Setting up a foreign-owned business in the Philippines is no walk in the park. A foreign-owned corporation must obtain the necessary permits and licenses, register with the proper government agencies, and make the required capital investments   before setting up business operations inside the country. Business Registration procedures in the Philippines are different for sole proprietorships, representative offices, branch offices, regional headquarters (RHQs), domestic corporations or subsidiaries. The type of business established by the foreign investor is determined by the kind of industry that he/she wants to engage in. Under the 1991 Foreign Investments Act (FIA), foreign investors are allowed to engage in any business enterprise, as long as it doesn’t fall under the foreign investments negative list established by the Philippine government, wherein foreign ownership is restricted to a small percentage of the company and the investor is required to establish a corporate presence inside the country.

Cyber Parks (Techno Parks, IT Parks, Ecozones) are ideal destinations for setting up a BPO or call center in the Philippines. Outsourcing companies prefer to locate business operations inside technoparks, mainly because of the large number of tax incentives and government exemptions available in these areas. Businesses established inside IT Ecozones are eligible for numerous benefits, including income tax holidays from 5-8 years, permanent residency status to foreign-based business owners and investors, as well as the payment of 5% tax on gross income after the company’s income tax holidays have expired. Government exemptions on capital equipment, the employment of foreign nationals, and gross income remittances are also readily available to foreign and locally-owned BPO companies in these areas. Metro Manila, considered as one of the top BPO destinations in the world, is home to a large number of these Cyber Parks, some of which include the Eastwood City Cyber Park in Libis, the McKinley Hill Cyber Park near Fort Bonifacio, UP-AyalaLand Technohub in PHILCOA, and the Northgate Cyber Zone in Alabang.

Outsourcing companies in the Philippines can opt for either PEZA or BOI Registration to obtain tax incentives in their respective fields of enterprise. Registering with either PEZA or BOI offers numerous benefits for start-up companies in the country, including easier visa processing for expat employees. However, only certain types of enterprises are eligible for PEZA or BOI registration and registrants must comply with the conditions of their respective registration agreements.

According to Amanda Carpo, senior corporate lawyer of Kittelson & Carpo Consulting, “Companies setting up operations in the Philippines must carefully weigh their options before registering with either PEZA or BOI. This will not only prevent unnecessary mistakes from being made, it will also ensure that your company receives the best possible benefits, under the best possible conditions.”