For the newcomer establishing foreign operations in the Philippines we suggest that, following consultation with your Philippine corporate accountants, bankers and lawyers, you work very long and hard on firming your preliminary Business Plan where you will be looking to position yourselves in the Philippine export and/or domestic markets and looking to maximize the long term return on your investment. Revisit your above corporate advisors before you press the button and commit yourself to Incorporation and the flow of responsibilities that will follow.

For many you will have looked at the advantages available in establishing operations, where appropriate, in a Trade Zone administered by the Philippine Economic Zone Authority (PEZA). The main thrust of this and the accompanying incentives is to attract foreign investment and to encourage the manufacturing and export of goods from the Philippines.

Whilst you can change your issued and paid-up capital position, from time to time as circumstances demand, it is better to get it right the first time and certainly less expensive. The formula you choose will be unique to your own business requirements and plan - hence cannot be addressed in this publication.

Once you have established your Business Plan, test it with your Philippines advisers, corporate accountants, lawyer and banker, listen to what they have to say for whilst it looks the same as at home there will be differences in fact or application. "Ahhh, I thought...". There will be plenty of those following which changes in both the word and attitude may be required. Revisit the business plan, "OK", and then proceed to Incorporation and capitalization.

You can make your own way through the Securities & Exchange Commission (SEC), it is not hard, and people are helpful, just time consuming. We recommend that you work with your Philippine lawyer to accomplish requirements as there are a number of areas where local knowledge is paramount and failure to recognize this may be expensive and at the least result in unnecessary and aggravating delays. Your issued and paid up capital will depend on your corporate requirements and form part of your business plan previously reviewed by your advisers.

Where is my lawyer: There are issues surrounding a required Filipino participation, equity and or Directors, listen to and trust your lawyer there is not much that has not been tested already. At the end of the day common sense will prevail. Most corporate lawyers in the Philippines, if required, will sit on a Board of Directors and offer an additional corporate service for a moderate fee.

Debt Financing

Debt funding in Phil. Pesos, foreign currency or goods, products & services will again be a measure of your unique corporate requirement and the extent of which will best be resolved following consultation with your financial advisers, namely you corporate accountant, banker and lawyer. When you have addressed the many issues that relate to your business and generally surround foreign investment and incorporation in the Philippines you will have embraced both capital and debt funding issues.

Repatriation of Capital and Profits

Capital can generally be repatriated upon dissolution of an investment provided it was registered with the Central Bank either in the form of cash or equipment at the time of the documented initial import of capital and came in either through the banking system or through customs.

For joint ventures this rule applies to dividends and for branch offices it is applicable to profits. Both are remittable provided the investment was initially registered with the Central Bank.

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