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Running a business in Phil's

Discussion in 'Banking - Investing - Finances' started by Ozzyguy, Jul 24, 2020.

  1. Ozzyguy

    Ozzyguy DI Forum Adept

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    After a bit of advice on running a business from the Philippines.

    I own a small wholesale business in Australia. I ship products direct from China and Thailand to our clients in a few country's. Its a part time gig but a good retirement business. The business is 100% online, I dont need a physical address or storage.

    Currently the business is registered in Australia.

    I am considering registering this business in the Philippines and leaving any profits in the Philippines for when I retire in a few years.

    Is there any advantages in running this from the Phils? tax mainly plus getting ready for the move. Can you register a business if not a current resident?
    My wife is Filipino but Aust resident.

    Thanks,
     
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  2. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    Is this drop-shipping?

    I am not qualified to answer your question but will make the point not to put all your eggs in one basket - especially in the current financial climate. If possible, keep some resources in your home country and not move it all into a country where it could be 'borrowed' by government with no recourse to law (takes too long and aliens count for zilch). Also, the issue of currency rates is worth thinking about viz-a-viz AUD and PHP (but a complete unknown).
     
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  3. OP
    OP
    Ozzyguy

    Ozzyguy DI Forum Adept

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    Thanks for the reply, no we dont drop ship but I would if it was bigger volumes.

    We buy and sell stock in USD, the business really hasn't got a lot of assets and its a kick off from my main business that I will be selling soon. Its just a part time business to help keep me sain when I retire. :smile: If it turned to sh#t it wouldnt matter.

    I guess its really the tax side of things that would be a benefit if any.
     
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  4. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    Best never to make a business decision based on one aspect - what you gain on low taxes may be lost in other ways. Bit similar to those who remit money with a particular company because the fees are low - and don't look at the exchange rate.
     
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  5. Jens K

    Jens K DI Senior Member

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    I wouldn't do it.

    Taxes are not particularly low here as far as I know, and the whole bureaucracy, inefficiency and corruption puts me off. Certainly there are better options if you wish to move the business out of your home country, with regard to taxes and otherwise.

    For a business not requiring any physical presence, there is really no good reason to move it here. Hong Kong comes to mind (low or even no tax if you qualify as offshore business), or Estonia, where corporate taxes aren't particularly low but you only pay them when (and if) you distribute your earnings as dividends. Estonia is exemplary when it comes to running a business completely remote, once you got their e-residency everything can be done online. Hong Kong is a bit more old school, lots of paperwork and requires having some secretary there, but there's agencies taking care of this.

    Also, as was said before, don't put all eggs in one basket. Good thing to have legs in more than one country.
     
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  6. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    I'm doing that - ain't half hurting my tackle though!
     
  7. Henry__

    Henry__ DI New Member

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    Guy, He said it's a side income. So the rule "don't put all eggs in 1 basket" doesn't make any sense here.

    This does sound DropShipping to me. I've been doing it for years without any registration.
     
  8. Pedro

    Pedro DI Senior Member Veteran Navy

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    I am not entirely sure about the register a business part but you may want to register it at a relatives address. The trouble I have been having is with Philippine bank accounts. I had money in a saving and money market accounts but because I could not be there and had gaps of several years my accounts went dormant. I am sure I lost all of the money in the savings account and had been working with someone at the bank but after I sent a ton of paperwork to get the account reopened, nothing, no more correspondence with the account rep. I suppose I will have to wait until I can return to get this straightened out.

    Unless you have a representative on the ground that you trust or that has business savvy it may not be worth registering a business in the Phils. I am looking at possibly an import/export business to keep me occupied and give me a business reason to commute between our two countries so I am always interested in considering or developing potential new streams of income.
     
  9. SkipJack

    SkipJack DI Senior Member

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    I don't know.
    Why do you feel the need to register in the Phils?
    What are you trying to avoid in your home country?

    If you treat it as personal income then there is no tax in the Philippines because it is "foreign-sourced". (Deliveries to countries other than the Phils) On the other hand if you incorporate in the Phils then the corporation will be taxed based on world wide income.

    There is a territorial system of taxation for foreign corporations and individuals, as well as non-resident citizens. Only Philippine-sourced income is subject to Philippine taxes for the latter. Corporations incorporated under Philippine laws and resident citizens are subject to income tax on their worldwide income.

    https://oxfordbusinessgroup.com/ove...ax-laws-applicable-individuals-and-businesses

    If you want to pile up tax free profits in another country without paying income tax then there are other countries that are better than the Phils for doing this.
     
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