Can a foreigner start a business in the Philippines
Holding a business in the Philippines is completely different from having one in Europe or in the USA. This is because of the way of life in this country.
In general the Philippine law doesn?t allow foreigners to own a business. Although there are possibilities to co-own a business.
In such cases the foreigner can only have 49% of the shares. The other 51% must be on the name of a Filipino citizen. This Filipino citizen can be a partner of the foreigner (spouse or unmarried partner or an other Filipino).
statement
What I am writing here, might sound negative for a lot of people, especially for Filipino’s.
I would like to explain that I am only writing this to protect foreigners to loose all their investments. Not to make the Philippines look like a country to stay away or not to start a business.
Most foreign expats in the Philippines are having some pension or other income from their home country. They do not need to have a business to earn some money. They only like to help their in-laws having some income. Some, for example, start a small business like a sari-sari store, gas dealership, drinking water dealer or something like that. They sometimes make little money but often not at all.
Others come to the Philippines to start a business and have a good life the same time. Usually it ends up devouring all their investment capital within one year or earlier. These people run a business like they do in their home country, they even might have the business run by Filipinos.
“When the cat is away, the mouse is here to play.”
As a foreigner you should run a business yourself. You can have some helpers, but ?YOU? should RUN the business and make the decisions. If you don’t intend to do all yourself, better don’t start a business at all.
In running a business in the Philippines you should keep in mind the Filipino way of life and working. If you don’t, your business will not work and you will lose all your investments.
To run your business well you should take notion of the following:
* When money is involved you can NOT trust any Filipino
* Filipinos make appointments but seldom follow them or show up much too late
* Employees suddenly do not show up at their job, without any reason
* Quality of the work of the Filipino is not to American or European standards, do not try to teach them, they only do it once and fall back in their own way
* If you hire an agent or “fixer”, they might run away with your money and never show up again
* You will experience suddenly being denied access to information regarding your business
* You will experience thousands or rules and regulations
* Changes in regulations, often never explained or mentioned, can be fixed at an “express fee”
* Delay in work, where an exact date has been agreed, without valid reason is common
* Nr 1 in the Philippines is money, money and more money for all Filipinos. How they get it doesn’t matter, as long as they get it.
Some general information and tips:
* If you do not have a Filipino partner (wife , girlfriend) you should look for someone whom you can trust. Check that person well, let him or her give you a formal and new police clearance, a certified true copy of his birth certificate and make a copy of all his identity cards- and papers. Talk to this person a lot, to find out if you can trust him/her enough to go into business with him/her. Eventually check where he is living and visit him at his house.
* Do run the business yourself with as less people in the management as possible. Just your Filipino partner and yourself will do.
* Never have anyone do something for you for free. Pay them accordingly but only after the job is finished. Do not allow a member of the family of your partner who might be a lawyer or consultant work for free. They will only serve their own interests.
* In starting the business keep all the talking and written documents in English. Do not allow your partner to speak Tagalog to other business partners or to those you are dealing with. It will be YOUR business, so you need to understand everything.
* Never start a business in a rush, no matter how great it looks or how good it sounds. Take a lot of time to get as much information as you can and never pay any money up front of anything.
* Make a list of all possible scams and all possible ways that you could be cheated out of your hard earned money. Keep in mind that a Filipino who is proposing a business deal with you has also done this, and he probably knows more ways to fool you than you know.
* A partnership with a Filipino should be worked out until the smallest detail, try to get as much as possible on paper and sign it both of you. Have that paper finalized by a notary. It might be wise to set up the papers by a well known English speaking lawyer whom will be hired by YOU, and not by your partner.
* Do not accept help from others than your trusted partner, and do not let him hire his family or good friends. You should be the one in control.
* For every contract or agreement hire a professional English speaking lawyer. Never just sign papers without contacting him and show him what you have to sign. Some lawyers speak better English than others. If such a lawyer suddenly changes into Tagalog, ask him to start all over again but in English. Otherwise you might be fooled !!
* Never pay any money without receiving an official receipt
* IF at any time you think: this stinks, immediately quit it because it usually does in such cases. The same goes if you have doubts about anything. Don?t let them convince you. Investigate yourself until you are sure about it.
