5 Things to know before investing or starting a business in Philippines
Shona
Everything is the Philippines is based on relationships. Like other places in Asia, the Philippines is a place where it’s important to get to know people and build trusting and genuine relationships before venturing into business with them. Building solid relationships is also important for everything related to business including getting recommendations, finding great real estate and acquiring and retaining quality talent. As an outsider, this can take time, but given the way things are done in this region, the time spent building relationships is time saved over the long run.
Infrastructure challenges: The Philippines has struggled to keep up with technology infrastructure, particularly its internet networks. Perhaps one of the greatest operational challenges in the country is the often unreliable and always prohibitively expensive internet. To ensure that your business can be successful, thoroughly research the internet connection of any potential company site. There are areas that have begun to invest in better internet and finding those locations is essential for success.
Lawyer up: Finding a quality lawyer is key to starting a business in the Philippines. It can often mean the difference between waiting one month to incorporate vs. six months for paperwork to come through (one month is normal, six is not.) Using those networks discussed above can be a good starting point for finding and vetting potential lawyers in the country. The best way to know if they are up to the task: as previous clients how many weeks it took them to incorporate. If the answer is more than 4, keep moving along.
Outsource: In the Philippines there are lots of layers and levels of government bureaucracy. Therefore, to avoid getting bogged down by tedious paperwork and complex tax forms, businesses should outsource as much as they can-especially in areas of payroll, for which there are available services in the region. When possible, HR, accounting and tax filings should all be sent to agencies or outsourcing centers.
Talent: While the Philippines is known for a low-cost qualified labor pool, this model can prove to be a challenge for companies looking to plant strong roots in the country. In general, the Philippines struggles with brain drain as most of the population will run at the first chance they get to leave the country. For the success of your business it’s imperative that you spend money and resources finding and retaining quality talent. This does not always come as cheap as you might have been led to believe but it’s the only way to build a solid and stable talented workforce.
