Are you dreaming of starting a business in the Philippines but not sure where to start?
We have created a checklist if you are starting a business in the Philippines to get the ball rolling and make the process less daunting. We will get to the checklist a little later in the blog.
Let's first get to know what is the best startup business in the Philippines and the biggest industries in the Philippines to start your business or invest in. It can be a lucrative venture to set up your startup in one of the fastest-growing industries in the country.
According to the Philippines' Department of Trade and Industry, a total of 957,620 business enterprises were operating in the country in 2020. 99.51% of the total are classified as MSMEs (micro, small and medium enterprises), and 0.49% are large enterprises.
These MSMEs generated 62.66% of the country's total employment. The explosion of e-commerce sites, mobile payment apps, social media platforms, and other online marketplace has made it way easier for people to start their own ventures in 2022.
The top 5 most popular businesses in the Philippines according to the number of MSMEs in 2020 were:
Some of the trending industries that have the potential to grow bigger in the country in the future due to digital transformation and changing consumer behaviors are E-commerce Consumers and Retail, Telehealth Services, and Digital Solutions Providers.
While starting a business in the Philippines on your own can be rewarding, it is not easy to bring your business idea into a reality. There is a lot that needs to be done: you have to develop your product or service, do accounting, sort out legal matters, take care of marketing, hire employees, and more.
And if you are a foreign investor looking to do business in the country, understanding the business culture in the Philippines can be an advantage. For instance, the business culture in the country is a blend of different western and eastern cultures. Their society is hierarchically structured, and family ties are strong. Many businesses are run by family-owned conglomerates. The more important connections you build, the easier it is to do business in the Philippines.
Now, it is time to get to the checklist that we have prepared, including steps to take before you register your business, through the early stages of your business, and the basic legal requirements.
Writing down the aim of your business and coming up with strategies to accomplish them is a very crucial step as you are laying the foundation of your start-up.
To get you started, you will have to ask yourself the following questions:
For small businesses that are not seeking angel funding or venture capital, the following are the best options available:
Small business grants are one of the best ways to fund your startups and existing businesses. Many of the grants are provided by government agencies or private organizations to small business owners looking to grow. Although it takes effort to research and apply for grants, securing a grant gives you free money to start a business.
Often less than $10,000, the loans can help you get your business off the ground if you are short of money. There are a lot of government loan programs for medium and small business enterprises in the Philippines. You have to dig further to see what options are out there. Many local governments have special credits to help small businesses grow faster.
You can apply for personal loans from your bank if you have a good credit score instead of business loans. Standard business loans are not always easy to obtain, especially for start-ups with limited or no transaction history. Before applying for one, check with your lender if there are no restrictions on the loans for business use.
Crowdfunding platforms such as Kickstarter or Indiegogo are a popular way for new business owners to gather funds. The funds are contributed by a large number of people instead of an investor investing a large chunk of the fund.
Asking your friends and family is one of the most common ways to fund your small business. It is less expensive than business loans and other alternative sources of financing your startup. When asking for the fund, be prepared with your pitch and a business plan to help them understand why they should invest in the potential of your business.
Overseas Filipino Workers (OFWs) send money to the Philippines in thousands to help fund the businesses of your friends and family back home.
Most of the money sent home is used for covering household expenses, educational payments, and starting a business. Many OFWs, while earning abroad, gain business experience and, upon returning, start their venture at home or are left to be managed by a family member in the Philippines.
Read more on how to send money to the Philippines.
The next step is to decide what type of enterprise you plan to run. Are you the sole owner or proprietor? Do you plan to run it with a partner? Or will it be a corporation?
Each type has its own benefits and different tax liabilities and regulatory requirements.
If you want to be a sole owner, this is the best option. There aren't a lot of liabilities meaning no employees, no major investments, or minimum regulation. As your business grows and starts to generate more profits, you can decide to incorporate.
Ideal for businesses with two or more business owners. The partnership is a separate legal entity from the individual business owners. Since each partner has a stake in the business, the profits are shared between the partners and may have varying tax implications.
