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 Where
is the Philippines?
What
awaits IT and e-commerce investors in the Philippines?
How's
the state of telecommunications in the country?
How's
the power situation?
Is the
cost of doing business high?
Will I
be protected from software piracy, computer hacking and other cyber crimes
in the country?
What
quality of life can my family and I expect in the Philippines?
Are
foreign investors allowed to own 100% of a business entity?
What are the basic rights and guarantees given for the safety of foreign investments?
What incentives does the government give to foreign locators?
As an investor, what visa can be issued?
Which multinationals are already operating in the Philippines?
The Philippines is an archipelago of more than 7,100 islands is Southeast Asia. It is linked to North America by the Pacific Ocean on its east, which makes it the gateway of the West to Asia. To its north is Japan, Hong Kong, Taiwan and South Korea; to its south, Singapore, Malaysia, and Indonesia; and to its west, Thailand.
Investors in IT and e-commerce will find a wealth of incentives and options that suit their specific corporate vision, all set up to achieve the Philippine government's objective to make the Philippines Asia's e-services hub. Policies and systems are in place, and the infrastructure and resources, packaged in pioneering IT parks, for successful e-business in the Philippines are ready for the taking.
Landmark legislation such as the E-Commerce Act and its implementing rules and regulations have been enacted in record speed - making the Philippines one of the first countries in the Asia-Pacific to concretize the commitment to pushing the knowledge economy and to provide a total environment for investors and entrepreneurs in e-commerce.
Since the telecom industry's liberalization in 1993, tremendous growth has taken place. Phone lines are now easily available in key economic areas nationwide, and Metro Manila is widely digitized. High-speed fiber-optic backbones and international gateway facilities are among the minimum standards set for facilities in special IT parks all over the country.
Cellular phone service has penetrated the grassroots level to the point that the Philippines is now the "text (or short messaging system) capital of the world" and is positioning to be the 3G capital of the world as well. Videophone services are available in call centers of the leading carrier, and the country now also has a powerful international communications broadcast satellite.
It's now adequate in key economic areas nationwide. Foreign locators are particularly assured of clean, uninterrupted power supply in IT parks throughout the country.
Foreign companies that are now outsourcing programming and business processes to the Philippines estimate 30 to 40% business cost savings; call center services, 15 to 30%; and application systems and software development, 35 to 50%.
Yes, the Philippines has an intellectual property law that classifies computer software as literary work and penalizes infringement and counterfeiting. The private sector is very vigilant when it comes to its enforcement, getting the National Bureau of Investigation (NBI) actively involved all the way to the Presidential Inter-Agency Committee on Intellectual Property Rights. Recently signed into law was the Electronic Commerce Act of 2000, which legalizes online transactions, signatures documents and penalizes cyber crimes.
The Philippines is the best Asian country in overall quality of expatriate life, according to the March 2000 survey of Hong Kong's Political and Economic Risk Consultancy (PERC). It ranked third of all countries surveyed, next only to Australia and the U.S. - and was ahead of Singapore and Japan. Rated highly were its cultural compatibility with expatriates, its nightlife, its housing, sporting and recreational facilities, and the quality of healthcare and schools in the country.
Yes, except when the business in question is a financial institution, a mass media entity, an advertising agency, a real estate company, a public utilities firm, or a defense-related concern. (The full list of exemptions is available from the Philippines's Board of Investments).
All investors and enterprises are entitled to the basic rights and guarantees provided in the Philippine Constitution, such as:
• Right to Repatriation of Investments
• Right to Remittance of Earnings
• Right to Foreign Loans and Contracts
• Right to Freedom from Expropriation
• Right to Non-Requisition of Investment
• Income tax holiday (ITH) or exemption from corporate income tax for four years, extendable to a maximum of eight years.
• After the ITH period, the option to pay a special 5% tax on gross income, in lieu of all national and local taxes.
• Exemption from duties and taxes on imported capital equipment, raw materials and components, spare parts and supplies.
• Permanent resident status for foreign investors and immediate family members.
• Employment of foreign nationals.
• Domestic sales allowance equivalent to 30% of total sales.
• Other incentives under the Omnibus Investment Code
The Special Investor Resident Visa (SIRV) entitles the holder to reside in the Philippines for an indefinite period as long as his investment subsists. Any alien, except restricted nationals under the Foreign Service Code, may apply for an SIRV provided he meets the following requirements:
America Online, Accenture, Barnes & Noble. Bechtel, Caltex, Citibank, Complete Business Solutions Flour Daniel, James Martin, Procter & Gamble. Alitalia, International Red Cross, SGS, Chiyoda, Mitsubishi, Omron, Sumitomo Corporation and 30 other Japanese companies are just some of the multinationals that are outsourcing their software applications development and business processes (technical support, billing, accounting, inventory management, online ordering, engineering design, human resources, management, and others) to the Philippines. Many more have already expressed interest in doing the same.
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