Why the Philippines is popular as an expat location

The Philippines has long been a popular destination for older expats and retirees. In recent years it is also becoming popular with younger travelers and entrepreneurs wanting to live in an affordable tropical paradise while they build their business.

With the country being made up of more than 7,000 islands, the beach is never far away. Tropical rainforests, tasty cuisine and welcoming people make the Philippines ever more attractive.

The Philippines, like most of Southeast Asia, has a very affordable cost of living. Even those on lower incomes can live a good life here. For that same reason it’s a fantastic place to bootstrap a business.

The country is a little bit different to many of its peers. It is the only Christian country in Asia. The catholic faith is widely practiced here, largely due to it being a former Spanish colony.

Some expats like that the Philippines has a culture that supports more traditional values. You can find a way of life here that has in some respects disappeared from many western countries.

English is one of the official languages of the Philippines, along with their native Filipino language. This makes living and doing business in the country all the more easy. It also makes it much easier to mix with the locals and form stronger relationships along the way.

Philippines Special Investors Resident Visa (SIRV)

The Philippines investment visa allows you to reside indefinitely in the Philippines. There is no minimum stay requirement. For all intents and purposes, it can act as a permanent residency. As long as your investment capital remains in the country, your residency permit remains active.

The visa allows for multiple entry so you can come and go as you please.

Eligibility

The main eligibility requirement is to invest US$75,000 in the Philippines. The investment must be made in accordance with Book V of the Omnibus Investments Code.

Other requirements:

  • not been convicted of a crime involving moral turpitude
  • not afflicted with any loathsome, dangerous or contagious disease
  • not been institutionalized for any mental disorder or disability

The visa is open to anyone who is 21 years of age and over. And you’re free to bring your spouse as well as any unmarried children who are under the age of 21.

There is a processing fee $300. But there may be more fees payable if you use the services of an agent.

What can you invest in?

Initially you must deposit the equivalent of at least $75,000 into an accredited Philippines bank.

After 30 days you are then able to use these funds to invest in an eligible domestic enterprise. The investment must take place within 180 days.

To be eligible for the SIRV you must buy stocks in publicly listed or private companies that are operating in one of the Investment Priority Plan (IPP) sectors, as set out by the Philippines Board of Investment.

The investment can be made in manufacturing or service companies from the following sectors:

  • Business services
  • Communications
  • Construction and engineering
  • Distribution
  • Education
  • Environmental services
  • Financial
  • Health and social services
  • Tourism and travel
  • Recreational, cultural or sports
  • Transport
  • Other services

Investing in real estate is not eligible for the Special Investors Resident Visa.

Is the Philippines a good place to invest?

The Philippines has favorable demographics on its side. The median age of its citizenry is 25.7, compared to the global average of 30.3.

A young country is usually a solid foundation for future economic growth. It means there is a large proportion of the population that are, or will be entering the workforce. Creating a long pipeline of workers that will be paying taxes, funding infrastructure spending and contributing to an increased standard of living.

Philippines gross domestic product

The economy of the Philippines is quite industrialized. Its major exports include electronic circuitry and machine parts. Their 3 biggest export markets are China, the US, and Japan. It is currently the 40th largest economy in the world.

Over the last 10 years, the Philippines has consistently averaged GDP growth of around 6.5% per year. In comparison, the United States averages around 2.5%.

The fact that the Philippines has high literacy levels and English as an official language means that it is much more accessible for foreign investment, and easier to do business with, than many of its Asian counterparts.

This is one of the reasons why the Philippines is the main Asian hub of the outsourcing industry.

Being somewhat indifferent to the politics of the west, the Philippines and Asia in general, can offer a level of protection to the political risk and geopolitical gameplaying that takes place in the west. In short, it is a useful diversifier.

Does the Philippines have a citizen by investment program?

It’s not impossible to get citizenship in the Philippines but it’s not easy either.

The Special Investors Resident Visa doesn’t provide a pathway to citizenship. As such, this should be viewed purely as a residence program.

Do foreigners have to pay tax in the Philippines?

Citizens of the Philippines who are also tax residents have to pay tax on worldwide income.

Foreigners only have to pay tax on income that is sourced from within the Philippines. The same rules apply whether you are a resident for tax purposes or not.

The maximum tax rate in the Philippines, as of 2023 is 35%.

International taxation is complex. Any information in this article is made on a general basis only and is not tax advice. If you need taxation advice specific to your situation, you can get that here.

Investment visa

Alternative visas

What else is on offer in Southeast Asia as far as visas go?

Thailand has a long term resident visa – you can read about that here.

Indonesia’s Second Home Visa is popular with expats who have some savings behind them.

Malaysia has a digital nomad visa for remote workers and entrepreneurs who have established a basic level of income.

Who is the Philippines Special Investors Resident Visa good for?

The SIRV is a great low barrier option for people who want to establish a residence in Asia at a minimal cost.

The fact that it allows for indefinite residency regardless of how much time you spend in the country lends itself to being an effective back pocket option. Its set up and ready for whenever you want to call on it.

For those looking to internationalize their life and set up a long-term base in Asia, the SIRV ticks the box. Whether your intention is to build a business or just enjoy a tropical lifestyle. This will do it.

If you want to diversify your assets – reduce political risk, develop an offshore asset base – the SIRV will add a layer of asset protection to your portfolio. The residency permit is an added bonus.

There will be people who are interested in a residence by investment in Asia, but would prefer to do that by investing in real estate. The SIRV is not a good option in this case.

Final thoughts on the Philippines SIRV

The Philippines investment visa is one of the better options currently available in Asia, in our opinion.

You don’t have to give anything up. You get to keep your money, put it to work in an offshore market and hopefully reap the rewards.

That said, you must also be careful what you invest in.

It’s great that the available sectors for investment are quite broad. But for most of us this will be an unfamiliar market. So it’s vital that you do your research before settling on which companies will get your money.

If you would like some assistance with market research and analysis of the Philippine Stock Exchange, we can help.

And of course, for help on any other matters in relation to the Philippines Special Investors Resident Visa, hit us up for a call.

Thanks for reading.