A minimum of 5 and a maximum of 15 people can form a corporation. One of the major benefits of incorporating your business is tax breaks and avoidance of personal or financial liabilities if someone sues your company. There will be more regulatory restrictions in applying for this type of business structure.
The next step is to register your business (including your business name) with the relevant government agency based on your business structure.
Sole proprietorships must register with the Department of Trade and Industry (DTI). Partnerships and corporations must obtain approval and get registered with the Securities and Exchange Commission (SEC).
A physical address of your business will be an important requirement during registration and applying for necessary permits/licenses from various government agencies.
A barangay is the smallest administrative unit in the Philippines. All businesses are required to obtain clearance from the barangay they belong to.
Basic requirements to obtain the barangay clearance are:
LGU is locally known as a mayor's business permit. To secure a license to operate in a city, you will need to provide the following documents:
Additional requirements may be asked, depending on the nature of your business.
Visit your local government or the Small Business Administration website to find out whether any national or regional licenses are required to operate your business. Each municipality has its own rules and procedures for the registration of business. Better to check the specific websites of the areas in question for more information.
Typical requirements include:
The next step is to register your business with the Bureau of Internal Revenue (BIR) to smooth out tax compliance requirements. You need to get a Taxpayer Identification Number (TIN) from the Revenue District Office (RDO) within the registered location of the business.
You need the following documents:
You also need to register your employees (if you have) to the BIR. You need to provide:
The Philippines government requires all types of businesses to register as employers with SSS, PhilHealth, and Pag-IBIG. You also need to register your employees with these agencies.
The SSS is a social insurance program that collects the monthly contribution of employees, along with the share of their employer, to give employees health and retirement benefits from their monthly contributions. The SSS also provides a variety of small loans. An SSS membership is mandatory for all employees who are 60 years old and below.
The employee and the employer also need to contribute monthly to the Philippine Health Insurance Corporation (PhilHealth).
Monthly contributions are deducted from the salary of the employee and are contributed to the Home Development Mutual Fund (Pag-IBIG Fund). It provides a variety of housing loans to employees.
When you start a business, it is wise to keep your personal and business finances separate. It is best not to use your personal account for business transactions. You can also get a business credit card to cover your emergency expenses during the early stages of launching your business.
If you plan to expand into international markets and expect to generate substantial sales in these overseas markets, opening an overseas bank account in these markets is the wise decision. You can anticipate a lot of international business transactions. Having an overseas business account can save you money on bank transfers and currency exchange rate fees when sending money to the Philippines or the other way around.
If you wish to avoid banks and their high fees, there are money transfer specialists that you can open a business account with for easy international transactions. Many of them offer multi-currency accounts that let you hold several currencies and convert between them at a low cost.
Furthermore, establishing a financial presence country-by-country allows you to see country-specific revenue. This makes it easier for your bookkeeper and accountant during tax season.
Accounting is keeping a complete record of all the income and expenses, which will show the financial health of a business, especially in the early stages of the business.
Cash flow is a crucial component of running a business to see how your finances are doing on a monthly basis.
Use accounting software to run profit or loss forecasts. The software automates this process and can help you visualize the cash flow (money coming in vs. money going out).
Setting up a proper accounting system from the start with future growth in mind will save you time, money, and headache in the long term.
You can hire an accountant or financial advisor to do the bookkeeping. This can save you a lot of time.
Keep the record of all your finances in a safe place. Every business has legal and tax obligations for record-keeping.
Businesses in today's digital age at least need to have a website and an email address. This should be part of your marketing strategy. This way, you will get new customers online.
Luckily, you have to spend a lot of money on building a website. Services like Squarespace, WordPress, Moonfruit, and Onepager can quickly help you build one. You can improve your site as your business grows.
Social media platforms like Facebook, LinkedIn, and Twitter are other platforms to engage with your customers. Depending on your business, some platforms might be more suitable than others.
Do the research and see what your competitors are doing and implement steps that will work best for your business with respect to digital marketing strategies such as paid ads and search engine optimization.
