Philippines: Regional 2024 Doing Business In Update

Published on Apr 23, 2024

2024 Philippines Regional Update

Firm Name: SyCip Salazar Hernandez & Gatmaitan
Joanna Joson

1. How is the political environment impacting business in or with your country?

The current administration is just less than two years in office, but it appears optimistic about investor confidence in the Philippines. The administration has expressed its commitment to prioritize reforms that will attract more foreign investments and improve the ease of doing business in the Philippines. Recent key reforms, which include simplifying tax payments and regulations and implementing digitalization and online

payment tools to streamline business registrations, demonstrate the government's commitment to making the Philippines more competitive and attractive to businesses.

2. Which countries have you previously collaborated with and do you see potential for future collaboration with on cross-border matters within the region?

We have collaborated with Australian, Chinese, Indian, and Singaporean law firms and/or companies, among others, usually to work on clients' investment activities in the Philippines. Given the recent legislative amendments regarding foreign equity restrictions in certain industries, we see the potential for future collaboration on cross-border matters within the region.

3. What legislation has recently changed or is changing that a potential international client should be aware of?

Several legislative amendments were passed in the last three years to stimulate foreign investments and improve the Philippines' competitiveness. The changes include amendments to the (i) retail trade laws, which lowered the paid-up capital requirement for foreign retail enterprises, (ii) public service laws, which narrowed down public service activities subject to foreign ownership restrictions, and (iii) tax laws, which lowered corporate income tax rates, rationalized tax incentives and made tax compliance easier for taxpayers.

Congress moves to introduce amendments to the Constitutional provisions imposing foreign equity limits on education, public utilities and advertising. Further amendments to the tax laws, which aim, among others, to reduce the number of tax bases and impose uniform tax rates applicable to passive income, are also expected to be approved soon.