Asia Business Guide

Moving to Philippines, guidelines & tips, part 2 of 10: Establishing a business

Press Release   •   Oct 05, 2010 23:43 GMT

The advantages for making the move from a country like UK, USA, Japan, Korea, Hong Kong, Singapore and Australia for example, to a country like Philippines are enormous.  Heavily in your favor are factors like asset values differentials and substantial reduction in cost of living.  Selling off a home probably generates enough capital to not only live comfortably in a bigger property in Philippines but also to re-establish oneself in the business community by starting a business here too.

 

But before one gets too enthusiastic over the move and start to be complacent about the necessary planning and research that should go into an important project like this, let’s look into several key issues that need some undivided attention.  

 

 

Issue:  Starting a business in Philippines

 

Problem:  Retirement is a difficult proposition, an uncharted territory for most also.  Having mustered enough capital by selling off valuable assets at home before moving to the Philippines, there is plenty left for starting a business after settling in comfortably in a new and larger home in a nice location.  However, being a “new kid on the block” means new tricks have to be learnt to make money in the Philippines.  More than a few foreign investors assumed too much from their rich experience operating a successful business back home.  Things don’t work quite the same way in the Philippines.  That said, there really are many things going for the foreigner doing business in Philippines.  The level of competitiveness is much lower in a third-world country.  (That’s why it’s a third-world country.)

 

Strategy:  Certainly it pays to start small and conservative, sticking to simple business models, staying well within the boundaries of the (local) laws.  Avoid starting from scratch is always good advice even in more advanced societies and certainly holds true in the Philippines.  Foreigners are ill-advised to think that labor costs are low in Philippines.  Labor laws in Philippines are very backwards and totally lopsided in favor of labor. This has the effect of adding a great deal of hidden cost to human resources, not only at the rank and file levels but also in middle management where salaries can be quite stiff.

 

Solution:  Buying an existing business is certainly the way to go, albeit requiring extra due diligence before the check is written.   Many foreigners manage to operate their businesses successfully in the hospitality sectors.  This is not by chance.  Filipinos are well known for their easy-going, eager-to-please and pleasant demeanor. What is lacking is discipline and management capability.  This has been the bane of most locally-run hospitality establishments.  The presence of a foreigner in this formula often plugs the hole and makes for a strong and competitive business. Success stories of businesses owned and operated by foreigners in Philippines can be found in more simple and capital intensive businesses.  Many foreigners construct condominiums to collect rent.  Rental income is extremely high in Philippines, exceeding already high prevailing bank interest rates. 

 

Many are selling off their assets to start a new life in Philippines, taking advantage of the standard-of-living differential to start a business or just enjoy living in a tropical country.  With careful planning, the move to Philippines can work out brilliantly or it can be a painful mistake.

 

For more information and some assistance on preparing your relocation to the Philippines, contact:

 

Yats Philippines Business Advisory

Manila Sales Office          

3003C East Tower, Phil Stock Exchange Center,

Exchange Rd Ortigas Metro Manila, Philippines 1605

(632) 637-5019   0917-520-4393  ask for Rea or Chay

 

Email:  Philippines@Yats-International.com

 

http://www.yatsleisure.com/

 

Yats Philippines Business Advisory offers important news, suggestions, tips and information about living, doing business, retiring and planning a vacation in the Philippines.

 

http://www.yatsleisure.com/

 

Yats Philippines Business Advisory

Manila Sales Office          

3003C East Tower, Phil Stock Exchange Center,

Exchange Rd Ortigas Metro Manila, Philippines 1605

(632) 637-5019   0917-520-4393  ask for Rea or Chay

 

Email:  Philippines@Yats-International.com