March 14, 2014 | Valerie Wong
Before establishing your business in the Philippines, foreigners should know the following. First, they can't own land in the Philippines. Second, during court cases, the judge (no jury) tends to favor the local side instead of the foreign party as a matter of policy. Third, all of these rules are written in the 1987 Philippine Constitution. Even though there have been moves by lawmakers to revise the constitution, there's an even stronger opposition to keep it as is, mostly because many Filipinos fear what had happened the last time the constitution was changed prior to the 1987 one (that is, during the Marcos dictatorship and the Martial Law years).
Regarding Philippine Startups and What You Should Know
In other words, if you're a foreign investor or entrepreneur and you're waiting out changes to the constitution in order to have a more favorable deal when it comes to land ownership and whatnot, then it's best that you shift your focus into other endeavors. With that said, investing in the Philippines isn't necessarily an impossibility of sorts despite those hurdles. All you really need to do is follow Marketing 101 in terms of branding your products and defining your corporate identity—but do so under the Filipino culture context. Fortunately, among all Asian countries, the Philippines is among the most Westernized.
Even if you're American and the Philippines is considered Americanized in a manner of speaking, it's not that simple to appeal to them. Here's the deal. What you can get away with in U.S. television commercials (calling a product by name and insulting it) is seen as a sign of arrogance by Filipinos. They're people that are more emotional, so in order to appeal to them, you need to tug into their heartstrings more in order to get to their purse strings. Instead of merely highlighting benefits and specs, tell them what's in it for them and how they can emotionally identify with your product.
What All This Means in Terms of Your Small Business Opportunities
Making a living on Filipino shores involves taking advantage of the geography (it's an archipelago, so you can go about establishing tourism ventures involving resorts, beaches, and the like). Small business creation for the Philippines typically involve photography, affiliate marketing online, electronics distribution, personalized t-shirt printing, hotel and restaurant businesses, beauty parlor or barber shop businesses, CAD plotting, Information Technology, outsourcing of call centers, fruits and vegetable groceries, laundry and dry cleaning, shoe and bag repair, cellphone credit loading, ecommerce, dry goods, (Filipino) street food, rice retail, pandesal (bread) sales, food cart business, meat shop, and distribution of imported goods.
In regards to the Westernized part of the equation, wherein Filipinos are more than willing to try out imported goods that aren't locally available, you're in luck. Part of the reason why the constitution is written the way it is, comes from the fact that Filipinos do tend to favor imported goods and services, such that the law can help curb that enthusiasm and encourage local patronization. McDonalds, Pizza Hut, Benetton, Polo, and Dell are among the successful foreign companies established in the country, and you can make your own startup follow their example.
Do you want to start a Philippines-based business? Then let Servcorp help you with its virtual office and business registration solutions. It's one of the most trustworthy of companies out there when going about Filipino startups.