The Philippines, with the fastest-growing economy in Southeast Asia in 2023 and a youthful, English-speaking workforce, presents a promising market for investors looking to develop there. Its dynamic consumer market and increasing digitalization further enhance its attractiveness for global businesses. Mr. Marc-Olivier Levy, CEO and Founder of OPKO Finance, shared with us his expertise on this dynamic market as well as the significant opportunities in different sectors including business process outsourcing (BPO), electronics, and renewable energy.
Interview by Source of Asia
Could you please give a brief introduction about yourself and an overview of OPKO Finance’s objectives and missions?
My name is Marc-Olivier Levy, I’m the Owner and Founder of OPKO Finance, a group of four companies based in Hong Kong, Shanghai, Singapore, and the Philippines. Our main mission is to assist our clients in all their duties in the matter of tax, accounting, payroll, audit, as well as some legal requirements, to ease their burden and for them to focus on the development of their core business.
20 years ago, I firmly believed that Asian countries would upset the balance of power with the Western world, in terms of business, but also in terms of cultural exchange and communication. I also believe that developing a business abroad in Asia and having a good understanding of local culture and global organizations are quite exciting and challenging for foreigners entrepreneurs.
This is what inspired me to found OPKO Finance!
Prior to OPKO, I worked in the Audit, Restructuring, Accounting, and Finance fields as an Auditor, Financial Controller, and CFO for 20 years. During this time, I managed the setup of subsidiaries in Slovakia, the UK, China, and Seoul from legal, tax, and operational points of view. Now, with nearly 30 years of experience in the industry, I am helping my clients, StartUP, SMEs, Entrepreneurs, and subsidiaries of big companies to set up and develop their businesses in the best hubs in Asia, faster and with fewer resources through outsourcing solutions in the Philippines.
We also save clients’ time and effort so they can pursue other business-growing activities by providing accurate analytical reporting. We have also gotten companies to speed up their deal-closing project and the claim notices related to earn-out calculations. We organize physical inventories in different locations, sort through data analytics, argue the claims, and provide arguments for every point highlighted by the buyer or the seller.
As the Philippines is one of the fastest growing economies in the ASEAN, which sectors/ industries are trendy, and according to your experience, which ones are likely to boom in the coming months/ years?
The Philippines is a booming country in different industries; the main ones include tourism, BPO services, trading, and infrastructure.
“The government has made huge investments to develop the country’s infrastructure”
In addition to those mentioned industries, many projects are ongoing in the greenhouse market. This wide range of sectors highlights the numerous different possibilities and scopes interesting to develop in the country.
How did the Philippines succeed in differentiating themselves from other countries in Southeast Asia in the last few years?
From my experience, I would say that the main competitive advantage of the Philippines is the young, well-educated, and well-English-speaking population. Furthermore, thanks to the past colonialization period, the culture of the Filipino people is easier to understand and less challenging compared to other ASEAN nations.
One of the most notable reasons why foreign investors eye the Philippines to start their businesses and build their empires is because the country is rich in natural resources. These resources help sustain the nation, which is what makes it an important part of their economy. Made up of more than 7,100 islands, the Philippines is home to many valuable minerals, i.e. consists of more than 21.5 million metric tons of metal deposits and 19.3 metric tons of nonmetal mineral deposits; thus, it is attractive for growing crops used for domestic use and export.
There are also many opportunities in other Southeast Asian countries;
“But what is interesting in the Philippines is that the investment requirements are very low.”
It is safe to say that it is easier to develop your business in the Philippines nowadays than it used to be. These low investment requirements ease the foreign direct investments (FDIs) in the Philippines compared to others in ASEAN, where you must invest a huge amount of money from the beginning of your business journey, such as in Indonesia.
Plus, the Philippines is a tropical country, which means that there are products that can only be produced there. These products are exported to markets such as Japan, the United States, Hong Kong, China, and Singapore.
I also want to add that the Philippines include numerous advantages, such as a low cost of living, a trade-oriented economy as well as growing domestic and export markets. Of course, you need to invest in building your business plan, but by being on-site in the country, I can say that it is very dynamic here, the market keeps growing and offers many opportunities.
What are the common obstacles foreign investors face in their business journey in the Filipino business context?
The Philippines is a very bureaucratic country. Things take time;
“You need to learn how to be patient.”
In the end, you’ll obtain what you are looking for, but you better not be in a hurry! It cannot compete with Hong Kong or Singapore in terms of efficiency. But if your project is correctly planned and organized, you’ll succeed; there should not be any issue or reason why you would fail. Thus, investors should bear in mind that it takes time, and in my experience, this is the main negative point in the Philippines.
Setting up a company can take 3 to 5 months; you have a lot of administrative paperwork as well as approvals to renew every year, to only mention a few. Often, foreigners might not understand such local requirements and this high-level of bureaucracy of the country. All in all, you must be patient!
In terms of tax compliance and regulatory framework, what are the key considerations that foreign investors should be aware of before entering the market?
In terms of tax compliance and regulatory framework, you cannot compare the Philippines with Hong Kong for instance, which is almost free of tax with no burden. It is a little bit more complicated here in the way that you have quarterly declarations, and taxes, among others. If your administrative and accounting work is correctly organized, it should not be such a big problem for you.
There are no specific considerations on this topic; just like for every market entry, the basics you should include making tests, judging, and estimating your market. Understand what is ongoing on the ground, as well as the competitors’ landscape. There are many opportunities in the Philippines, but it is not so immediate to make it profitable. You must be careful and think about all the details of your plan and organization. An interesting strategy is to have a distributor who will test the market for you, and later you can move step by step with a trading, manufacturing, or services company.
In addition to this, the Philippines allows for a Build-Operate-Transfer (BOT) investment scheme that other Asian countries emulate. The Philippine Economic Zone Authority (PEZA) is a government agency that can help you establish your business, and at the same time, you can benefit from the tax incentives it offers. All you need to do is to pass its accreditation.
I also want to add that nowadays, for many sectors, foreign investors can own 100% of the shares of a company, which is not the case for every country in the region, but is often a main interest for them.
Last question, according to your expertise and the services you provide with OPKO Finance, what most important advice would you give to companies looking to grow their business in the Philippines?
An important piece of advice is to be well organized in terms of all back-office operations so that you can focus on your business development. You need to develop your network, and your connections, just as for every new geographical market. b you have a good competitive advantage, you must make sure that this advantage is still adaptable to the country you target. If you don’t have any, well, it will be complicated for you to succeed, and even more in the Philippines.
Thank you for your answers Mr. Marc-Olivier Levy!
To support our clients in the ASEAN countries, SOA fosters strategic collaborations with on-the-ground experts. Being strategic partners with OPKO Finance, we coordinate with the right people in the Philippines, to provide you with the best services to answer your needs.
So, do you need support to set up your company in the Philippines? Or do you want to outsource your accounting and back-office operations to on-the-ground experts? Don’t wait any longer, reach out to us at hello@sourceofasia.com.