About Philippine Business Investing

By Josienita Borlongan

Investing in the Philippines gives an opportunity for foreign investors to work closely in partnership with the Philippine government. This win-win situation enhances trade relations as well as fosters foreign relations. It also helps improve the Philippines’ economic condition by providing additional employment, promoting exports of local products and increasing earnings from taxes and fees.


  • A foreign investor can start or invest in a business in the Philippines by registering first with the Securities and Exchange Commissions (SEC). There are licenses and registrations required prior to doing business in the Philippines. If a foreign corporation or an individual investor has a project, they are required to file an application for registration under Book 1 of the Omnibus Investments Code of 1987 Executive Order No. 226 through the Board of Investments (BOI). The official filing includes the application form, projects reports and other such other documents required by the board. There are fees assessed for each filing.


  • The types of businesses available to foreign investors are as follows: 100% ownership and partial ownership (joint venture) with certain percentages of ownership. Full or 100% ownership or equity by foreign investors doing business in the Philippines may be allowed in all areas with the exception of financial institutions and those investments included in the FINL (Foreign Investment Negative List). Joint ventures or partial ownerships are available to foreign investors where stakes in the business equals the percentage of ownership. The SEC allows ownership of over 50% provided the business does not fall under the FINL list.


  • There is potential for the foreign investors who are doing well with their business ventures to apply for expansion, whether to add more branches or to open multiple types of businesses. Foreign investors help the Philippine government by providing employment opportunities to a lot of Filipinos as part of their economic plan. Export and import of goods from and to the Philippines are also encouraged.


  • There are certain benefits and incentives accorded to foreign investors. The BOI issues an Investment Priorities Plan (IPP) annually which lists the investment incentives provided to foreign investors and the private sector. Fiscal incentives include tax holiday, exemption from taxes and duties on imported spare parts, tax exemptions on breeding stocks and genetic materials, tax credits and additional deductions from taxable income. Non-fiscal incentives include employment of foreign nationals for technical, supervisory and advisory positions with term limitation; simplification of customs procedures, importation of consigned equipment, privilege to operate bonded manufacturing and trading warehouse.


  • Foreign investors should be wary of unscrupulous individuals out to bilk them of their money by posing as liaisons or representatives of government agencies. It is also important to abide by the SEC rules and regulations to avoid impositions of penalties. Also, ensure that you do not operate any illegal activities to avoid prosecution