With the latest tax relief programs (CREATE Act) offered by the Philippine government, Philippine tax whiz and CEO of Asian Consulting Group, Mon Abrea is convinced that this is the best time to invest and start a business in the home country.
“Meron kang option na 20% (from 30%) Corporate tax income lang ang babayaran mo or kapag individual or sole proprietor ang ni-register mo, meron kang option na 1% lang quarterly.”
Once you've decided what type of business you would like to invest in, he suggests to have someone to manage and look after the business locally.
Mon Abrea, CPA, MBA is the Co-Chair of Paying Taxes – EODB Task Force. He is the founder of TaxWhizPH. Source: Supplied
"To invest or start a business even if you are in Australia, I think it is very feasible. Ang suggestion ko, is to have a local partner."
Working with family members might seem like a good idea but it can often lead to challenging and uncomfortable situations.
Mon Abrea explains why having a family member as business partner doesn't work for many Filipinos.
1. Emotion is always involved
If things don’t work out with the family member, disciplining that person is very difficult.
"It's not because it's wrong, kaya lang it's hard to be objective kapag family ang involved.
For example, sumobra ang budget, paano mo papagalitan lalo na kung nanay mo yun?"
"Pero kung professional yung relationship nyo, pwede mong sabihin directly na eto lang gagastusin natin or cut tayo sa electricity, mas madali.
Kapag kasi kamag-anak, mahaba ang paliwanang and may tendency na may emotional consideration." Mon shares.
2. Lack of skills and commitment
Hiring a family member is often fraught with danger. You must have those who are qualified enough to help your business grow. Bringing in family doesn’t always guarantee the highest quality. Mon says that even though you have good intentions, that may actually do more harm than good.
"When you do business, kelangan planado lahat. Hindi naman sa totally wag kamag-anak pero hanggat maari the point person should be a professional partner.
Sana lang objective. Don’t give them a job because they need money, give them a job because of their skills"
3. It may damage your relationship
When there’s beef at work, it could impact the entire family. Once business gets involved, there’s no reversing the relationship when things go sour.
"Ang hirap na laging maraming emotional baggages ang discussion. Yung pinag-uusapan nyo lang ay kung mag-bubukas ba ng Saturday o hindi tapos mapupunta na ang usapan sa mga pinsan mo na may sakit or tita at tito mo na nag-away. That will be a distraction and you don't need that when you're starting a business."
"Kapag in-entrust mo lahat sa kapatid o magulang mo, baka later on yun ang maging start ng pag-aaway which is not worth it."
Of course, there are always exceptions, and some businesses rely on keeping employees and hiring processes within the family. But thinking critically about potential hire outcomes beforehand can help you forecast whether or not hiring family members is the right move for your business. Mon believes that: “family is family but business is business.”
