8 tips to finding the right location for your business

It’s often said that the three most important things to consider when buying a home are location, location, location.

It’s the same when you’re looking for a place to put up your business. Especially for retail stores, restaurants and many other enterprises, finding the right location is a crucial step to ensure immediate profits and initial success.

So how do you find that most suitable place to put up your business? Do you simply look for a commercial area with a lot of people? What role does competition play when choosing your business location?

Here are eight tips that can help you check if that space available for lease that you’re considering is the right one for your business.

1. Study the demographics of the area

There are two things to bear in mind when studying the demographics of a potential location.

First is your target market and second is your manpower requirement. Your location should be able to provide you not only with customers but also with employees as well.

The second factor is not as important as the first, but employing people from the area will greatly help in your marketing efforts. Do some due diligence and study the communities within and around your prospective location.

2. Determine the sources of foot traffic

Foot traffic or the number of people who pass by the area is important if your business will mostly rely on walk-in customers. You can do a physical count during different times and days to come up with an estimate of the foot traffic.

But beside that, you should also consider the sources and quality of this traffic. Where are they coming from and where are they going to?

This will help you determine the mindset of the crowd and check if your business can catch their attention or if they’ll just ignore and pass you by.

3. Evaluate the security and accessibility of the location

There are three groups you should think about when studying the security and accessibility of an area–your employees, your customers, and your suppliers.

Some of the questions you should ask yourself are: Is it safe to do your planned business in the area? Is it accessible to you and your employees? Will it be easy for your customers to find you? Is there ample parking for customers who have cars? Are there accessible suppliers in the area?

4. Analyze the competition

Who will be and where are your competitors? How is their business doing? If these establishments are already having a hard time keeping themselves afloat, then putting up a similar business in the locality is close to suicide.

However, if you believe that the business is indeed profitable and you want to penetrate the existing market, then the best place to put your business is as close to your competition as possible. Why? Because by doing so, you are likewise making yourself closer and more available to your target market.

5. Get to know your neighbors

Always consider what businesses are operating near your planned location. These can affect the image of your business and may give wrong impressions to your potential customers.

For example, a laundry shop will probably not do well if it’s located beside a vulcanizing shop because these establishments give conflicting images of cleanliness. However, a coffee shop may be able to drive customers in if it’s located near a video rental shop because both businesses usually have the same target market.

6. Check it against your space, facility and utility requirements

Will the area be enough for your business? It may be tempting to lease out an area because it’s in a good location or because the rent is cheap, but always make sure that it can also satisfy your space requirements and has all the facilities you need.

Additionally, check your utility service providers if the place is within their coverage area. A friend of mine almost rented a place to put up an internet café but he canceled his plans when he found out that there is no broadband internet service available for the area.

7. Be aware of the local ordinances and zoning policies

Don’t jeopardize your business by operating illegally.

Make sure that your business location will not break any city ordinance or zoning policy. For example, adult entertainment establishments are normally banned from operating within a certain distance from schools.

Furthermore, you should also be aware of other local regulations that could affect your business operations. For example, most homeowners’ associations ask for monthly fees to operate a business inside their subdivision. You should become aware of this and include it in your initial capitalization and list of overhead costs.

8. Consider possible plans for expansion

This may not be an immediate concern, but optimistically thinking about business expansion helps in determining the potential of your desired location. Moving your business to another location is not an easy task. That’s why you have to consider the options available if ever your business would grow and require more space.

If it’s not possible to rent out the adjacent lots or do a reconstruction of the place, then at least go around the area to see if there are bigger and better spaces you can move into when the time comes.

Source: Businessmirror.com

6 Ways Foreigners Can Own Land & Buy Real Estate in the Philippines

Compared to other countries, the Philippines undoubtedly still has a highly-regulated real estate industry. There are very strict rules regarding non-Filipino citizens purchasing, owning, and investing in real estate and, by default, foreigners are not allowed to own land.

There are some exceptions to this rule, though. There are at least six (6) cases wherein Philippine laws allow a foreigner to buy and own a property — yes, including land.

So if you’re a foreign citizen looking to purchase and own land, check out our guide below to assist you regarding real estate purchase and ownership in the Philippines.

