Start a Textile Manufacturing Business in the Philippines

Updated on Thursday 06th December 2018

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The Philippines relies on the manufacturing industry which alongside tourism, is one of the most prolific economic sectors. Both local and foreign investors are welcomed if they want to set up manufacturing companies in various areas.

The conditions related to starting a manufacturing company in the Philippines will depend on the products to be produced, therefore the legislation to be considered is related to the goods to be made by the business.

The Philippines is known for the manufacturing of textile products which are distributed in every corner of the world. The cheap and talented workforce contributed to the Philippines’ reputation as one of the world’s most important textile manufacturing hub.

If you are interested in opening a business for manufacturing textile products in the Philippines, there are certain conditions to be met. You can rely on our Philippines company formation experts for guidance in registering such a business.

Steps in registering a Filipino textile manufacturing company

The procedure for opening a business for producing textiles will widely depend on the nationality of the owner. In the case of foreign investors, the requirements are a little more extensive, however, they are easily achievable with the help of our company registration agents in the Philippines.

Foreign entrepreneurs who want to set up companies for manufacturing textiles in the Philippines must complete the following steps:
  1.           choosing a business form which enables them to have full control over the company (the corporation is recommended in this case);
  2.           having the documents related to the registration of the company drafted by a local agent;
  3.           submitting the documentation with the Companies Registrar in the city the company will operate in;
  4.           obtaining the tax identification and VAT numbers with the local tax office;
  5.           applying for the necessary licenses with the Ministry of Industry and Trade.

As a foreign entrepreneur, you can rely on our local consultants for handling the registration of a Philippines textile manufacturing business with the local authorities. We can also advise on the necessary licenses to be obtained when producing various types of clothing articles.

The main laws applicable in the textiles industry in the Philippines

The government has enabled various laws which provide for the manufacturing industry which also cover companies producing textiles. Among these are the Tariff and Customs Code which provides for the duties to be paid when importing raw materials used for manufacturing textile products.

Another law which provides for the textiles sector is Act No. 4086 which provides for the exemptions applied to Filipino companies which import certain materials used for producing clothing items.
The conditions to benefit from these exemptions are:
  •           the imported materials, no matter if natural or synthetic, cannot be found in the Philippines in sufficient amounts;
  •           the importer must be a Philippines citizen or a private company registered in the Philippines;
  •           the importer must be a company involved in manufacturing textiles and owns the equipment used for the production of the said textiles;
  •           the company must be registered with the Philippines Board of Industries.

Among the items which can be imported by textile manufacturing companies in the Philippines are raw fibers, fabrics, dyes and even machinery and equipment used for creating the finite product.
Philippines manufacturing companies must also sign agreements with companies distributing their textile products unless they will complete this activity on their own.

Why open a textile manufacturing business in the Philippines?

The Philippines is one of the most populated countries in Southeast Asia and relies on the manufacturing industry which is why starting a business for the production of textiles here can bring many benefits. Local companies in the textiles sector take orders from other Asian countries but also directly from foreign large companies which during the last few years have established factories in which they manufacture and distribute their own clothing articles to Western countries.

Those who want to start textile manufacturing businesses in the Philippines can produce their own articles or can enter various partnerships or joint ventures with large companies around the world.

If you are planning on setting up a business in the Philippines and decide for the textile manufacturing industry, do not hesitate to contact us for support. We offer personalized company formation services to foreign entrepreneurs looking to start their own companies in the Philippines.