* If you have to pay large sums of money, request that the receiving party is at the bank the same time with you. And only give the money if they present a clear and official receipt. Never pay to agents or others who are saying they handle business for someone. Pay only to the one you have to pay to. You may also ask the bank to write you a managers cheque (also called bankers / cashiers cheque). This cheque should be made payable only to the company or person you have to pay. Such cheque is as good as money.
* If you are buying real estate always do it professionally. Take care for the right papers and taxes. Be sure that the property is free of taxes to pay or mortgages. Always check the title of the property and have your lawyer check for the legality.
* Respect the Philippine system. You will have to wait in long lines when acquiring papers or information. Don?t get mad when it takes a lot of time. It can also be that after waiting a long time and you are spoken to, you have to address to an other place or window. That’s the Philippine way.
* Always keep control over your business yourself. Do not turn your back to it, not even for a moment. Do not go on vacation unless you are 100% sure that your partner handles your business well.
* Do not put too much money in someone’s hand, and check / control your finances every day.
* Do not believe persons who say they know someone in high places to avoid the long waiting queues. Also high placed people cannot help you when you are in trouble. Only money can help you, and nothing else than money, lots of money!
* If you have a Filipino girlfriend or wife: take care that you never get involved with an other one. For sure : YOU WILL GET CAUGHT >> your relationship ends, your business will go down and will end, and you will not have any money left.
* Always remember that you are in the Philippines and are dealing with Filipinos. Western style business practices are not known here. Ethics that you have been used to, are totally irrelevant. The Philippines belongs to the most corrupt countries in the world.
* The Philippines never really changes, it does business the same way it always has done, with a brown envelope under the table, the trick of course is not to take it too seriously, don’t love the life there too much, keep your guard up, be prepared for the unexpected, but have the time of your life while you are doing exactly just that.
Do you still like to have your own business in the Philippines? Go for it, but remember what I’ve written here.
Earlier comments
Allen L. Reyes
alrey.ahyer.com
alrey6@yahoo.com
Submitted on 2009/07/07 at 6:58pm
Well Sir, you first hand experiences in dealing with Filipinos, in general is negative. Why do you choose to stay and do business in a country full of these things? I wonder.
Anyway, good luck to your endeavor.
Reply jan
I?m having a lot of positive experiences in the Philippines so far. Unfortunately also some negative ones. But that doesn?t give me reasons to give up living here. I?m staying in the Philippines for a number of reasons. I?m writing about it in several posts.
I have posted this because people who want to come to this beautifull country like to start a life here and having a business, are asking me. I only like to warn them that it is not that easy because of the filipino way of life in general. I?m trying to warn them that they might lose all their money here in starting a business if they are not thoughtfull enough and take care well.
Filipino time:
Hi i have a comment over what you have wrote here,may i ask why do you preffer to live over there and not here in your homeland?i think you have put down much about filipinos regarding money dont you think its not the same here?i let you know my experience regarding a dutch company who dont want to pay my friend well in fact he was driving 7x a week almost 24hours a day and he was not payed,not only one company i know there are more.what i also learn is that even here in europe its always money that talks so try to see and look around you over there, its true phils.is corrupt but the same as here.and not all filipinos are all the same and so with european people because i have more bad experience over here in europe and so with others.i just hope you observe verry well before you judge every filipino,you have a good intention but you have make it in general and thats where i dont agree with.
actually you have a nice site only in this portion where i dont agree,
kris
The Philippines is a great country. I love the Filipinos. They are a lot of fun. You right on about the business in the Philippines. If you get rid of a Filipino they get vindictive and report your business to the authorities to see if they can hurt you. As for Corrupt Country, I am an American but our congress start salary at 179.000usd and leave office as millionaires. I think the US is worse especially under the Obama administration.
The philippines is a great country, but we all know that corruption will find over the world right?
Hi Jan
I’m a filipina,I and a dutch family have started our oun business here in holland,we are like family.trust and care are formed between us,i was planning to go back there in phils.for good and to start a new business and they have decided as well to follow me as soon as im settled with the business we are going to start.but then with what you have on your site it seems that its not possible to trust somebody like me when we are already there,as far as i know every country are corrupt like here in holland with the royal blood who are becoming richer and richer because dutch people are almost like slaves working only to pay for others.most of the foreiner i know over our place who started their business are still operating so not all philippine people are what you have meet.
Hi,
I couldn”t blame you if you think Philippines is one of the corrupt countries in the world…but its our government who makes the people that way…the one who is rich is getting richer and the one who is poor is getting poorer.