Setting up a business of your own can be overwhelming. But having a checklist that guides you one step at a time makes it less overwhelming and helps you in making progress. Having business advisors, accountants, or financial advisors can help you understand all the nitty-gritty of starting a business and get you going.
You may have a business idea that you are passionate about. To make it a reality, you need to make a plan, gather resources and skills, work out finances, find business partners, deal with legal matters and have a little bit of luck as things are unpredictable.
As they say in the startup world - "Learn Early, Learn Often."
Best NRE Accounts for NRIs Across the GlobeFor Non-Resident Indians (NRIs), managing finances across borders becomes essential, and having the right bank account is crucial. One of the go-to options is the NRE (Non-Resident External) account, designed to facilitate seamless money transactions and savings for NRIs.What is an NRE Account?An NRE account is a type of bank account for NRIs to maintain and manage their foreign earnings in India. The acronym 'NRE' stands for Non-Resident External, indicating that the funds deposited into this account are from overseas sources. NRIs can deposit foreign currency into an NRE account, and the balance and interest earned are freely repatriable, i.e., both the principal amount and interest can be transferred abroad without any restrictions.NRE vs. NRO AccountIf you are just starting to explore the options of NRI banking, you might have heard of NRO accounts. NRE and NRO (Non-Resident Ordinary) accounts are two distinct types of accounts catering to different financial requirements. While NRE accounts are primarily for repatriable income and earnings from outside India, NRO accounts are for managing income earned in India. Both account types serve NRIs' distinct banking needs, providing avenues for managing Indian and foreign income separately.What Makes a Good NRE Account?Several factors contribute to making an NRE account a preferred choice for NRIs:Repatriation Benefits: Opt for accounts that offer seamless repatriation of both principal and interest earned without any restrictions.Interest Rates: Look for accounts that provide competitive interest rates to maximize returns on your deposits.Convenience: Choose banks that offer easy accessibility through online banking platforms, especially for NRIs residing abroad.Customer Service: Opt for banks known for their reliable customer service and efficient grievance redressal for a hassle-free banking experience.Best NRE Accounts for US-based NRIs and Foreign-Based IndiansSeveral banks offer top-notch NRE savings accounts tailored to meet the diverse financial needs of NRIs. Here are some of the best NRE accounts available. To determine the best account for your needs, view a more detailed comparison of each bank’s interest rate, key features, and more on our CompareRemit NRE Account Comparison Site. ICICI Bank NRE Savings AccountA household name, ICICI Bank is a very popular and safe choice for your banking needs. It is the one most often chosen by NRIs.Key Features: Higher interest rates, zero balance requirement, online remittance services, and NRI-focused banking solutions.Learn more about ICICI NRI and to get started with your application. HDFC Bank NRE Savings AccountA competitive player in the field, HDFC Bank is known for its high interest rates and benefits for its customers. Key Features: Competitive interest rates, 24/7 online access, easy fund transfers, and a global presence.Yes Bank NRE Savings AccountYes Bank provides a unique feature which many NRIs find helpful, a personal relationship manager who can guide you through your questions and account needs. Key Features: Flexible interest rates, hassle-free fund transfers, a dedicated personal relationship manager is assigned to each account holder. State Bank of India (SBI) NRE Savings AccountAnother household name, State Bank of India is reputed for its reliable service and dedication towards keeping the process simple and easy for its customers. Key Features: Widest network, attractive interest rates, simple documentation, and multi-currency facilities.Kotak Mahindra Bank NRE Savings Account Kotak Mahindra Bank serves as an excellent choice for those looking for a service that will give you a reliable and a high interest rate wielding account. Key Features: High-interest rates, convenient banking services, and personalized solutions for NRI customers.Axis Bank NRE Savings AccountAxis Bank, previously known as the ever-reliable CitiBank, continues the staple practices that gave CitiBank its reliable name. This is a great option for those looking for a bank with years of experience and reliability. Key Features: Flexible deposit options, competitive interest rates, user-friendly online banking, and diverse financial products.Choosing the right NRE account depends on individual preferences and banking needs. Each of these banks offers competitive interest rates, online banking convenience, and excellent repatriation facilities suitable for NRIs managing finances from abroad.NRE accounts serve as an ideal financial solution for NRIs seeking efficient money management, seamless repatriation of funds, and tax benefits. By choosing the right NRE account based on individual preferences and banking needs, NRIs can effectively manage their finances and easily send money back home to their loved ones in India.
