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Philippines and taxes

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I keep seeing Philippines being mentioned in here as a good place to setup a company using SIRV, but I haven't seen any reasons why from a tax perspective.

What is it that makes it a good place to setup an offshore company? It looks like corporation tax is currently 25%, and that the withholding tax on dividends is also 25% there, so I'm trying to work out what makes it attractive as there must be something I'm missing.
 
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I keep seeing Philippines being mentioned in here as a good place to setup a company using SIRV, but I haven't seen any reasons why from a tax perspective.

What is it that makes it a good place to setup an offshore company? It looks like corporation tax is currently 25%, and that the withholding tax on dividends is also 25% there, so I'm trying to work out what makes it attractive as there must be something I'm missing.
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Furthermore, SIRV is very often used by younger adults that are not elible for SRRV.
Reason: There is no need to setup a company. A simple investment in a PSE listed company will do the trick.
 
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Tax rates are different in these zones. Start at about 3%, depending on zone.

Furthermore, SIRV is very often used by younger adults that are not elible for SRRV.
Reason: There is no need to setup a company. A simple investment in a PSE listed company will do the trick.
Peza has a lot of requirements and you need to have an office in an accredited peza office building, which often doesn't come very cheap.

Corporate tax isn't competitive unless you indeed register as a Peza company.

The advantage of Philippines is the lower salary level and the pool of skilled people to outsource positions that speaking fluent English.

Personal foreign income is not taxed, there is no CRS reporting and its easy to open USD accounts, which offers some options.

For offshore business I would look elsewhere, beside non competitive taxation and social contributions, the administration and business license renewal require annually a lot of back and forth between several departments.
 
I keep seeing Philippines being mentioned in here as a good place to setup a company using SIRV, but I haven't seen any reasons why from a tax perspective.

What is it that makes it a good place to setup an offshore company? It looks like corporation tax is currently 25%, and that the withholding tax on dividends is also 25% there, so I'm trying to work out what makes it attractive as there must be something I'm missing.
The Philippines government won't care about collecting your taxes if you hire Filipino people, nor will they be able to organize themselves sufficiently to collect your taxes in most cases, especially if you bribe someone. I would never go there, though, I can tell from my own experience that it is a corrupt hell-hole and that the person with the most money always wins. And once you have people on the pay-roll, they always come back for more. If you ever get into a dispute with someone who is Filipino and has 25% or more of the wealth you have, you better be strapped as can be to make sure you won't get fucked in every position imaginable. The moment you fear not being allowed on your plane to leave the country, you know you are in the wrong place.
 
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The advantage of Philippines is the lower salary level and the pool of skilled people to outsource positions that speaking fluent English.

This is one of the reasons I'm looking at in. I live in Taiwan but new CFC rules mean if I have a low-tax offshore company, it will be liable for tax in Taiwan unless I can show the company has proper operations aboard (i.e. employees). I thought Philippines could be good for this as you could pay employees a very low price. Also because Philippines would give you a proper business bank account rather than a fintech one.

The moment you fear not being allowed on your plane to leave the country, you know you are in the wrong place.
Why would I fear that?
 
This is one of the reasons I'm looking at in. I live in Taiwan but new CFC rules mean if I have a low-tax offshore company, it will be liable for tax in Taiwan unless I can show the company has proper operations aboard (i.e. employees). I thought Philippines could be good for this as you could pay employees a very low price. Also because Philippines would give you a proper business bank account rather than a fintech one.


Why would I fear that?
No reason in particular, it's just a wild place in my opinion. If someone is after you for whatever reason, they can easily bribe people working at the airport. It's just that kind of place. It's more of a peace of mind thing, I can withstand corruption, but it reaches eye-watering levels in PH.

Also, the problem with Filipino workers is that a lot of them just run off after some time. It is relatively hard finding high-quality workers, and if you do find them, they are also always at risk of leaving out of nowhere. If you are looking for customer service employees, keep in mind that they can just be MIA for weeks or months. It's a common issue there. Since it is still a very conservative society, the girls all want to get married ASAP which means they will quit their job. I've even seen girls join the church to become a nun.

A lot of Filipino don't even have a bank account, so you have to get cash and pay them, and you have to sort out the bills. The entire place is a headache in my opinion, plus the Western “entrepreneurs” in some cities are mostly scammers (the French there are infamous) and the food is not the best, especially not for Asian standards. If you are into spices forget about them, you will live in a country that tries its best to be like America and being able to afford McDonald's is a token of prestige.

If you are purely offshore, I don't know and would not be able to comment on that, but I think there are better options out there. I believe PH is also on a sizeable amount of blacklists, but since you are Taiwanese, I am out of scope here.
 