My husband is also foreigner, I met him when I was working in passenger ship…although my husband got a lot of properties that we manage in england I still work to support my own family back
home…You are true that foreigner must be careful in putting bussiness in Philippines they must choose the right partner…but there’s a lot of people that you can still trust.
There’s so many foreigner who wants to live in our country..the reason is you must admit that if you live here you can live in luxury that you cannot do in your own country. The money you have will be double or more when you’re in Philippines ,you can have your own business and you can give a good life to your family.Even you are telling me you have a pension in your country…would you like just to stay in your home and doing nothing and wait for your pension?
In our country we have a very nice weather, we have a very rich
resources and weather you like it or not people are friendly.
All of the foreigner who wants to invest and put up a business in Philippines I encourage you all to go for it!
All does red tapes and under the table is just a peny anyway, you must just be cleaver and really need to find someone whom you can trust and the rest…….you can live a happy life in Philippines.
thanks
foreigners doing business in philippines? hmm…not easy i can say but i should be fair also with filipinos.i think we need to also consider individuals,not everybody in philippines is bad,some are bad,some are also nice.am a students,a foreigner,i have experience situation where some bad egg will like to fool me and get my money,i have also experience where some filipinos had giving me money and food for free,some will even pay my fare..everybody in a country cannot be good,my brother was robbed b4 in UK but can we because of that say british are bad?not all.
regarding doing business here,not easy,i know many foreigners who owns business here and left back with nothing,empty handed.no matter how good a foreigner is as a businessman,u may fall if you deal with bad filipinos..filipinos like money? hmm..i can only say that the LOVE OF MONEY IS THE ROOT OF ALL EVILS..the only business i can do in the philippines is exporting business,buying good in philippines and shipping to my country.i dont have the mind owing a business here..
note from Jan: added three comments into one.
i am married to a filipina , n am very much happy with that . but believe me i came here with more than 2m to start a bussiness , did NOT ask for papers bcz it were her family members involved in it . i invested everything , n then SURPRISINGLY i was cheated , n NO ONE gave back even my CAPITAL involved . they simply told me to get lost , n i was left with no money at all . i even spend days here without ne food AT ALL ! but no one even had pity on me while the “FAMILY” people earned millions out of my own business . these filipino people have NO sense of conscience AT ALL , they just think foreigners are BANKS . n they can NEVER be trusted AT ALL !
all the filipino people can do is blame the government for their condition , but cannot work EVEN if they are offered a job . I come from India , n i am VERY WELL AWARE that it is 2000 TIMES much more harder to earn money in India AND china than in Philippines , but still we guys work hard for it , n dont just simply BLAME the govt for it . these filipinos are SIMPLY LAZY n all they want is EASY MONEY ! that is WHY philippines is not THAILAND today , even though it has the SAME beauty n the same BEACHES . these people are a shame on the human species and SIMPLY LAZY . . . !
n if any pinoy feels that i am over exaggerating , i wud like to point him out that the guy who CHEATED me was a PASTOR ! if ne1 thinks i am wrong he/she can reply me on aveeshkar_lakra@hotmail.com .
you people just know how to borrow money n NEVER give it back ! Shame on you filipinos ! i agree that corruption exists evrywhere , but Philippines is THE ONLY country where corruption EVEN exists INSIDE the FAMILY ! Shame on you people ! Shame on your culture !
I understand your desire to help out fellow foreigners by giving pointers, but must you do it in the expense of stereotyping my race and my culture? Im a level-headed woman and I admit that there are bad people around the Philippines, but for you to say that for “ALL Filipinos its only about money, money and money and it doesnt matter how we get it” just leaves a bad taste in my mouth. WE ARE NOT ALL LIKE THAT. Is your wife like that? Im sure she isn’t, so I dont get why you would generalize all Filipinos in that manner. And FYI though Filipinos can read and understand English quite well, it is still easier to converse using our native tongue so it should not be automatically construed that whenever we speak Tagalog it is being done so that we could cheat foreigners out of their moolah. Since you claim to love the Philippines you might want to try and learn some basic Tagalog so that you wont be so suspicious of the people around you.
To be cautious with your business is one thing, but to box all the Filipinos in one stereotype smells to me like a racist remark. Just speaking out my mind.
Annlieverd,
I am sorry if I have offended you and the other few Filipinos who are honest and helpfull.