Content Guide:

1. Are foreigners allowed to own land in the Philippines?

2. Exceptions allowing foreigners to acquire land in the Philippines

3. #1. Acquisition before 1935 Constitution

4. #2. Acquisition through hereditary succession

5. Order of hereditary or intestate succession under Philippine law

6. #3. Purchase of a condo unit

7. #4. Purchase of land by a corporation

8. #5. Purchase by a foreigner married to a Filipino

9. #6. Purchase by a foreigner who was natural-born Filipino

10. Land ownership rules for foreigners who were natural-born Filipinos

11. Foreigners with Special Retirement Visa can own land in the Philippines?

12. FAQ on Land Ownership for “Natural-Born Filipinos”

1. Are foreigners allowed to own land in the Philippines?

As a general rule, ownership of any land in the Philippines is exclusive and limited only to Filipino citizens. This is enshrined in the 1987 Philippine Constitution. However, there are several exceptions that would allow foreigners to own land or acquire real estate property in the Philippines. We explain them in more detail below.

2. Exceptions allowing foreigners to acquire land in the Philippines

1. Property was acquired prior to the 1935 Constitution;

2. Property was acquired through hereditary succession, with the foreigner being a legal or natural heir;

3. Purchase of a unit or units in a condominium project, subject to 40% foreign ownership limit in the condominium corporation;

4. Purchase of land by a domestic corporation, subject to 40% foreign ownership rule;

5. Purchase by a foreigner married to a Filipino;

6. Purchase by a foreigner who was originally natural-born Filipino, subject to limitations set by the law.

We explain each scenario below.

3. #1. Acquisition before 1935 Constitution

This is pretty straightforward. A foreign citizen who was able to purchase and own land prior to the enactment of the 1935 Philippine Constitution will retain his or her ownership rights on that property.

Even though the 1935 Constitution has been already replaced by the 1987 Philippine Constitution, the new Constitution continues to recognize the right of a non-Filipino citizen to use and own the property, including land, as long as it was acquired by the foreign citizen before the 1935 Constitution.

4. #2. Acquisition through hereditary succession

The Philippine Constitution of 1987 is clear and explicit in its prohibition of land acquisition by foreign citizens. However, Article XII, Section 7 of the same Constitution includes a minor exception that allows heirs to acquire the property, even though the heir may be a foreigner.

According to the relevant section of the 1987 Constitution:

“Section 7 (Article XII). Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.”

Simply speaking, if the foreign citizen is a legal or natural heir by hereditary succession and was duly included and instituted in the “Last Will and Testament” by a property owner, then that foreigner is allowed by Philippine laws to acquire said real estate property.

Again, the law will still have to check if the foreigner instituted in the will is a “compulsory heir” by virtue of “hereditary succession”. According to Article 887 of the Philippines’ New Civil Code, “legitimate children and descendants, with respect to their legitimate parents and ascendants” are considered compulsory heirs.

This was also reiterated by Atty. Persida Acosta of the Public Attorney’s Office (PAO) in her column in The Manila Times: “if the said non-Filipino has been instituted in a will as an heir to a real property; he is capacitated to acquire the said real property on the basis of the will. The provision of the Constitution is clear that even non-Filipino citizens can own real properties in the Philippines by virtue of hereditary succession.”

The same rules apply for “intestate succession” or in cases where the land owner died without leaving a “Last Will and Testament”. The foreigner, by virtue of intestate succession, is allowed by Philippine laws to own and acquire the land.

Specifically, the order of intestate or hereditary succession recognized by the law is as follows, starting from the first (#1) to the last (#7):

5. Order of hereditary or intestate succession under Philippine law

1. Legitimate children or descendants of the deceased;

2. Legitimate parents or ascendants;

3. Illegitimate children or descendants;

4. Surviving spouse;

5. Siblings (brothers and sisters), nephews, and nieces;

6. Other collateral relatives within the fifth degree; and finally,

7. The State (Philippines).

Can a foreigner, who is not related at all to the land owner, be legally assigned in the last will and testament as heir who will inherit the land? Philippine laws do not allow this. Foreign citizens are allowed to inherit land only by virtue of hereditary or intestate succession (dying without leaving a will).

Testamentary succession, or inheriting land merely by being included in the will, is not allowed. Current laws disallow this because this could be used as a circumvention of what’s prescribed in the Philippine Constitution. If this was allowed, foreigners can just pay any land owner to assign them to be their testamentary heirs so they can inherit and thus own land.

6. #3. Purchase of a condo unit

This third scenario is perhaps the easiest to understand since this has been typically cited as the most common way for a foreigner to own property in the Philippines.

Under the Condominium Act of the Philippines or Republic Act (RA) 4726, foreign citizens are allowed to buy condo units in any condominium project, as long as foreign ownership of that project does not exceed 40%.