No reason in particular, it's just a wild place in my opinion. If someone is after you for whatever reason, they can easily bribe people working at the airport. It's just that kind of place. It's more of a peace of mind thing, I can withstand corruption, but it reaches eye-watering levels in PH.

Also, the problem with Filipino workers is that a lot of them just run off after some time. It is relatively hard finding high-quality workers, and if you do find them, they are also always at risk of leaving out of nowhere. If you are looking for customer service employees, keep in mind that they can just be MIA for weeks or months. It's a common issue there. Since it is still a very conservative society, the girls all want to get married ASAP which means they will quit their job. I've even seen girls join the church to become a nun.

A lot of Filipino don't even have a bank account, so you have to get cash and pay them, and you have to sort out the bills. The entire place is a headache in my opinion, plus the Western “entrepreneurs” in some cities are mostly scammers (the French there are infamous) and the food is not the best, especially not for Asian standards. If you are into spices forget about them, you will live in a country that tries its best to be like America and being able to afford McDonald's is a token of prestige.

If you are purely offshore, I don't know and would not be able to comment on that, but I think there are better options out there. I believe PH is also on a sizeable amount of blacklists, but since you are Taiwanese, I am out of scope here.
Thanks. I have actually been to the Philippines quite a few times before, and I do know it has a lot of problems, many of them borne out of poverty. I wouldn't like to be someone living there who openly shows off their wealth, but I honestly think when it comes to the general population, they're some of the most welcoming and approachable people I've ever encountered.

Also, I'm looking at places more as an offshore setup where I wouldn't need to be there much, rather than having a proper base of operations there.

but since you are Taiwanese, I am out of scope here.
I'm not Taiwanese, I'm European, I just live there.
 
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Thanks. I have actually been to the Philippines quite a few times before, and I do know it has a lot of problems, many of them borne out of poverty. I wouldn't like to be someone living there who openly shows off their wealth, but I honestly think when it comes to the general population, they're some of the most welcoming and approachable people I've ever encountered.

Also, I'm looking at places more as an offshore setup where I wouldn't need to be there much, rather than having a proper base of operations there.


I'm not Taiwanese, I'm European, I just live there.
Then the Philippines might work for you, not sure how you would go about proving substance or tax-paid to Taiwan though if you are not paying anything in PH (unless you want to just bribe someone for the document, which will not be too difficult).
 
Not
No reason in particular, it's just a wild place in my opinion. If someone is after you for whatever reason, they can easily bribe people working at the airport. It's just that kind of place. It's more of a peace of mind thing, I can withstand corruption, but it reaches eye-watering levels in PH.

Also, the problem with Filipino workers is that a lot of them just run off after some time. It is relatively hard finding high-quality workers, and if you do find them, they are also always at risk of leaving out of nowhere. If you are looking for customer service employees, keep in mind that they can just be MIA for weeks or months. It's a common issue there. Since it is still a very conservative society, the girls all want to get married ASAP which means they will quit their job. I've even seen girls join the church to become a nun.

A lot of Filipino don't even have a bank account, so you have to get cash and pay them, and you have to sort out the bills. The entire place is a headache in my opinion, plus the Western “entrepreneurs” in some cities are mostly scammers (the French there are infamous) and the food is not the best, especially not for Asian standards. If you are into spices forget about them, you will live in a country that tries its best to be like America and being able to afford McDonald's is a token of prestige.

If you are purely offshore, I don't know and would not be able to comment on that, but I think there are better options out there. I believe PH is also on a sizeable amount of blacklists, but since you are Taiwanese, I am out of scope here.
Not sure where you operated a business or have lived, but I wouldn't portray Philippines that negative. Sure there is a lot of corruption (which can also be sometimes beneficial) and I wouldn't trust doing business with a Filipino, but as employees with the right setup and culture, you can run a good business with competent people.

Filipinos easily quit their job and going AWOL is common practice in the BPO industry, but with the right corporate culture, setup and the right people in key positions those situations almost never happen.

We have been through all of them, locals trying to hijack the business, awol, people trying to destroy your business, Dole (labor department) complaints.

Setting up a business in any country comes with different challenges and key is to understand the culture and their priorities. Filipinos are family oriented and trust sometimes more their emotions than facts, whether you like that or not. If you cant put these values in your local corporate culture you will keep facing challenges. You don't have to do this yourself, you let some people you can trust do that.

You can as anywhere decide to setup a business and not to pay taxes or employ legally, it depends how you want to conduct business and the risks you would like to take. If you are not in the Philippines there is little risk with the exception some employees run away. But if you decide to reside in the Philippines and want to avoid getting black listed, as well set up business accounts you better just follow the rules, pay the contributions and some limited taxes and keep your profits offshore in Hong Kong, Singapore, US. If people are not on the payroll and don't have social security contributions paid or other benefits, they will only work for you for the money and will feel little affiliation with the company. Even they have limited resources and money is important, as soon as they feel mistreated in a company without established, culture they will just disappear with the company laptop or extort money by threatening to report you to Dole.


