Planning to Set-up the company in the Philippines?

1. Perez Go Cimafranca Avanzado & Associates

2.  CPA-Lawyer-Male Supermodel-Ninja
 Graduated BS-Accountancy 2000 from USC
 Graduated BS-Law 2005 from USC
 Professor: Taxation, Financial Accounting,
Cost Accounting, Auditing

3.  Partner – Perez Go Cimafranca Avanzado &
Associates
 Vice-president – Thrustpoint Consulting, Inc.
 Partner – Maverick Ideas
 Areas of Specialty: Corporate Law & Information Technology,
Business Development and Organizational Structuring

4. But he did not understand the
price. Mortals never do.
But the price of getting what
you want is getting what you
once wanted.
- Neil Gaiman

5.  Why???
 Separate source of income
 Be your own boss
 Fulfill your dreams and your purpose
 Save the world
 Rule the world

6.  Why not??
 Risks – It could fail
 No stability
 Waiting game

7.  When?
When the timing is right.
 When you have enough capital
 When you have enough time
 When you have the right team
 When you have the right attitude
 Determination
 Patience
 Appetite for risk

8. He who knows when he can
fight and when he cannot, will
be victorious
-Sun Tzu

9.  KNOW THE TERRAIN
 KNOW YOURSELF
 KNOW THE ENEMY

10.  Know the TERRAIN:
 Who is your market?
 What does the market want?
 What does the market need?
 Existing technology
 New technology

11.  Know the TERRAIN:
 Will the market buy your idea?
 Is your idea being supplied by existing products?
 If yes, is their product good? Will they have product
loyalty? Can you fill a need or want that they can’t?
 Does the government provide incentives / restrictions?

12.  Android was founded on 2003 by Andy Rubin,
Rich Miner, Nick Sears and Chris White
 It was acquired by Google on 2005
 Patent applications were filed on 2007
 “Believe it or not, there were quite a few hardware
devices that ran Google Android, even before the
new T-Mobile G1. At the Mobile World
Conference, held in February 2008,at least three
cell phone prototypes were running simple
Android applications. At the Google IO
conference in May, a cellphone with a touch
screen, Qualcomm processor, 256 MB of flash,
and 128 MB of RAM was unveiled.”

13.  Know YOURSELF
◦ Abilities, knowledge, training
 Workhorse
 Rainmaker
 Bean-counter

14.  Know YOURSELF
◦ Funds
 Personal savings
 Loan from friends and family
 Loan from the bank and from microfinance
 Sell existing assets
 Investment from other people

15.  Know YOURSELF
◦ Equipment & Technology
 How many developers / staff?
 Can I get by on good enough or should I have the best?
 Licensed, Freeware, or Pirate Bay?
 Am I in the graphics & design industry?
 What can I get for free?
 LIST IT ALL DOWN

16.  Know YOURSELF
◦ Allies
 Partners
 Investors
 Employees
 Suppliers
 Customers

17.  Know YOURSELF
◦ Product and Services
 Product or Service or Both?
 Canned product or SAAS or hybrid?
 How will my product make life easier for my client?
 Pricing
 Support

18.  Know your “E N E M Y”
◦ Who is the competition? Who are they
serving? What are their products?
 Case Study: Google vs. Apple vs. Microsoft
◦ Goals: What do I want to achieve with my
business?
 Self-fulfillment goals
 Professional goals
 Monetary goals

19.  In other words, make a FEASIBILITY STUDY
◦ Qualitative – Example: SWOT Analysis
◦ Quantitative –
 Investment Costs, ROI
 Projected Financial Statements
 Project for the next 3 years

20. Management of many is the
same as management of few.
It is a matter of organization.
- Sun Tzu

21.  What entity to use?
◦ Single proprietorship
◦ Partnership
◦ Corporation

22.  Sole proprietorship
◦ Only one person owns the business
◦ No separate juridical entity
◦ Register with the DTI for formal recognition
◦ Income Tax Rate: 10 to 30%

