Atty. Rami Hourani
In order to be an exporter in the Philippines you need to take care of the following:
- Registration Requirements
- Remittance Requirements
- Check Incentives
- Export Documentation
- Product Specific Requirement
Disclaimer: This article quickly glosses over legal topics in the interest of conveying concisely the requirements. It is in your interest to consult a lawyer before undertaking to comply with these requirements on your own.
The author of this Article would like to extend sincere appreciation to Fred Escalona, Executive Director of PhilExport-Cebu Chapter for assisting in providing the information found in this article. In order to find out more about PhilExport and its services, click here.
In the Philippines three kinds of entities may apply for an Export License. These are a sole proprietorship, partnership, or a corporation. A sole proprietorship can be made with DTI. A partnership or corporation can be formed in the SEC. It is a misconception in the Philippines that you need to be a corporation to be engaged in a complex activity.
For the local government you must secure a Mayor’s Permit (a.k.a. Business Permit) is a general requirements imposed on all businesses in the Philippines. The Mayor’s Permit is the grant of authority by the mayor of the city or municipality in which the business operates. The Mayor’s Permit carries with it the duty to pay Local Business Tax annually. It is helpful to understand the requirements mentioned so far as registration requirements.
In the Philippines, the first touch point for a business with the tax authorities is a Certificate of Registration. On top of this is registration with the social security and public insurance funds. These requirements will allow you to pay your tax liabilities in the Philippines and to remit on behalf of your employees for the social welfare funds that the government administers. These requirements can be though of as your remittance requirements.
If you wish to explore opportunities where the law grants some preferential treatment, the two government bodies that you should make inquiries with are the Philippine Economic Zone Authority and the Board of Investments. There are certain kinds of business activities and locations where preferential treatment with regard to taxation can be obtained. The Philippine legal system permits “Income Tax Holidays” for certain classes of enterprise, this means you would pay no income tax for some amount of time. These are your incentives.
The two government requirements that you need for the act of exporting are an Export License and the Customer Profile Registration System (CPRS). These are both properly requirements imposed by the Bureau of Customs. The Export License however can be obtained through PhilExport because the Bureau of Customs authorized them to obtain it. The CPRS is an yearly requirement imposed by the Bureau of Customs in order for someone to continue exporting. These can be best understood as export documentation.
There is a final category of requirements that cannot be easily enumerated. These are the product specific requirements. The easiest way to demonstrate this is through an illustration. If you’re exporting food you need approvals from the Food and Drug Administration. If there is wood in the product you are exporting you will need approvals from the Department of Agriculture. There are far too many examples to be able to produce a comprehensive list of the approvals that you would need. It is sufficient though that you be aware of these when you set out to begin the process.
Thank you for making it to the end of my article! I typically end my articles by saying “I hope you never need my advice” but in this case I will just say I hope you invest in my country!
Atty. Hourani practices law in Cebu City, Philippines. If you would like to set an appointment with him, you may reach him here.