Philippines is a good country to setup and offcide your back office operations, but you will need to be on the ground and need time to understand their values, and probably go first through a few bad experiences.

For offshore operations I doubt this is the right country, that's UAE, HK, Singapore,..

So by "skilled people" we are talking about cheap wage labor slaves?
Not really. You can find highy educated accounting people, engineers, IT (though challenging to find good ones), marketing, managers, HR.. and ofcourse customer service

You will have to pay them a decent salary (manager level can be 1600+ usd a month) and it takes some time to recruit the right people. Although all is relative, our current staff in Philippines are more skilled than those we employed in Europe, China,..

Definitely you can find high educated, skilled people in Metro Manila and sometimes Cebu.
 
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Not sure where you operated a business or have lived, but I wouldn't portray Philippines that negative. Sure there is a lot of corruption (which can also be sometimes beneficial) and I wouldn't trust doing business with a Filipino, but as employees with the right setup and culture, you can run a good business with competent people.
Exactly.

Setting up an offshore business or outsourcing in Asia, particularly in countries like Philippines, Malaysia (I have companies in Labuan and KL and I face these issues all the time), and Indonesia can be a valuable proposition if done correctly. However, it is crucial to be aware of the various cultural, political, and work ethic issues that may arise in these countries. When it comes to the IT and customer service industries, it is imperative to understand the local lingo, values, and priorities.

Hiring local, talented individuals for key positions, such as HR, can be a great way to navigate these challenges. These individuals are well-versed in the local culture and will be better equipped to handle any issues that may arise. Finding such individuals may require some effort, but it is worth it in the long run. Utilizing local talent will help build a strong corporate culture, foster better relationships with employees, and minimize the risk of unexpected events such as labor disputes or employees quitting unexpectedly.

this is specially true when it comes to IT and customer service, because it is important to find individuals who have the right technical skills and are also capable of adapting to different cultures and languages, because a deep understanding of the local culture and language will go a long way in building trust and providing excellent service.

and as you already noted, in the Philippines, family values play a significant role in people's lives, and they tend to prioritize emotional trust over factual information. So, As an offshore business owner or manager, it's crucial to understand these cultural differences and incorporate them into your corporate culture to avoid potential challenges.

In conclusion, while setting up an offshore business or outsourcing in Philippines or anywhere in Asia comes with its own set of challenges, it can also be a great opportunity for companies to tap into the vast pool of talented individuals in these countries. The key is to understand the local culture, hire local talent, and be prepared for any issues that may arise. With the right approach, outsourcing in the Philippines can be a valuable proposition for businesses looking to expand their operations and tap into new markets.
 
I
No reason in particular, it's just a wild place in my opinion. If someone is after you for whatever reason, they can easily bribe people working at the airport. It's just that kind of place. It's more of a peace of mind thing, I can withstand corruption, but it reaches eye-watering levels in PH.

Also, the problem with Filipino workers is that a lot of them just run off after some time. It is relatively hard finding high-quality workers, and if you do find them, they are also always at risk of leaving out of nowhere. If you are looking for customer service employees, keep in mind that they can just be MIA for weeks or months. It's a common issue there. Since it is still a very conservative society, the girls all want to get married ASAP which means they will quit their job. I've even seen girls join the church to become a nun.

A lot of Filipino don't even have a bank account, so you have to get cash and pay them, and you have to sort out the bills. The entire place is a headache in my opinion, plus the Western “entrepreneurs” in some cities are mostly scammers (the French there are infamous) and the food is not the best, especially not for Asian standards. If you are into spices forget about them, you will live in a country that tries its best to be like America and being able to afford McDonald's is a token of prestige.

If you are purely offshore, I don't know and would not be able to comment on that, but I think there are better options out there. I believe PH is also on a sizeable amount of blacklists, but since you are Taiwanese, I am out of scope here.
I would also like to react to the statement that most Filipinos don't have bank accounts. This is true for many of those that are uneducated and live in the province, in the bigger cities everyone has a bank accoun unless the intention is to employ the uneducated people that live in slums or on the street.

The local food in Philippines compared to other neighboring countries is definitely below par. But you have a multitude of high standard international restaurant options (Korean, Japanese, Chinese, Italian, French,..) as well as French bakeries and supermarkets where you can find all Western. Again this is in the big cities, if you live in the country side it doesn't need a drawing to explain that you won't find those there.
 
How many days you have stay in Philippines a year with SIRV to get tax residency?