Witnessing the disruption that the Financial Technology (FinTech) community has brought to the banking and finance industries of the world’s largest economies, leading traditional banks in the Philippines are welcoming FinTech companies to inspire collaboration in making financial transactions more efficient and consumer-friendly.
Business in the Philippines
Utilizing the services of an Employer of Record (EoR) from the Philippines enables a client or company to cost-effectively outsource their tax compliance, human resource management, salary compensation, benefits administration, and payroll processing to minimize legal and tax burdens from their enterprise.
Many companies outsource their back-office, customer support, and technical job functions to third-party providers in the Philippines. Initially, they fully outsourced these operations to companies like Accenture, Convergys, TeleTech and other global business process management providers throughout Metro Manila to take advantage of low labor costs.
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.
Payslips are some of the most easily neglected documents by employees and employers despite the critical information contained within the document and the document’s significance in clarifying concerns on compensation and benefits. Given the consistent complaints received from employees about employers not providing pay slips, the Department of Labor and Employment (DOLE) has campaigned for and urged companies to regularly issue pay slips in compliance to the existing labor laws and for employee welfare.
In recent years, Metro Manila has witnessed the growth of a unique sub-industry in Real Estate and leased spaces. Coworking Spaces have been taking the spotlight as they present a fresh and uniquely efficient take on renting out office spaces. A lot of people are still puzzled with the idea of sharing an office space with different individuals and organizations, but this new approach to space leasing is here to stay, given its ideal fit for the growing market of young entrepreneurs.