⌛ Working as independant systems analyst / programmer - red tape ?

Hi,

I'm a european living in Europe and married to a pinay, working as a systems analyst / computer programmer for customers in several european countries; mainly I develop software for hospitals (dicom etc. related) and besides I do website programming in php / asp / java etc.

Here I do that as an independant consultant, I simply applied for a VAT number and started working, billing my customers and paying my income tax etc. in the country where I'm living.

With the idea to relocate some time to the Philippines, I would continue to work for the customers in Europe, and also continue to sell software products I developed these years. And maybe occasionally do some work for local (philippines) customers.

Can somebody give information about the red tape etc. involved to start working in the Philippines as a systems analyst / programmer focussed on the european market? Is it necessary to set up a formal business for that? Or can I simply apply for a tax number and start billing my customers?

I really couldn't find information about starting to work as a liberal professional in the Philippines, the official government sites are also of little help because most links are not working, besides I think they are more focussed on the shop/investment/call center/etc.-type business...

Thanks for any reaction or link that can help me....

Albert

 

I am doing much the same. I am a web developer working as a contractor for other developers in Europe. I work mostly in PHP and also work with a number of my own sites selling various products.

I am going to keep the U.S. as my tax home and live in the Phils as a perpetual tourist. This is probably all wrong, oh well. The Philippines has a really nice visa. You can stay here and keep extending your tourist visa up to a year (and longer in some cases) without having to leave the country.

I have no interest in doing anything locally but I may eventually hire a local and even setup a legit business here for some things.

People may be able to give you an idea here but the most obvious answer is to hire legal help to answer all your questions and to take care of the legal side of things when you are ready to start the business. You should probably also hire an accountant to get a more full picture on the best ways to handle the financial side as well.

 

hi

1) register in wifes name
2 forms and a 3 hour lecture to attend

2) register as a foreign investment company
$100,000 min dollar investment. 16 forms, can be very very cumbersome, a lawyer may actually be more work for u, than not using a lawyer. 6 years tax free

3) do not register. 2 friends wish they had chosen this route

if u are planning to employ staff, that is a big issue on negros, as there are no mid/high tech companies on the island, all the talented graduates go to cebu/manila. so consider cebu or have your skilled people work remotely.

best of luck in your venture. u will have a very high standard of living on european income levels

 

Could you elaborate on #3? That is the route I am leaning towards but it is interesting that you have friends who have taken the effort to go the legit route and regretted it later. Do you know why?

 

ok both went through the foreign business investment route. so everybody thought they had 100,000 to spend

primary frustrations were
1.) corruption relevant to a guy building banking software in manila(does not apply to all areas or departments). this is done in a very time consuming fashion. the issue of a permit, will happen alot slowed than stated. you and your representatives, have to go through the paper trail and antiquated communications system to a sufficient demoralizing degree, that you offer the bribe. bribery can really ruin your day. some westerners see the red mist and it is time for them to leave, but when a business application will fail because some mofo will not give a fire safety certificate because the new fire extinguishers are wrong(no explanation). this are quezon city but according to rumour a mid sized foreign owned data entry business, was shut down here last year because they would not pay the bribes others say bad staff or revenue

2.) paperwork is literally paperwork and has to be in a set format, that u are not familiar with. accountants are cheap, but still time consuming on your behalf. do not expect western standards.

3.) one guy just did not like the officials coming over to the office and gossiping to him for hours about nothing, when he had a deadline and they were months behind on their stuff. but he had to be polite and it happened all the time

4.) most of the problems with registering happen at the risky startup phase (staff not up to speed, manager/u not up to speed, communications, new business processes) and just add to the worry

you can employ people here on 6 month contracts or people online. if your business does not need a large team and there is no tax benefit, i do not think u should register immediately. startup see how things work out, get some good people together, then if it is successful and paradise has not turned tropo, tackle the registration process.

thedude - u should be able to get some decent php people here, it is by far the most popular programming platform. but do not take applicants on face value, test them thoroughly, some are western standard, alot do not have the inquiring or problem solving aptitude and have literally never read anything outside friendster, after university

best of luck

 

ok both went through the foreign business investment route. so everybody thought they had 100,000 to spend

primary frustrations were
1.) corruption relevant to a guy building banking software in manila(does not apply to all areas or departments). this is done in a very time consuming fashion. the issue of a permit, will happen alot slowed than stated. you and your representatives, have to go through the paper trail and antiquated communications system to a sufficient demoralizing degree, that you offer the bribe. bribery can really ruin your day. some westerners see the red mist and it is time for them to leave, but when a business application will fail because some mofo will not give a fire safety certificate because the new fire extinguishers are wrong(no explanation). this are quezon city but according to rumour a mid sized foreign owned data entry business, was shut down here last year because they would not pay the bribes others say bad staff or revenue

2.) paperwork is literally paperwork and has to be in a set format, that u are not familiar with. accountants are cheap, but still time consuming on your behalf. do not expect western standards.

