Are you dreaming of a retirement lounging on a beautiful beach? Or looking to further your banking career in Manila’s rising skyline? Whatever your reasons for arriving in the Philippines, make sure you get the paperwork right to avoid unnecessary problems.
Obtaining A Visa
Many people stay in the Philippines for the short to medium term. With a tourist visa obtained at the airport, you can stay for 30 days. Before it expires, you can apply for an extension which will last for another 59 days, or if you apply in Manila you can request an extension of six months. You can keep renewing your tourist visa for a total of 16 months; at that point you must either apply to stay longer term or leave the country. The downside to using a tourist visa to stay in the Philippines is that you can’t work on this permit.Anyone staying in the Philippines for more than 60 days must apply for an alien registration card. This applies even if you are living there with a tourist visa. This will be valid for 12 months.
If you want to stay in the Philippines longer term, it’s worth applying for temporary residence. This means you won’t have to apply for an exit visa for trips away once you have lived in the Philippines for six months. The exit visa is easily obtained but adds unnecessary hassle and expense, especially if your trip away is a short one. There are a number of ways to obtain temporary residence, depending on your circumstances.
Special working visas have a number of strong restrictions in place. The employer must prove that they tried to obtain suitably qualified and experienced local residents for the post before employing you. Secondly, these visas are geographically restricted to only the Subic Bay and Clark Freeport areas.
If you are over 50, have a pension of at least $800 a month and can make a security deposit of $10,000, then you may be granted a special resident retiree visa. This is valid for two years and can then be renewed, although application fees are high. If you are successful in applying for an alien employment permit, you are allowed to work without having to change your visa.
If you are the owner or part owner of a business with at least 10 employees, and have management control of the business, you can apply for the special visa for employment generation. When the visa is issued, a one-year probationary period applies; after that, the visa can be renewed for two years at a time.
If you can prove that you have made an investment of at least $250,000 in the country, you can apply for an investment visa. However, if you withdraw your investment, you will lose the visa.
When you apply for a temporary residence visa, your official documents must be notarized by the legalisation office in your native country, and by the nearest Philippine Embassy there. Necessary documents will include your birth certificate, marriage certificate (if relevant) and qualification certificates.
If you are married to a citizen of the Philippines, you can apply for a section 13a visa. This gives you permanent residency and the right to work without an alien employment visa. If you haven’t applied for this prior to arriving in the Philippines, you can ask for a balikbayan visa at the airport as long as you are accompanied by your spouse. This is valid for a year, which should give you plenty of time to sort out your section 13a visa.
Without marriage to a citizen, you will have to live in the Philippines for 10 years before becoming eligible to apply for permanent residency. At that point, you must show you are familiar with local culture and have made a positive impact to society.
Paying Income Tax
If you’re going to work in the Philippines, you need to hold the correct visa. It’s unlikely you’ll find paid work there so you will almost certainly be running your own business.
Regardless of whether you are working for yourself or someone else, doing full or part-time hours, sitting in an office or working outside, you will need to pay tax on your income. This applies even if your source of income is from overseas. To do this, you register with the Bureau of Internal Revenue (BIR).
You will firstly need to obtain a Tax Identification Number (TIN). It’s free to get one from the BIR https://www.bir.gov.ph/ , but you can only be issued with one number in your lifetime. If you lose it, you’ll have to ask for a reminder. You can do this by calling the BIR helpline or visiting one of their local offices.
Next, gather together all your important documentation. This will include personal ID such as your birth and marriage certificates, as well as any business documents you hold such as a mayor’s business permit or DTI certificate.
You will then have to visit the local tax office for the area in which your business operates – or for your home, if all your income is based abroad. You will be asked to pay an annual registration fee, and your documents will be reviewed. Then you’ll be asked to pay the P15 certification fee and associated P15 documentary stamp tax. At that point, you will receive a form to keep and details about the taxpayer’s initial briefing which you must attend. Once the process is complete, you will receive a certificate of registration, or form 2303.
When you are asked to submit your accounts, the tax office will add an official stamp. The income tax you pay will be due on your gross income, not on your net profits.
You may also be liable to pay VAT if you earn above the threshold. Like income tax, a percentage of gross receipts will be due. VAT is filed on form 2550M.
Every individual in the Philippines must pay community tax if they are 18 years old or over and fulfil one of these requirements:
• Have been employed for 30 consecutive days or more in the calendar year
• Run a business
• Own real estate over an assessed value
• Are required to file an income tax return
Every business also pays community tax. The ownership structure and source of income – from the Philippines or abroad – is not relevant and does not affect the payment due.
Once you have paid the community tax, either as an individual or as a corporation, you will receive a community tax certificate known as a sedula.
If you’re young and fit, it’s easy to forget about health insurance. However, accidents and illnesses happen and if you do end up in hospital, you won’t be allowed to leave until the bill is paid.
Medical care in the Philippines is delivered via a mix of private and public health care. As an expat, you’re only entitled to the public healthcare system once you have become a permanent resident. On the upside, private healthcare in the Philippines has a very good reputation for modern, sophisticated care.
Private healthcare in the Philippines is much cheaper than in the USA and northern Europe. However, prolonged or complicated medical treatment can result in significant bills, so you are strongly advised to obtain healthcare insurance. You have the freedom to choose any provider willing to offer you insurance in the Philippines, but do look carefully at the terms and conditions in case there’s an important reason for a difference in the different quotes you receive.
Once you have your healthcare insurance in place, register with a local General Practitioner’s surgery. Don’t wait until you are ill before taking action – you may find your surgery of choice is closed to new patients or wants to complete the registration process before considering you for an appointment.
If you hold an international driving license you can arrive in the Philippines and drive for up to 90 days. This is regardless of the type of visa you hold. However, your driving license must be in English, otherwise you will need to obtain an official English translation from the embassy of the country which issued your driving license. You must also keep your passport with you, as you need to show the police both your passport and driving license together if they ask.
If you will be driving in the Philippines after 90 days, you can obtain a new license from the land transportation office. The rules require you to be present in the Philippines for a month before you start this process.
You’ll be asked for proof that you will be staying in the Philippines for at least 12 months. Your visa will usually be sufficient. This causes problems for anyone who is not permitted to stay in the Philippines for that length of time, such as those with a six-month tourist visa.
Theoretical and practical tests form part of the licensing process, and you must pay a fee. The tests, especially the practical, are far less stringent than European and US citizens will be used to.
The whole process is straightforward and quickly over. Having a local driving license will be a handy identity document for other transactions such as taking on a property lease.
Getting all the paperwork sorted for a move to the Philippines can be challenging and demand time, patience and money. However, once all these things are in order you can concentrate on doing those things you arrived in the Philippines to do!
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