23.  Partnership
◦ At least 2 people
◦ No separate juridical entity
◦ Register with SEC for formal recognition
◦ Income tax rate: 30%

24.  Corporation
◦ At least 5 people
◦ Separate juridical entity
 Obligations of the company are not obligations of the
stockholders
◦ Register with SEC for formal recognition
◦ Income tax rate: 30%

25.  Should I have partners?
◦ Are you a team player? Are you a dictator?
 Should I have investors?
◦ Can you raise the capital on your own?
◦ Can you afford to pay back the capital?
 Should I have a foreign partner / investor?
 What is his involvement? Funds, industry, or both?
 How much can he put in?
 Do I trust him? Does he trust me?
 Safeguards

26.  3 Main Functions of Businesses
◦ Operations / Production (Workhorse)
◦ Sales & Marketing (Rainmaker)
◦ Administration (Bean-counter)
 Human Resource
 Accounting
 Treasury
 Custodian & Maintenance

27.  Employees
 Partners
 Regular employees
 Sub-contractors
 Outsourced admin. staff
 Other considerations: wages, benefits, training,
loyalty, discipline

28. "It is difficult to realize the
true Way just through sword-
fencing. Know the smallest
things and the biggest things,
the shallowest things and the
deepest things."
- Musashi Miyamoto

29.  Fixed Assets  Monthly Expenses
◦ Land  Wages
◦ Buildings  Rent
◦ Leasehold  Utilities
Improvements  Marketing expenses
◦ Vehicles
◦ Furnitures & Fixtures
◦ Office Equipment

30.  Must have enough funds to last you 6 months
to 1 year even without income.
 Give yourself a salary, enough to meet your
monthly living expenses
 Always invest back into the company for its
long term expansion
 Give yourself a bonus.
 Company savings / rainy day fund

31.  Tax-planning
◦ VAT or percentage tax?
◦ Income tax or special rates?
◦ Export?
◦ Special Benefits (BOI, PEZA, RHQ / ROHQ)

32. Sample Finance Plan

33. "When you decide to attack,
keep calm and dash in quickly,
forestalling the enemy...attack
with a feeling of constantly
crushing the enemy, from first
to last."
-Musashi Miyamoto

34.  Base of operations / Principal Office
 Find out the requirements:
 DTI / SEC
 Name reservation
 Articles of Partnership / Articles of Incorporation + By-
laws
 BIR
 Registration Fees (TIN)
 Documentary Stamp Tax
 Local government
 Business permit

35.  Employee benefits
 SSS
 Philhealth
 HDMF / Pag-ibig
 Bank
 Treasurer-in-trust account
 For businesses with special licenses
 BOI
 PEZA
 TESDA
 Etc.

36.  Draft your Articles and prepare your requirements
 Reserve your business name
◦ www.sec.gov.ph
◦ www.dti.gov.ph
 Deposit the “show-money” with your bank
 Do not put all your money in, paralyzing operations
 Finalize your Articles and clean up your
presentation
 Submit with the SEC / DTI

37.  Follow-up
 After Certificate is released:
 Release of bank funds
 Get TIN from the BIR & register your books of account
 Get business permit
 Register with SSS, Philhealth, & Pag-Ibig
 Print official receipt
 Alien employment permit, if you have foreigner
employees / partners
 Find out the periodic compliances – set deadlines and
schedules

38. All men dream: but not equally.
Those who dream by night in the
dusty recesses of their minds
wake up in the day to find it was
vanity, but the dreamers of the
day are dangerous men, for they
may act their dreams with open
eyes, to make it possible."
-T.E. Lawrence

39. Unit 5 Merjen Bldg., Gun-ob,
Lapulapu City, Cebu
Telefax No. (6332) 340-4689
jan.perez@pgcalaw.ph
Unit F Ground Floor, W Tower
39th Street North, Bonifacio Triangle
Bonifacio Global City
1634 Taguig, Philippines
Telefax: +6325001308