3.) one guy just did not like the officials coming over to the office and gossiping to him for hours about nothing, when he had a deadline and they were months behind on their stuff. but he had to be polite and it happened all the time

4.) most of the problems with registering happen at the risky startup phase (staff not up to speed, manager/u not up to speed, communications, new business processes) and just add to the worry

you can employ people here on 6 month contracts or people online. if your business does not need a large team and there is no tax benefit, i do not think u should register immediately. startup see how things work out, get some good people together, then if it is successful and paradise has not turned tropo, tackle the registration process.

thedude - u should be able to get some decent php people here, it is by far the most popular programming platform. but do not take applicants on face value, test them thoroughly, some are western standard, alot do not have the inquiring or problem solving aptitude and have literally never read anything outside friendster, after university

best of luck

 

Thanks for taking the time to post that. It is unfortunate that problems like these are making businesses harder to start and likely contributing to unemployment. On the other hand, this entire process may still be easier for foreigners than doing the same thing in the U.S.

I would think there would be a good pool of people to choose from because of the universities. Maybe they don't stick around but if I were to get them before graduating then that might not be a problem. Also, I'm sure people in other areas of the Phils would be willing to relocate for the right opportunity.

I work exclusively with a remote team of developers but adding another person on the team is expensive and difficult (good people are hard to find.) Training is also difficult and time consuming. I think a lot of that difficulty would go away if I were to work with someone face to face. In the Phils, I could pay someone very well for a Philippine salary and still be saving some money.

 

Barramac, very good you give your input regarding past experiences.
For me it's very recognizable.
It's a hard and difficult process to follow with indeed a lot of frustrations (bureaucracy, corruption, delays ec...).
If you're a starter, just arriving in the Philippines, it's a jungle.
Can't believe that it is even worse in the States , TheDude.
I had a lot of luck to have some friends (with other friends ) to help me out.
Warnings to new starters (like Barramac is giving here) are are not superfluous.

 

I was surprised to read about the corruption in some of the replies. In my experience, if you are straight with them, they are straight with you. It may take longer, but I have only positive experience in Dumaguete.
If your wife can own the company, there are 3 basic steps to setting up a business.
1. Register a single proprietory company in DTI (Dept of Trade and Industry). It takes 2-4 weeks to get a company name approved. The local DTI office in Dumaguete is very helpful, also to guide you further. There is also an IT Industry Association in Dumaguete that is ready to help newcomers.
2. Apply for Business Permit. Your wife needs a barangay clearance and the marriage certificate. You may have to run between offices to get signatures and many are not always in their offices so expect to spend 2-3 weeks on this one.
3. Apply for BIR registration. It can take a month. Then have receipts printed. You will pay 3% tax of all income. If you are billing more than 1,5 mill. pesos in a year you have to register for VAT (12%), which replaces the sales tax.

So after a couple of months or three you are set up. If you want to start immediately just use your imagination. There are some good accounting companies in town, they prepare salary declarations, file to SSS, BIR and PhilHealth, and give you monthly reports on an Excel worksheet. What more will you need? All for less than 2,000 pesos per month.

Dumaguete has 4 universities and other IT schools/colleges. Put an advert in the local radio or TV, put up posters in student union halls and you will have a 100 applicants not wanting to leave town. The big job is to select the good ones. If you find them expect to pay 20,000 pesos per month or more to make them stay with you. Do the management yourself in the beginning, until you find the right person to do it.

Hope this can encourage you to go ahead. They need more of your kind in Dumaguete.

 

hi

thedude

from my understanding local php people with a few years experience get around 8-15,000, but work at a relatively low level. you will be surprised how much job vacancies are word of mouth, but i had my best luck posting on message boards, print advertisements had no replies. i think that u would need to get experienced people that want to return from a metro area (personally i am of the belief for a mid/high level project a talented programmer, is worth hundreds of graduates, especially if you are extending or debugging a php framework)

i was personally looking for c#, asp.net, flex and sql server and really had to go the remote route for experience, with a few enthusiastic graduates here as trainees. i was offering 25-40k(head of silliman makes 35) for asp.net or c# and could not find them on negros, but they will happen in time, with word of mouth. i would have been inundated if we were located in cebu

best of luck mate