“Cebu City, rich & vibrant. A source of well-educated, talented and trainable workforce. The international standards that its educational institutions promote has long given the Queen City of the South its advantage over neighboring metropolis."
The government’s incentive (BOI, PEZA) to businesses that generate employment has been a morale boost for those wanting to start a business here. Not to mention the cost of labor in information technology & outsourced business is relatively low compared to the same set of skills available in other countries.
How do you start setting up your own business?
It all boils down to planning. The common factor in big businesses that even when they initially started as small—from a garage or from a home office—is that they started by complying with all the legal requirements of doing business.
(Editor’s note: New tech startups may have a different methodology as they may build an MVP - minimum viable product - first before registering the business. The understanding is that technology changes so much that the initial business idea may not be what the eventual business will be like. Therefore, the thinking is to so spend more time on finding the MVP because if there is none, you may not have a business.)
Every business endeavor must start with legal compliance i.e. registering the business entity, getting all the required permits and tax registrations with the end view of making it big someday. It might be a bit costly from the start but it sure would save the business a lot of money, not to mention inconvenience, in the future.
It goes without saying that registering your business is the right thing to do.
But more than that, registering your business means you don’t get the inconvenience of being cited for any municipal, or worse, internal revenue violations which is very costly and tedious to untangle, not to mention any possible jail time on the business’ owners and officers.
Second, and this is especially more important to foreigners, registering your business gives it a separate legal personality to enforce and protect its rights. Foreigners on visitor visas, and even those without permanent resident status are generally not allowed to conduct business in the Philippines. This might be hindrance later on when the business needs to seek judicial aid or to transact business. The prohibition, however, does not extend to owning shares of stocks in a corporation or to sit as a member of the Board of Directors.
It is advised that a corporate entity be registered and all the permits be obtained prior to operating or starting a business in the Philippines.
Is there a way to do it on your own?
Business organization in the Philippines is generally simple and can be complied without the intervention of a professional like a lawyer or accountant.
However, the assistance of a professional is highly encouraged in order to maximize the positioning of the business to be able to obtain the proper permits, franchises and tax incentives, and to minimize any possible risks and liabilities to the people behind the business.
The Securities and Exchange Commission, the agency where a corporate entity is registered is introducing reforms in order to further shorten and simplify the registration process and promote ease of doing business.
Is there a way out when you get into trouble?
You should immediately avail of the services of a legal practitioner, more than anybody else’s. The lawyer will be able to give you a full evaluation of the risks and the possible liabilities involved.
You should give your lawyer a full disclosure of the facts, even those that you think might constitute as an admission of guilt or proof of commission of an act that you think might land you in jail.
"Rest assured that in the Philippines, any communication between a lawyer and his client is privileged and cannot be admitted as evidence against the client."
About Atty. Michal Gatchalian:
Admitted to the Philippine Bar in 2008, Atty. Gatchalian is a general legal practitioner in Philippine civil law, criminal law, labor law, corporate, business, tax, estate and family laws, general litigation and appellate practice;
His practice is currently focused on business organization and registration, corporate housekeeping, tax incentive applications and legal tax minimization strategies, labor standards, labor relations and termination laws.
Atty. Gatchalian currently sits as a member of the board of directors of several corporations and is among the founders of several non-profit organizations, which include an orphanage and other cause-oriented corporations.
Are you looking to register your company here in Cebu but you are not sure what to do first? Contact us at email@example.com for advice and support.