For example, let’s say Condominium Project X is currently offering 100 units for sale. Under the law, all 100 unit owners become owners of Project X Condominium Corporation, the residual owner of the condo building. The condo developer may market and sell condo units to foreigners as long as the percentage of foreign ownership in that project will not exceed 40%.

So if for example, the following groups of foreigners bought the following units of Condominium Project X:

• 20 Chinese citizens bought 1 condo unit each = total of 20 units

• 8 Korean citizens bought 2 condo units each = total of 16 units

• 1 American citizen bought 4 condo units = total of 4 units

• Total condo units in Project X owned by foreigners = 40 units

Given that the foreigners’ ownership in the condo project is a combined total of 40 units out of 100, the required 40% foreign ownership limit is met and this is, therefore, allowed. Anything above that, say 41 units or more, is illegal and a violation of the law.

But who’s in charge of monitoring the foreign ownership percentage of the condo? Definitely, it will be unfair to pass that burden to the foreigner buying the unit. This responsibility lies with the management of the condominium corporation or the condominium homeowners’ association. They are in charge of regularly and religiously checking that foreigners only own up to 40% of the units sold in that condo project.

Wait, does it mean that since foreigners can own condo units, they also own the land where the condo is situated on? No, not really.

The land where the condo was built is not owned by any individual owner. In reality, the land is owned by the Condominium Corporation. (However, in cases where the land is merely leased and not bought and acquired by the condominium corporation, the land is likely owned by another company and will revert to the latter upon extinction of the lease of the condo building.)

For lands owned by the Condominium Corporation, upon termination of the corporation (usually after 50 years from its incorporation), the unit owners will vote and decide what to do with the land. These are their typical options:

• choose to demolish the building and erect a brand-new condo, while simultaneously instituting a new condominium corporation that will own the new building; or

• decide to sell the land where the existing building is situated on, while sharing among themselves the proceeds of the sale depending on their ownership stake in the condominium corporation.

7. #4. Purchase of land by a corporation

A valid and legal loophole used by foreigners looking to own land in the Philippines is through the creation of a domestic corporation. This simply requires the establishment of a company to be registered with the Securities and Exchange Commission (SEC).

The only requirement is that the corporation must still abide by the 40% foreign ownership rule, which means Filipinos must still have majority ownership — at least 60% stake in that corporation.

Once approved by the SEC, the corporation may now purchase any real estate property, including land, house and lot, condominium units, or commercial buildings. As part-owner of this corporation, the foreigner can enjoy the use and benefits of the acquired property. However, the foreigners’ combined stake in the ownership is limited to just 40%.

Upon dissolution of the corporation, the foreigner is entitled to receive his proportionate share in the remaining assets of the company, but this doesn’t mean he can get to own the land owned by the corporation. The land may be sold and the cash proceeds distributed to the owners, including the foreigner.

8. #5. Purchase by a foreigner married to a Filipino

If a foreigner is married to a Filipino citizen, the foreigner is allowed to buy land but — here’s the catch! — the title of the land (called the TCT or Transfer Certificate of Title) will be in the name of the Filipino spouse. The foreigner’s name may be included in the Contract or Deed of Sale, but it cannot be in the TCT or land title.

Yes, the foreigner may have purchased and acquired the land but in reality, he does not “own” it. For one, he is not allowed to dispose the land unilaterally, that is, without the explicit permission of the Filipino spouse who is the actual “owner” as per the land title.

In the event of death of the Filipino spouse, the foreigner becomes the natural heir of the property. Since the foreigner is not allowed to own land, the available options include:

• Disposing the property within a reasonable amount of time and collecting the proceeds of the sale;

• Passing ownership to the children or legal heirs; or

• Passing ownership to the Filipino spouse’s relatives, in case the couple is childless.

9. #6. Purchase by a foreigner who was natural-born Filipino

Natural-born Filipinos who lost their Filipino citizenship and acquired foreign citizenship are eligible to own lands in the Philippines under the 1987 Constitution. The relevant provision states that:

“Section 8 (Article XII). … a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.”

This simply means foreign citizens, who were former natural-born citizens of the Philippines, are eligible to acquire and own lands.

First things first, what is a “natural-born Filipino”?

The Philippine Constitution defines a natural-born Filipino as a “citizen of the Philippines from birth without having to perform any act to acquire or perfect their Philippine citizenship.”

