philippines, provided that these are not engaged in an activity that is reserved by law only to Philippine citizens or to entities that are wholly owned by Philippine citizens".

5.  Either your corp interest is under a "economic and commercial" activity or it is not?

6.  Either the Foreign Investments Act of 1991 has been changed in 2017 to allow 100% ownership of your corp interest or it has not? 

Note:  When a person reviews the FIA (RA 7042, 1991 as amedded by RA 8179), they must include section 7 and read the seven (7) points carefully.  You must also look at the last revision dates for all of these RA's.  All 7 requirements/restrictions are UNDER the 40% max foreign equity section of the law and when point 6 & 7 talk about paid-in equity of less than US $200K and the advanced technology with min 50 employees with paid-in capital of US$100K, that still places those allowed events within the 40% structure.

7.  Try to avoid any structure that is not recognized by the SEC.

8.  Try to avoid persons telling you $200K-$2.5M will fix your problems.   Note: Sec 2, sec 7 of RA 7042 was amended as follows:
“Sec. 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 the Constitution and existing laws or the Foreign Investment Negative List under Section 8 hereof.”

You (the expat) should note the last part of the sentence that reads: "unless foreign ownership therein is prohibited or limited by the Constitution and existing laws or the Foreign Investment Negative List under Section 8 hereof"

9.  If you/your advisor(s) disagree with the above Sec.7 clarification or still feel this area is unclear, you may want to review both the title and page 5 of http://www.sec.gov.ph/wp-content/upload … -12-02.pdf (which reinforced the same 40% limit in SEC-OGC Opinion No. 11-25 from the same point in SEC-OGC Opinion No. 09-30).

Phase II

You (the expat) should start with clear "Corporate structure Goals" based on the above outline.  Structure all activity in accordance with The Corporation Code of the Philippines - Title III):
Title III Sec. 25
1.  Create a stock corporate structure of 60% Filipino and 40% Foreign ownership by a minimum of 5 persons, including yourself as the 40% foreign owner.

2.  Learn how to/research on: Wording the Bylaws and AOI for Board of Directors to be the incorporators in the first year.

3.  From the By-Laws, carefully select/formally place a Filipino citizen as the President, carefully select 3 directors with linked titles, carefully select a "Treasurer" with that title, who may or may not be a director, randomly select a "Secretary" with that title, who shall be a resident and citizen of the Philippines. Make sure all persons have a TIN as each person's TIN (Including the expat's) will be placed in the documents.

4.  Make selections based on Sec. 25 requirements that: "Any two (2) or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as president and treasurer at the same time." 

5.  Complete revocable document drafts for each of the Filipino incorporators as your "alternative" tool.  This is a very sensitive area and must be done by a very knowledgable person.
 
6.  Decide and assign the treasurer along with related Bank deposits and letters. 

7.  Communicate with all related government agencies regarding your intended corporate operations.
Research, process and or obtain any all required pre-approvals, if any, that may be tied into your selected sector.

8.  Present all documents to SEC.

9.  Understand if you are intending to be in retail trade where either your intended acts, work and sales falls under RA 8762 or not?  If you feel your business does/will not fall under RA 8762, Sec. 3(1), you must be ready to write a special set of BL/AOI (By-Laws/Articles of Incorporation), to explain how you can sell and have the SEC overrule SEC-OGC Opinion 14-12.


10.  Resolve any questions of issues that SEC may bring up.  Modify/alter any wording you want/need based on your views, beliefs, assessments and or SEC talks/visits.

Note:  You (the expat) must answer the question as to who is/will be responsible or accountable for any changes or modifications in document wordings or explanations that you or any person you cause to communicate with the SEC regarding the supplied document(s).

In summary, there are so many details not covered here but either a person/group takes the time to research, study, focus, understand and structure all of the corporate documentation needed (on all aspects of their business plan) or get help from some person (they can trust) or a government office that they hope will tell them the truth, or this process will be a giant waste.

I found out I was wrong. You can own a business here.  But you are not allowed to make money from said business here.  But as long as it looses money here you are ok. They like to see you spend your money here.