So, you are now living in the pearl of the orient seas, Philippines. And as a foreigner, you decided to start your dream business in the Philippines. Where do you start?
Luckily, although you are not yet a citizen of the country, you can start and own a business in the Philippines provided you follow the business laws and regulations of the country.
How do you form a business entity?
1. Sole proprietorship
You will need to register at the Department of Trade and Industry (DTI) and apply for a business name. For information on an office nearest to you, go to the DTI website and search for application forms and addresses.
Be aware that the applicant for a business name should be at least 18 years old, and that they MUST be a Philippine citizen.
Additionally, the applicant is required to submit two ID pictures taken within one year of applying for the business name. The applicant's signature is to be placed at the back of each photo.
If the applicant's name seems to be of foreign nationality, he will be required to submit proof of citizenship. Lastly, there is a fee to be paid for processing and documentary stamp.
You also can register at the DTI. However, if the partnership has Php 3,000 (Philippine pesos) or more in capital, you will have to also register with the Securities and Exchange Corporation (SEC). You should consult a lawyer to draw up a legal and appropriate partnership agreement for the business you are starting.
You need to identify a minimum of five (5) incorporators, each of whom must own at least one share of the corporation, and generally (except for corporations formed solely for the purpose of export, or corporations with paid up capital in excess of $250,000 as discussed in Chapter II) foreigners cannot own more than 40% of the total shares outstanding.
The corporation's bylaws and articles of incorporation should be prepared by a lawyer, and then registered with the SEC. Minimum paid up capital is Php 5,000.
Basically, once you have the corporation formed, it takes about 60 days to get all the necessary permits, licenses and approvals to legally commence business.
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