Specifically, the following people are classified as natural-born Filipinos:

• A citizen of the Philippines at the time of the adoption of the 1987 Constitution;

• Born after January 17, 1973, whose fathers or mothers are citizens of the Philippines at the time of their birth;

• Born before January 17, 1973, may be born anywhere in the world, to a Filipino father; or to a Filipino mother and that person elects Filipino citizenship upon reaching the age of majority (which is 18 years old)

• Naturalized under the Philippines’ Naturalization Law;

• A citizen of the Philippines who married a foreigner but have not renounced their Filipino citizenship

• Those who acquired Dual citizenship (i.e., Filipino and another citizenship);

• Those who acquired Derivative (origin or descent) citizenship (i.e., the unmarried child, legitimate or not or adopted, below 18 years of age, of those who re-acquired Philippine citizenship upon effectivity of RA 9225 or the Citizenship Retention and Re-acquisition Act of 2003)

The specific laws governing land ownership rights of natural-born Filipinos, who acquired foreign citizenship, are Batas Pambansa 185 (BP 185) enacted in 1982 and Republic Act 8179 (RA 8179), which amended the Foreign Investment Act of 1991.

10. Land ownership rules for foreigners who were natural-born Filipinos

Here are the limitations for land ownership of non-Filipino citizens who were originally natural-born Filipinos:

1. Lot area limits for acquisition of land to be used for residence:

• 1,000 square meters (sqm) of urban land

• 1 hectare of rural land

2. Lot area limits for acquisition of land to be used for business or commerce:

• 5,000 square meters (sqm) of urban land

• 3 hectares of rural land

Either of the spouses (who are both former natural-born Filipinos) may avail of this privilege, but the total acquisition shall not exceed the maximum area allowed.

In addition, those who acquired urban or rural land for residential purpose while still a Filipino citizen may acquire additional urban or rural land for residential purposes, provided that when added to that already owned, the total shall not exceed the maximum area stated above.

Similarly, the same rules apply to those who already own urban or rural land, while still a Filipino citizen, to be used for business purposes.

The same land ownership guidelines state that a natural-born Filipino may acquire not more than two (2) lots which should be situated in different municipalities or cities anywhere in the Philippines, provided that the total area of those lots do not exceed 1,000 sq. m. for urban land or one (1) hectare for rural land for use as residence, or do not exceed 5,000 sq. m. for urban land or three (3) hectares for rural land for use in business.

The law also disallows a person who already acquired urban land for residential purpose to acquire rural land for residential purpose and vice versa. We have a specific example explaining this in the FAQ below.

In addition, under Section 4 of Rule XII of the Implementing Rules and Regulations of RA 704 as amended by RA 8179, a transferee who has already acquired urban land shall be disqualified from acquiring rural land and vice versa. However, if the transferee has disposed of his rural land, he may still acquire rural land and vice versa, provided that this will be used for business.

We have more practical examples of the application of these land ownership rules for natural-born Filipinos in the FAQ below, but for now, let’s answer a question that has confused some foreign retirees looking to own land:

11. Foreigners with Special Retirement Visa can own land in the Philippines?

There is, unfortunately, a misconception among foreign retirees in the Philippines, specifically those holding a Special Resident Retirees Visa or SRRV, on whether they are allowed to own land.

According to the Philippine Retirement Authority (PRA), the agency in charge of issuing SRRV, foreigners holding an SRRV are NOT allowed to own land or real estate property in the Philippines.

If the foreign retiree is legally married to a Filipino citizen, the foreigner may purchase land but, like in Case No. 5 above, the property will be registered in the name of the Filipino spouse.

The exception is a foreign retiree holding an SRRV who was a former natural-born Filipino. The applicable rules will be the same as the rules for natural-born Filipinos who acquired foreign citizenship, as stated in Case No. 6 above.

12. FAQ on Land Ownership for “Natural-Born Filipinos”

Question #1: I am a former natural-born Philippine citizen but have become a naturalized citizen of another country. Am I allowed to own land in the Philippines?

Answer: Yes. Any natural-born Filipino citizen who has lost Philippine citizenship may still own private land in the Philippines up to a maximum area of 5,000 square meters in the case of rural land. See ownership limits in Case No. 6 above.

Question #2: Can I purchase several lots located in different cities and municipalities if the total area of all lots does not exceed 5,000 square meters of urban land or three hectares of rural land?

Answer: A former natural-born Philippine citizen is allowed to acquire not more than two (2) lots situated in different municipalities or cities. The total area of the two lots should not exceed 5,000 square meters of urban land or three (3) hectares of rural land.

