Before commencing any business in the Philippines, one must be aware of all the requirements to meet before starting their operations. This includes acquiring a business permit and complying with other laws and regulations.
First, an investor or enterprise must comply with the following post-establishment compliances for local investors in the Philippines:
You must comply with registration and licensing requirements in terms of your business or company name for registration or licensing. In the Philippines, a company is allowed to use a name that does not violate Philippine laws, which include but are not limited to, reserved names for government use, confusingly similar names to registered trademarks already in existence, words from the Constitution such as public order, public policy, public morals, etc., names contrary to law or morals, insulting words or symbols. A minimum net worth is also required for you to be able to put up a business in the Philippines.
The next compliance is salary fixation, which means you need to put up a company and make sure that Philippine labor laws pay your employees. According to the Department of Labor and Employment (DOLE), an employer must pay their employee at least once every two weeks or twice a month at intervals not exceeding 16 days.
In addition, no payment shall be made unless it is accompanied by all the mandated deductions and contributions. To comply with SEC requirements, the best thing to do would be to have your business website. You could also publish your SEC ITRs on your website so that your investors know you comply with the SEC.
You also need a manual or computer-based accounting system to file an annual general information sheet, also known as a general ledger and the income tax return (ITR). Moreover, it is best to hire an accountant who has a license from the Professional Regulation Commission. After all, only registered accountants may perform audits under Philippine law.
Accounting records must be prepared within two months after the close of each taxable year. However, if financial statements are required for external purposes, they must be ready earlier than this time limit. The final record should include financial statements and related notes.
Tax Identification Number
In addition, you must have a tax identification number from the Bureau of Internal Revenue. Furthermore, if your business is involved in home construction or renovation, you must obtain an additional registration from the Home Development Mutual Fund (HDMF) or Pag-IBIG.
Lastly, it is important to have a local address in the Philippines for your office and retained earnings account. The best way is to have a virtual office that will allow you to get a local address without having a significant investment in property and time.
Keep these simple rules in mind when starting up a business. Without them, not only would your company be penalized by the government, but there could even be other legal actions against it. The post establishment's compliance can assure liability for a local investor in the Philippines.