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How do you establish a legal Internet company in the Philippines?

  • We are 2 entrepreneurs from Norway and want to work with 3+ employees (web developers) from the Philippines. This is an internet company.  But we do not know how to do the legal part of this project. Is it a good idea to establish 1 company in our main country and 1 company in the Philippines? Edited text: In the first place, we want to hire Philippine web-developers and set up an office there for outsourcing the work. We want to pay salaries, benefits etc, but no holding of assets in terms of sales and revenue. What is the smartest way to go forward here? Thanks everyone for helping us out :)

  • Answer:

    I would recommend Disini & Disini - http://disini.ph , they've worked with some e-commerce companies in the Philippines and have been our lawyers for a long time at Enthropia Inc. I guess the main question is why do you need a company in the Philippines? Or what are you planning to do with it? Corporations in the Philippines only allow a maximum of 40% foreign ownership unless you go through loopholes or invest a lot of money. Taxes is also might be higher than norway. Do you plan to open up a bank account in the Philippines, transact with local entities? Sell to Philippine consumers? Do you just wish to hire Philippine employees or setup an office for outsourced work? It really depends on what you need. One thing some foreign companies do here is they setup a company as a operations entity to run the operations, hire staff etc, so they pay salaries, benefits etc, but hold no assets in terms of sales and revenue. The revenue is received in another country thus avoiding Philippine VAT and income tax. I suggest find a good lawyer in the country and ask some questions and they should be able to give you a good answer depending on your needs. If you need to hire just 3 or so developers in the Philippines, then no you do not need a company and you can hire them as contractors and just pay via Wire Transfer, WU, or PayPal.

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You should form a Norwegian company.  Norwegian and Phillipine lawyers can advise as to whether you need a subsidiary in the Phillipines based on what you are doing with these three other people.    As it so happens, I actually do know a Norwegian corporate lawyer and would recommend you contact her.   http://www.wr.no/en/People/Partners/Susanne-Munch-Thore Please let her know that I referred you.  She is an old friend and we have not been in contact for a while.   I do not know what her experience is in start ups.  As I think about it, Norway may not have enough start up work to have specialists in the field.  If Susanne is willing to work wiith you, I'd be happy to fill her in on my knowledge.  If she is unable to help, she can probably refer you to someone who can.This answer is not a substitute for professional legal advice....

Mike Prozan

You will only want to incorporate in the Philippines if you are going to scale up in infrastructure investments (office space, equipment, etc.) Otherwise, you can contract the Philippine developers as contractors from the Norwegian company, and possibly give them equity from there. If you want a legal entity in the Philippines, work with Kittelson & Carpo (just Google) as they are experts in consulting foreign companies with doing business here.

Gabby Dizon

Hi, guys; Coming from Norway, you'd get a genuine culture-shock if you try to run a Filipino company in terms of dealing with government red tape and corruption. You're much better off hiring them as permanent full-time contractors, unless you're planning for a big office with lots of staff in Philippines at some point. It's also worth noting that if your company isn't primarily selling products to Norwegians, or employing lots of Norwegian staff, there are other, more business friendly, jurisdictions around. Singapore comes recommended, but similar things can be said for HK. The weather's better down here as well ;)

Allan Simonsen

Do you really need to open local office etc there?.You can outsource everything to Philippines,hire virtual assistents there and so on.

Silver Teede

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