1. Choose Your Business Structure
Foreigners can legally own businesses in the Philippines, but some restrictions apply depending on the industry. Your options include:
- Sole Proprietorship (requires a Filipino citizen as owner)
- Partnership (at least 60% Filipino ownership is usually required)
- Corporation (up to 100% foreign ownership allowed in most sectors)
For full foreign ownership, it’s recommended to set up a Domestic Corporation or a Branch Office. Review the Foreign Investment Negative List (FINL) issued by the Philippine government to understand restricted industries.
2. Secure the Necessary Capital
Depending on ownership and business activity, you may be required to bring in a minimum capital amount. For instance:
- US$200,000 is typically the minimum for 100% foreign-owned corporations.
- This can be reduced to US$100,000 if the business involves advanced technology or employs at least 50 Filipino workers.
It’s wise to have a clear financial plan, especially if you’re bootstrapping or seeking funding. For entrepreneurs who need initial capital to launch their business, startup business loans can help cover essential early expenses such as legal registration, travel, equipment, or hiring local staff.
3. Register Your Business with Philippine Authorities
Once your structure is decided, follow these key registration steps:
- Reserve your business name via the Securities and Exchange Commission (SEC) or the Department of Trade and Industry (DTI), depending on your business type.
- Register with the SEC (for corporations) or DTI (for sole proprietorships).
- Obtain:
– Barangay Clearance
– Mayor’s Business Permit
– BIR Tax Identification Number (TIN)
– Social Security System (SSS) registration
All these steps can be completed locally by an appointed representative or through a Philippine-based legal consultancy.
4. Open a Philippine Bank Account
Opening a corporate bank account in the Philippines can be challenging from abroad. You may need to be physically present or appoint a local director to assist. Major banks such as BDO, BPI, and Metrobank offer business banking services for foreign entities. Requirements generally include:
- SEC registration documents
- Board resolution
- Valid IDs of directors
- Proof of address
Make sure to choose a bank that offers online banking and supports international transactions.
5. Consider Hiring Locally
The Philippines boasts a well-educated workforce with strong English language proficiency. From IT professionals to customer service reps, the talent pool is deep. When hiring, you must comply with Philippine labour laws, which include minimum wage requirements, 13th-month pay, and government-mandated benefits.
You can recruit directly, use a local hiring agency, or engage a Professional Employer Organisation (PEO) to simplify compliance.
6. Understand Taxation and Compliance
Foreign-owned businesses in the Philippines are subject to corporate income tax, VAT, and local business taxes. Key tax considerations include:
- Corporate Income Tax: Currently at 25% for most businesses
- VAT: 12% on goods and services
- Withholding taxes on employee salaries and contractor payments
Consider hiring a Philippine-based accountant or tax advisor to stay compliant and avoid penalties.
7. Protect Your Business Legally
It’s vital to have clear legal contracts in place with local partners, employees, and suppliers. Australian entrepreneurs should also ensure:
- Intellectual property (IP), such as brand names or inventions, are protected under Philippine law.
- Dispute resolution clauses are included in contracts.
- Insurance is taken out where appropriate (property, public liability, employee cover).
8. Stay Connected to the Filipino-Australian Community
Starting a business in another country doesn’t mean going it alone. The Filipino-Australian community is vibrant and supportive. Platforms like PhilTimes provide updates on cross-border opportunities, diaspora success stories, and helpful resources for Australians investing in the Philippines.
Joining local business chambers—such as the Australian-New Zealand Chamber of Commerce Philippines (ANZCHAM)—can also provide valuable networking opportunities.
Tips for Success
- Visit the country regularly: Spending time in the Philippines helps you understand the market, build trust, and manage operations better.
- Hire a local lawyer or consultant: They can guide you through red tape and protect your interests.
- Think long-term: Philippine business culture values relationships. Show commitment and consistency.
- Show cultural awareness: Acknowledge local customs, value personal connections, and respect hierarchical structures—these gestures significantly enhance trust and business credibility.
Final Thoughts
Launching a business in the Philippines from Australia can be a rewarding venture, offering access to a high-growth market and a talented workforce. With the right planning, legal structure, and funding in place, Australian entrepreneurs can thrive in this dynamic Southeast Asian economy.
Whether you’re just starting to explore offshore opportunities or ready to begin registering your company, take the time to build strong local connections and stay informed. Platforms like PhilTimes can help you stay in touch with both markets and navigate your entrepreneurial journey with confidence.
Need financial support to kickstart your venture? Consider exploring startup business loans tailored for Australians launching new ventures—locally or abroad.
