Kittelson & Carpo Consulting – Blogs
Our blog section features original articles on finance, foreign investments, industry updates, entrepreneurship, and other business topics for people who want to gain knowledge on the Philippines’ business environment and economic profile.
Our articles also provide valuable insights on best practices in doing business in the Philippines for local and foreign entrepreneurs looking to set up operations in the country.
Foreign Direct Investment (FDI) net inflows into the country hit $4.8 billion from January to May 2018, exhibiting a growth of 49% compared to the US$3.3 billion figure from the same period in 2017. According to the Bangko Sentral ng Pilipinas (BSP), this growth is mainly on account of the expansion in net equity capital investments by 469.1% to US$1.4 billion.
Understanding the business environment of a country is one of the first steps an investor, an entrepreneur, or a legal entity has to take in order to assess the viability of setting up or expanding a business outside its headquarters’ territory. It is crucial to identify if the opportunities present in the market are supported by entities, systems, and mechanisms which make doing business in the country easier compared to other locations in the region.
President Rodrigo Duterte vetoed five provisions from the Tax Reform for Acceleration and Inclusion (TRAIN) Act before he signed it into law as Republic Act No. 10963 in December 2017. Among the provisions he vetoed is the zero-rating on the sales of goods and services to separate customs territories and tourism enterprise zones – which created uncertainties on the fate of the 0% value-added tax (VAT) incentive currently being enjoyed by companies registered under the separate customs territories of the Philippine Economic Zone Authority (PEZA).
Imagine the amount of work required from corporations having to submit a plethora of documents to fulfill the government’s reporting requirements. This same effort and time be spent by the company on other gainful engagements instead of completing reports. These documents are purportedly not even guaranteed to be reviewed religiously and are usually accomplished for compliance only – which further dilutes the report’s purpose.
Recent progress in the relationship between China and the Philippines is considered as one of the primary factors to further improve the country’s FDI. According to Board of Investment (BOI) Managing Head and Department of Trade and Industry, the interest of Chinese investors in the country will contribute to a sustained growth of Philippines’ economy.