Diwali, the Festival of Lights, is a time of joy, celebration, and the exchange of gifts. As Diwali 2023 approaches, finding the perfect gift for your loved ones can be a delightful challenge. Whether you're running short on time or looking for thoughtful last-minute gift ideas for your sister for Bhai Dooj, we've got you covered. In this article, we'll explore the essence of Diwali, its significance, key dates, and suggest creative ways to send gifts using remittance services.What is Diwali? Diwali is a prominent Hindu festival celebrated with enthusiasm across India and among the global Indian diaspora. It symbolizes the victory of light over darkness and good over evil, with a rich cultural and spiritual heritage. A time full of vibrant rangoli, crackling firecrackers that light up the night, and aromatic food being passed around, Diwali spans five days of festivities, each with its own rituals and significance.Families illuminate their homes with diyas (oil lamps) and candles, create beautiful rangoli designs, and indulge in sweets and savories.Why is Diwali Celebrated?Diwali celebrates the victory of good over evil and light over darkness. It's a time to seek blessings for prosperity and happiness. The exchange of gifts during Diwali is a way to show love and appreciation for one another, enhancing the festive spirit.Key Dates for Diwali 2023:Dhanteras: November 10, 2023The first day of Diwali, dedicated to the worship of Lord Dhanvantari (the physician of the gods) and goddess Lakshmi. People buy gold, silver, and utensils on this day.Naraka Chaturdashi (Choti Diwali): November 11, 2023On this day, Lord Krishna defeated the demon Narakasura, signifying the victory of good over evil. It's a day of cleansing and lighting lamps.Diwali (Main Day): November 12, 2023The most important day when families come together to perform Lakshmi Puja (worship) and light oil lamps or diyas to illuminate their homes.Govardhan Puja: November 13, 2023A day to worship Lord Krishna, who lifted the Govardhan Hill to protect the villagers from torrential rain.Bhai Dooj: November 14, 2023A day to celebrate the beautiful bond between brothers and sisters, with sisters applying tilak on their brothers' foreheads.Last-Minute Diwali Gift Ideas1. Digital Gift CardsConsider sending digital gift cards from popular online retailers. These cards allow your loved ones to choose their perfect gift, ensuring they get something they truly desire. Many remittance services offer the option to send digital gift cards along with money transfers, making it a convenient choice for last-minute gifts.2. Money TransfersSending money home for Diwali is a practical and thoughtful gift. Online remittance services like Wise, Instarem, Abound, Xe Money Transfer, Wo Transfer, etc. offer quick and secure transfers, enabling your family to make Diwali purchases, decorate their homes, and prepare delicious meals. It's a versatile gift that allows your loved ones the freedom to use the funds as they see fit.To find which money transfer service is the best one for you, check out our catalog of reviews and guides, all designed to help you see the complete ins and outs of the many remittance services on the market to make the best decision for your needs. We invite you to compare remittance providers using CompareRemit’s comparison tool today to find the best rates, lowest fees, and fastest turnaround times for your specific destination and transfer amount.3. Subscription ServicesGift subscriptions to streaming platforms, magazines, or online courses. These subscriptions offer entertainment and knowledge, making them valuable and enjoyable gifts for your loved ones.4. Personalized Diwali HampersPut together a personalized Diwali hamper with traditional sweets, homemade treats, and small decorative items. Include a heartfelt Diwali card to add a personal touch. Sending a picture of the hamper along with a digital money transfer can be a delightful surprise for your family.5. Online Shopping VouchersOnline shopping vouchers from popular e-commerce platforms allow your loved ones to pick their favorite items. These vouchers can often be emailed directly, making them an excellent last-minute gift option.In the spirit of Diwali, the joy of giving is unparalleled. Embrace the true essence of the festival by spreading happiness, love, and prosperity. Even in the last minutes leading up to Diwali, these thoughtful and practical gift ideas ensure your loved ones feel cherished and valued. Utilize reliable remittance services to make these gestures of love possible, bridging the distance and connecting hearts across the globe.For all of your money transfer needs, visit our homepage for more information on how to find the best option for you and your family this Diwali. Here you will be able to compare exchange rates between the top remittance companies, find the best rates, learn how to get started, receive exclusive offers, and more. This Diwali, let your gifts illuminate the lives of your dear ones, just like the radiant glow of diyas brightens the darkest of nights. Happy Diwali!
