Small Business - share your experience for setting up a small business

Hello Gr Henry 

Welcome to Expat.com 

Hope somebody soon will help you out with your queries.

Regards
Kenjee
Expat.com Team

Hello Gr Henry,

I have not tried to open a business here in the Philippines.  I did do a little research on it when my son wanted to open a customer service phone room here and did not go thru with the project due to certain limitations.

First you need to know you can not own a business as a foreigner here.  If you want to open a business, then you will need a Filipino business partner.  There are a few expats that have businesses here, but most are not registered with the BIR, or they use a front person for the business.  The rate of foreign ownership here depends on what you are going to do, or try to do.  The foreign owner percentage of ownership can be from 40% to a maximum of 60%, with the Filipino partner owning the balance of the business.  This has the advantage of leaving you at the mercy of your Filipino partner.  You stand to loose some or all of the monies that you invested into the business.  Larger corporations are required to make capital investments of millions of USD in order to open a business here.  Before you invest here, check out any partner that you may be interested in helping you and if referred to an attorney try and find one not associated with the area you are interested in setting up the business and not related to an partner you may decide to have.  You can read the current Philippine laws online at: http://www.loc.gov/law/help/guide/natio … ppines.php

I hope this is helpful with what you are trying to achieve here in the Philippines.  RAC

(Moderated: please avoid generalised comment on the forum)

My 2 cents worth:  I think you should not put up a business here. 

First of all, you do not even know what type of business you want to get into.  What are your interests?  Do you have a business background? 

Second, it seems like you have not been here in the Philippines long enough to know the business terrain, that setting up a store, especially at a mall, is a huge risk, that many stores and kiosks at malls noticeably come and go at a loss for the owner. (A few of the expenses / capitalization for a mall store: advance rent for 6 months at PhP100k+ / month, salaries for sales persons, plus the investment on glass facade, cabinetry, flooring, store layout, etc.)  Or that the "very nice place" does not really suit the target market for your product or your budget.

Third, it looks like you would have to trust a stranger to give you advice on what type of business to set up, how you can own one, etc.  There are probably some who have already sent you messages on buying real estate as an investment or for rental income.  Or setting up any of the following: internet cafe, water refilling stations, laundromat, retail of novelty / imported items at malls or a retail shop, food cart at a mall.  Does your gf, who I assume is your main contact in the Philippines, have any background on business? 

Compare the case of two expats who started a business: Albert Sotelo and Chris Hill.  As of recent posts, Albert and his husband, both of whom have strong business backgrounds, now run a very successful restaurant. While Chris, a young man in his 20's who has a Filipina gf and kid, is asking how to get a free flight back to the US as his internet cafe here in the Philippines had gone bust. The readers of his post were wondering who advised him to go into that business and whether he'd bring his gf and kid with him either now or later on, or is he going to abandon them.

A constant and sure source of income, such as a pension or social security or from a stable business, and wisely spending money / budgeting is the key to surviving here.  If you do not have those set up, I think it's better to just bring the gf and kid to your home country.

Sometimes generalizations are true and appropriate. Being weary of doing business in the the Philippines is a generalizations, but true. his is suppose to be a forum that gives people good and accurate advice which I did. I lived there for 15 years and I think I know what I am talking about. I owned two business of my own there. The U S embassy even states that Americans should be cautious opening a business in the Philippines.

I will give it to you straight. As for any kind of retail business in the Philippines, you can not operate it unless you get permanent residency. The only think you can do is put it in a Filipinos name like your wife. You than get a chattel mortgage and power of attorney with he lease of the store. That will mean, that you own all equipment, supplies, furnishings etc. The Filipino partner will own nothing in the store if you are opening up some kind of store front. They will also not be able to sell it without your permission. When you register the store with the B A R you must state that the equipment is owned by you, not the person whose name is on the permit.

Guiding you step by step:

1. Register the business name via the website of Department of Trade & Industry (DTI).  Here is the link:

http://www.bnrs.dti.gov.ph/web/guest/registration

Once your business name is registered, you will get a certificate that looks like this:

https://docs.google.com/a/tagalugin.com … Xc/preview

2. Obtain Business License & Mayor's Permit.  Please note in order to get this one, you need to get a Barangay Permit, where the location of your business is set up.

Barangay Permit looks like this https://docs.google.com/a/tagalugin.com … lk/preview

Business License & Mayor's Permit looks like this https://docs.google.com/a/tagalugin.com … zQ/preview

3. Register to Bureau of Tax Revenue (BIR) as a taxpayer and obtain the authorization to print receipts.  For more information about BIR, you can visit their website: http://www.bir.gov.ph/

Once registered, you will get a certificate from BIR like this:

https://drive.google.com/file/d/0BzCZpP … view?pli=1

I would advise not to set up anything untill you have lived here for awhile. That way you will have a better idea of what you want and what the pitfalls are.
Retail is the last thing I would do. Why not look into the tourist industry. Like a guest house/restaurant. The tourist industry in the Philippines has being growing steadily for a few years now.

There are several successful franchises that do really well in a mall setup.  Find these franchises and franchisees through the Philippine Franchise Association.  For instance, you may invest in a tried and tested Mr. Donut franchise in the small investment category or a Jollibee (the biggest).  Foreign franchises thrive as well.  McDonald's or Pizza Hut for instance do really well across the country. 
Going at it on your own is of tremendous risk even to the initiated investor.  Should you need more information, you may contact us.  We own and operate a small business selling baked goods in Manila that is doing really well and recently opened a full service diner in Baguio City.

hi henri I run a internet cafe 20 units and it don,t make much money really but it keeps the misus occupied ,Its a cutthroat business here its easy to lose your money here ,theft is a big problem we had parts nicked out of the computers can you believe that ,I would suggest to try and open business in your home town and keep your money safe ,and maybe open small store to keep your girl happy.I am lucky in the fact that I have rental income from u.k and don,t rely on money earned here .

(Moderated: off topic + no copy/paste on the forum pls)

hi would you consider to invest in theme attraction? I signed a 5 years rent free agreement in bulacan last sept this year and I started my production building animated dragon base from movie animation, I am still looking for small investors . theme park here in Philippines always win and every kids knows how to train your dragonn please contact me in ** Christian/ I also have a dinosaur attraction in the Uk

Hi peeweet6000 > if you are looking for a business partner, you should post an ad in the business partners classifieds in Davao.

Ok thanks you

I'm guessing you're too young to be a pensioner. That's OK. You can still live here and have a good income but don't do it by trying to get a business going here.  Look into online business that generate a Euro or  Dollar sales. I have met several people who are running online businesses such as online retailers and web based information service, such as medical transcription, accounting and bookkeeping as well as data base and website building and monitoring. Try looking into something like that. This way you Will have a business that you don't have to report on to a foreign country.

I hope this helps.