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CharlesLeahy

Legalities: Starting A Biz in PH - British Expat

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Hello there! :wave:

I'll try keep this short, three of us would like to open a Hostel on Siargao Island, PH. 

Person 1: Me, 100% British Blood, 26 years old, lived in Cebu for 9 months. Worked in Digital Marketing 9 years.

Person 2: Aussie-Philippine (passport holder for both countries), 27 years old, lived in PH for 3 years. Media Professional.

Person 3: Chinese-Philippine (passport holder for both countries), 20 years old, lived in PH 5 years. Business & Media Undergrad.

Now, apart from land rental, all the rules, taxes, fundraising, investors, employee contracts, construction, liquor licenses, food licenses, insurance, health & safety, natural disasters and EVERYTHING else that comes with opening a hostel on foreign soil. I just want to try and understand if it is possible for me to go into partnership with person 2 & 3, without it being stupendously expensive (only graduated a year ago)!

Here is what I have gathered to date:

Filipino First: A foreigner can only own 40% of the biz. This isn't a problem then I presume, as Person 2 & 3 are Philippine passport holders, so we can split the biz 33% each for example. 

Partnership: Unlimited contract length, sounds like it will work great if the case, still not an expert at understanding it, however one site claimed the foreigner must cough up $200,000 for a partnership to occur? Which lets just say my last bank statement is a couple zeros away from hitting that figure! 

Corporation: I haven't really read up on this much yet so don't know much about it, maybe this is a better path to go down for a foreigner? Only thing that put me off is heard that these agreements between people can expire, think it was max 50 years. Which is fine, I'll be 76 by then, but I guess if it worked out fab, would this sort of arrangement be easy to pass onto let's say the next generation if they wanted it or to at least put in your Will so they can sell it and cash-in if they wanted. 

Land: Something to worry about another day I think, neither 3 of us have the cash to purchase (which being a foreigner I can't anyway, can only inherit according to Mr.Google). So, will probably just be a 20 year lease contract from what researched to date. Land seems very, very expensive for now, so stick to renting me thinks!

If for example the first hostel worked, we would then go and open another, then another, then another etc. 

Thankfully person 2 & 3 have a great network here in the Philippines to work with and get advice from, making life somewhat easier, just doing my initial research as a foreigner to check we can legally all work together, we are all best of buddies for life, but biz is biz at the end of the day.

Thanks for any advice, if plans do go ahead, might be using this forum a lot more :) 

Cheers/Salamat :cheersty:

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19 minutes ago, CharlesLeahy said:

A foreigner can only own 40% of the biz

Cooperation is what you can be a part of.

Only advice I give you is be careful of your partners.

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