My point was just to warn the Foreigners who would like to start a business in the Philippines, not to go into business with every Filipino who is willing to.
Of course there are also honest Filipinos, and maybe I should have written my article differently. I hope all readers also read these comments, and especially yours, to give them a more clearer view of the situation.
Thanks for the beautiful website on the Philippines:
I view several of them regularly and I find yours as good or better than all of them. On your English, excellent! I am currently teaching English at a University here in Dammam, Saudi Arabia and consider myself a good judge of one’s use of the language. Where did you learn it.
On businees in the Philippines: it is tough like everywhere these days. I had a gf in Manila in the 1980’s and 1990’s and we had a couple of girlie bars right downtwon near the Embassy. We did well but I must admit it took very long hours and involved the lady’s constant supervision. She passed away in 1997 and the business did not survive 6 months more. Her brother just was not her.
I have decided I would not have a chance if I tried to run a bar myself there so will retire sometime soon and just live on my retirement income.
I am interested in finding a nice place to lease in Malate or Ermita so please reply to chamowleemike@yahoo.com if you have any ideas.
Thanks again for your website, first class!
Mike,
Thanks for stopping by at my site.
Thanks for the compliments. I just try to write proper English and sometimes use a dictionary and spelling control.
The best way to find a pplace in malate or Ermita is BE THERE. I am sure there are many places for rent or for sale.
If any other reader knows something, just mail Mike directly !
Hi Jan,
after reading your post one really could think “oh my god, what kind of people are those phils”. Looking a little closer and considering the circumstances in other countries you get to the point to say, people are people thrers such and such everywhere. I dont know why the filippinos are getting such a bad reputation in global view. Werent or isnt it still that for instants filippino nurses keeping the health system up in many countries. Or, why do many company outsource their helplines there, not only for having cheap workers one big point is, they all speak english fluently.
And to open a business anywhere is being careful with so called friends as well even with your own family can be trouble not only the spouses`s. There should be a survey about + and – opportunities made up and I am sure there will be more good experiences. People that go there having a bad attitude treating their fellow citizens bad at home will bring this to the new country as well and dont need to wonder that in the end have the same situation like home after some time. You cant run away from your own self by changing the place of living, you have to work on your own behaviour.
Thats all for now, congrats on your site anyway, it helps to sustain my decision to go to the phils with my wife.
Klaus,
Thanks for visiting my site and the comment.
You are right concerning the first paragraph of your comment. Many Filipinos are good in English, that’s why many european and american helpdesks / call centers have their offices here. Also the cheap labor did his part of it. And many hospitals in Middle East, Europe and America have a lot of Filipina nurses to keep them going. It has to do with Filipino culture of taking care for someone.
Your second paragraph: Lots of Filipinos try to get as much profits from foreigners as they can: money or other things. Filipinos see all foreigners as rich people. If a foreigner would like to start a business here he should be aware of that. That’s the reason I wrote this post: to warn them , not to stop them !
Foreigners should accept and adjust to the Filipino culture. They should never forget that they are a guest in this country.
Thanks again for your comment ! It is much appreciated.
According to my analysis, millions of people on our planet get the home loans at good banks. So, there’s a good possibility to find a bank loan in any country. (included link removed by editor)
If you read my website well, you can read that the main reason for living here is my Filipino family. Because I’m retired I can afford to live in an other country.
Corruption is all over the world, some coutries more than others.
If you or your friend have problems with a Dutch company, I would advise you to find a legal way to get what you are entitled to. Go to a lawyer and make a claim to that company.
Good Luck
Corruption you will find all over the world. Some countries more than others.
For a foreigner to start a business here, it is difficult but not impossible.
Yes, corruption is all over the globe, some countries more than others.
Hi Liza,
I’m only saying that a foreigner, who wants to start a business in the Philippines, should be very carefull. I only give tips to them.
For a Filipina like yourself, there’s no problem in starting a business, because you are a Filipina and do not need a partner.
A Foreigner always needs a Filipino partner for at least 51%, which means that the Foreigner has a minority of the shares. There are a lot of Filipinos who can be trusted, but there’s also a lot which you cannot trust.
I you like to start a business here, with your Dutch friends, that’s fine as long as you trust eachother for 100%.
Thank you Susan,
This is exactly what I mean in this post.
this is why I wrote this post.
I have put your three comments together into one, I hope you don’t mind.
Thanks for your comment and your story.
And I hope you are doing better now.