When it comes to repatriating large sums of money from India, it puts every NRI in a situation where he has to consider different obligations regarding monetary cross-transfer. Taxation, reliability and transfer timelines are a few things that influence these decisions.Personal finances have to be dealt with delicately and ensured that there is no loss during the due process of remittances. There are various options available in the marketplace today, be it via traditional banking or the modern ways of online transfers.CompareRemit offers a platform that allows you to compare different players in the market and pick the best rates that suit your needs.Repatriation from an NRE AccountAs a component of the liberalization scheme of the Reserve Bank of India, remitting funds from India has become relatively easier. Balances in NRE (Non-Resident External) accounts are freely repatriable. No formalities or requisite permissions are required for remittances abroad be it any amount. Funds in accounts are usually funds deposited from abroad or current income like interest or dividends on investments made through foreign funds.Repatriation from an NRO accountBalances in NRO (Non-Resident Ordinary) accounts are subject to certain conditions. The remittance of USD 1 million per financial year from NRO accounts is allowed subject to certain procedural formalities. NRO account balances include income earned locally or certain capital account transactions. Form 15-CA and 15-CB need to be submitted before a remittance can go through.Read more on difference between NRE and NRO account on CompareRemit.The Traditional Option - BanksThe most sought after choice for remittances to the UK are banks. Banks are the most popular means of transferring money to the UK because:There is a high level of trust owing to the various government regulations.Familiarity and the comfort of knowing the neighborhood-friendly banker.There are two ways one could remit funds using banking services:Online - If your bank has given you access to internet banking and allows repatriation through online instructions.In-Person - One could walk into the bank yourself and have the formalities completed there and then and have the satisfaction of seeing it to its destination with a receipt in your hand.However, it is important to note that INR to GBP/GBP to INR exchange rates may not always be competitive. The transfer fees can be high and the charges, not always transparent.Selection of Remittance Service ProviderShould you want to avoid remitting through banks, approaching a marketplace of money changers would be the next best option. A selection of remittance service providers should be made based on the following:- Transfer chargesSpeed of transferExchange ratesCharges on the conversion of currency (INR to GBP)Freeze option on exchange rate while process requirements are completedFlexibility of payment optionsAlternative Options for Remittance from India to UKWise - UK based transfer service supporters - Wise incorporates credit cards/debit cards, SWIFT, international transfers to bank accounts, domestic wire transfers and more. Wise offers competitive exchange rates for pound to rupee or rupee to pound conversions. It assures fast and low-cost online money transfers from India to the UK.ExTravelMoney - One of the easiest services for transferring funds from India to the UK, they also offer the facility of booking orders online.Western Union - In four easy steps available online and your money is sent from India to the UK. They offer competitive rates and faster transfers as well.Thomas Cook - Provides the best foreign exchange rates besides giving the assurance of secure and timely remittances for specific purposes.BookMyForex - With zero commission and zero charges, they claim to send money from India to the UK at guaranteed lowest exchange rates. The time span for the transfers to be effective is 12 to 48 hours.To select the right money transfer service one should keep the cost and time factors in mind. Convenience at a reasonable cost should be the mantra for selecting a suitable remittance service provider.