8 Important Things to Do Before Expanding Your US Startup Business to the Philippines
Every entrepreneur whose business is doing well has aspirations of making it big, not only in profit but in establishing a “global footprint” as well. They know that they cannot be content with where they are or else face the consequence of eventual liquidation or be swallowed by competition in their market.
If expansion is in your plans, the Philippines is an ideal choice. With its sustained growth and modernization, rich resources, and rife local and international trades, the Philippines continuously attracts many large multinational corporations looking to lower their costs and take advantage of competitive domestic wages and a highly educated workforce.
Indeed, the country known as the “Pearl of the Orient” is an enticing site to expand one’s business, but as with any new venture, the overseas expansion process does take time and requires careful planning.
Here are 8 important things to do before expanding your US startup business to the Philippines:
- Know the Legal Requirements
Keep in mind that tax codes and business regulations vary from country to country. That’s why the company or its counsel must research tax laws, customs laws, import restrictions, corporate organization, and liability laws. Domestic legislation needs to be examined as well for issues arising under labor law, immigration law, customs law, tax law, agency law, and other producer/distributor liability provisions.
Foreign investors typically register and start a business in the Philippines through a Domestic Corporation or Branch Office. Corporations are more favorable in terms of administrative regulation while branches may be more advantageous taxwise. The important thing is you need to make sure all legal requirements are in order. Have a checklist of all the documents you need to accomplish such as a DTI registration or a business permit renewal.
- Check the Language Barrier
Aside from the ability to understand and speak in English, check the country’s standards for humor, accepted puns or jargon, or even subtle gestures as they may not be the same as your domestic country’s norms or idioms. Adjustments may need to be done accordingly.
The Philippines is the third largest English-speaking country, behind the US and UK, which means a next to none language barrier frustration. Plus, Filipinos are in tune with American culture. These are the reasons why the Philippines is the number one country to outsource customer support.
- Develop a Business Structure
Deciding how to run a business can be tricky. Is it a separate company, a branch, or a sales office? Also, do not forget to take into consideration things like the degree of control you want to have over your business, organizational structure, potential investors and partners, human resources issues, and other legal requirements as these will provide guidance and clarity in growing your business.
- Perform Due Diligence
Before you expand your business to another country, it is critical to understand what the full impact on your business will be. Will your product sell in the local market? Is there a demand that is not satisfied by a local company? More importantly, perform a SWOT analysis against the competition. It will immensely help your business assess on what it can and can’t do, as well as its potential opportunities and threats.
- Consult a Professional
Living in the digital age, it’s easy to find everything you need to learn about running a successful business online. Though this may be true, management strategies are not one-size fits all. What worked for someone else’s business may not work for you, so it’s highly recommended that you tailor-fit your tactics. With an experienced professional onboard, you can avoid unnecessary mistakes. He/she can give simple and straightforward advice before you can ever take a step in the wrong direction.
- Have a Physical Office
It’s difficult to enter new markets without also opening a physical office there. Having one allows you to serve customers based on their time zone and leverage natives that understand the nuances of travel. There are various types of offices in the Philippines , but the best ones are found in the thriving metro such as the modern offices in Makati, the functional offices in Taguig, and the conventional workspaces in Manila.
- Hire the Right People
Hiring your new team is one of the most important things you will do in setting up your business. Be sure to hire only individuals who actually fit the job description you’ve created. But how do you find and match the right people to the right jobs? By including, in your comprehensive people strategy, a well-structured recruiting and selection program. Or better yet, by seeking the service of placement companies. They will not only save you time and money but ensure you are getting qualified and talented people to assist you in running your new locations.
- Prepare Your Final Budget
Results from the above steps should provide sufficient data for stakeholders of the foreign company to develop a final budget that is aggressive yet attainable, and one that will be owned by your local team.
Expanding your business is the natural progression of a prosperous venture. If you wish to maximize your chances of success through a thriving location, the Philippines is your answer. Aside from being a very cost-efficient location for business operations, there’s a talented pool of young professionals who are at par with the world’s best.
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