March 28, 2023
Why is the Philippines Ideal for International Business in 2023?
The Philippines is ideally situated to serve as a hub for establishing international business because of its advantageous Southeast Asian location and secure economic system. The nation also has one of the largest economies in the Association of Southeast Asian Nations and a growing customer base with rising purchasing power (ASEAN).
Organizations nowadays acquire serviced offices for day-to-day operations when starting an entrepreneurial milestone, whether local or international businesses in the Philippines. But before looking for business space, including a virtual office, private space, and co-working space, let us delve into the opportunities to establish international businesses in the Philippines in 2023.
With rising urbanization, a sizable and younger population, and a growing middle class, the Philippines’ economic vitality is based on strong consumer demand, backed by rising real earnings and steady remittances.
Here are the key advantages of why the Philippines is an excellent place to start an international business:
As mentioned earlier, the Philippines has its competitive advantage regarding location. Situated in the heart of Asia, the Philippines can be a gateway for international shipping and aircraft, ideal for European and American firms, providing access to more than 500 million consumers in the ASEAN region.
The workforce is among the Best
Another reason why the Philippines is the best next international business hub is the workforce is among the best. When establishing a business, it is important to assess the talents and attitudes of the workforce.
Fortunately, Filipino employees consistently rank among the top performers in foreign firms. The Philippines’ status as a global leader in outsourcing is the main explanation behind this. Over 800 Business Process Outsourcing (BPO) businesses may offer dependable and qualified staff to foreign companies from the nation.
Most Filipinos are also used to working in serviced offices, co-working spaces, and even virtual spaces that entrepreneurs obtained for outsourcing.
The recent government administration invested immensely in developing the infrastructure of the Philippines to encourage foreigners to start an international business in the country. Being an archipelagic country, the Philippines is now connected to every island for easy business and communication.
In addition, the increasing number of farm-to-market roads has eased the country’s food availability. With this, the inflation is being managed to guarantee that the workforce of the Philippines is getting adequate food supplies for their household.
Apart from roads, offices in the Philippines are now developing as well. The increasing demand for freelancing in the Philippines has brought opportunities for a serviced office, co-working space, private space, and virtual office to thrive.
With this, entrepreneurs planning to start international businesses in the Philippines will not be challenged in looking for working spaces for their business operations.
Tax Relief, Exemptions, and Business Incentives
Most importantly, the Philippines is the best country for establishing international business because of the tax relief, exemptions, and incentives that the country offers. Check out the recent benefits of establishing an international business in the Philippines:
- A four-year tax holiday for non-pioneer companies and a six-year income tax holiday for pioneer companies.
Note: The six-year income tax exemption, however, is only available to non-pioneer enterprises if they are based in an underdeveloped region of the Philippines. Taxable income is further reduced by further deductions for infrastructure and labor costs.
- Fiscal Incentives of the Philippine Economic Zone Authority:
- Income Tax Holiday (ITH) of up to six years
- A special tax rate of 5% of gross income after ITH and exemption to pay all national and local taxes.
- Tax-free and duty-free importation of machinery, raw materials, and equipment
- VAT zero-rating of local purchases of goods and services
- Exemption from wharfage dues on import shipments of equipment
- Exemption from expanded withholding tax
- Non-fiscal incentives
- Simplified import-export procedures
- Employment of non-resident foreign nationals in supervisory, technical, or advisory positions
- Special Non-Immigrant Visa with multiple-entry privileges
- Extended visa assistance to foreign nationals, their spouses, and dependents
Low-cost Yet Progressive Economy
The Philippines’ economy is among the fastest growing at the quickest rate in the Southeast Asia Nations. The performance of the Philippine economy in 2022 will likely expand far faster than the government’s aim of 6.5% to 7.5%.
The robust industrial sector, a healthy banking system, and record-low unemployment significantly contributed to the good economic growth of the Philippines. Aside from the progressive economy, the Philippines is the best country to invest in for international business for its low-cost business environment.
In relation to developed countries, everything will be less expensive, including purchases of commercial establishments and job compensation rates. That could be one of your motivators for starting a business in the Philippines if you already know that. The country’s logistics channels should also benefit from the low-cost economy, especially given how important the Pacific Ocean is to cargo and aircraft routes and the ongoing infrastructure development.
Booming Real Estate Industry
The promising real estate industry is another opportunity to start an international business in the Philippines in 2023. There is no denying that this is the best course for investors to pursue, given the Philippines’ outstanding tourism potential and expanding infrastructure.
Whether residential or commercial properties, opportunities in the real estate industry are promising when you are planning to start a local or foreign business in the Philippines. Rural development has been rampant in the country, which also contributed to the booming real estate industry.
Respectively, the following are the opportunities from the real estate industries:
- Emerging of various Real Estate Investment Trusts in the Philippines
- The increasing population venturing into house flipping
- Diversification of REITs, including renewable energy REITs
- Innovating serviced offices, including co-working spaces, private spaces, and virtual office
Cotoha Real Estate Philippines is a comprehensive real estate consulting business in Manila, Philippines, a growing market for creating new businesses. It offers clean, safe, and affordable serviced offices in BGC, Taguig, a central business district in Metro Manila.
If you are looking for a great place for your business to focus and thrive here in the Philippines, Cotoha Real Estate is the ideal place to work with your business goals.
Start Your International Business in the Philippines
The advantages we discussed may motivate you to establish a business in the Philippines, but you’ll discover that outsourcing firms will be your entry into the cutthroat industry. You’ll discover that your investment in the Philippines was worthwhile once you set up your expansion plans.
With your business growth plans, Cotoha’s exquisitely designed serviced office spaces are fully equipped and accommodate teams of any size, allowing you to concentrate on expanding your business without interruptions.