Question #3: If I am allowed to own a maximum of two lots situated in different municipalities or cities, can I own a 5,000 square-meter urban lot in one city (for example, Quezon City) and three hectares of rural land and vice versa?

Answer: No. A former natural-born Philippine citizen who has already acquired urban land shall be disqualified from acquiring rural land and vice versa.

Question #4: Is there a way for a former natural-born Philippine citizen to own more than 5,000 square meters of urban land or three hectares of rural land?

Answer: Yes. If a former natural-born Philippine citizen reacquires Philippine citizenship law, he can acquire land without area limit.

Question #5: I was a Filipino citizen who changed citizenship afterwards. What will happen to the land and properties I acquired when I was still a Filipino citizen?

Answer: Filipinos who lost their Philippine citizenship and acquired foreign citizenship will remain the owners of any property they have acquired before changing nationalities.

Question #6: Can my children inherit my land and property in the Philippines if I were already a foreign citizen when they were born?

Answer: Yes. Foreign nationals (even if they were not former natural-born Philippine citizens) can own land in the Philippines if they acquire it by inheritance. These nationals should, however, inherit the property by intestate succession.

Intestate succession means that the foreign national inherits the property because he/she is an heir under Philippine law. Naming one’s heir by simply executing a “Last Will and Testament” or a “Living Will” will not work to validly transfer real property in the Philippines to a foreign national.

Question #7: My spouse is a natural-born citizen of another country (foreigner). Can he buy a condominium unit in the Philippines and have the title in his name?

Answer: Yes. The land on which a condominium building stands is always owned by a condominium corporation. When a person buys a condominium unit, he automatically becomes a stockholder in the corporation which owns the land.

Under Philippine law, foreigners are allowed to become stockholders of a corporation which own land, but only up to a maximum of forty percent (40%) of the shares of the corporation. Foreigners, therefore, are allowed to own condominium units provided the total floor area owned by all foreigners in the condominium building does not exceed forty percent (40%).

Question #8: Is Philippine citizenship acquired by blood or by country of birth?

Answer: Philippine citizenship is acquired by blood (jus sanguini). A child is deemed a Filipino citizen if at least one of his parents was a Filipino citizen at the time of his birth. Even if the child was born outside the Philippines, the child is a Filipino citizen as long as at least one of his parents was a Filipino citizen. On the other hand, if both parents are non-Filipinos, the child is not a Filipino citizen even if he was born in the Philippines.

This is different from the US law that determines American citizenship by the country of birth (jus soli). Under US law, a child is considered an American citizen if he is born in the United States, even if both parents are not American citizens.

Question #9: Our son was born in the U.S. at the time when my wife and I were still Filipino citizens. One week after our son’s birth, my wife and I took our oath as US citizens. Did our son lose his Philippine citizenship when we became American citizens?

Answer: No. The child was vested with the Philippine citizenship at the time of his birth. He does not lose his Philippine citizenship even if the parents acquire foreign citizenship after his birth.

Question #10: My daughter was born in the U.S. at the time when my wife and I were still Filipino citizens. My daughter has been using a US passport for 20 years. She has never visited the Philippines. Is my daughter considered a Philippine citizen even if she already is an American citizen?

Answer: Yes. Philippine law allows dual citizenship. A child can both be an American citizen and a Filipino citizen at the same time. Under present laws, a person loses his Philippine citizenship if he renounces it. Using a US passport exclusively and not visiting Philippines does not amount to a renunciation of Philippine citizenship.

Question #11: If my child is born in the US at the time when my wife and I are still Filipino citizens, what should we do to document his Philippine citizenship?

Answer: A copy of the child’s birth certificate should be submitted to the nearest Philippine consulate will transmit the birth certificate to the Philippine Statistics Authority or PSA (formerly known as NSO or National Statistics Office) in the Philippines for registration purposes.

MRI: A Home Buyer’s must have

If you’re taking a home loan to buy a property, chances are: you’ll be required to pay for Mortgage Redemption Insurance, or MRI, by the bank as part of your loan arrangement.

And if you’re one the tens of thousands of first-time home buyers out there who are wondering why you need to fork out precious Pesos to pay for this home loan insurance, allow us to shed some light on MRI and what it means to your home loan deal.

What is MRI?

MRI is an insurance policy that provides financial protection for home loan borrowers and their families. Specifically, MRI helps settle outstanding home loan amounts in the event of death or total disablement of the borrowers.

Why Would You Need MRI?

MRI is essentially a protection mechanism for all people with home loans, and especially for households with sole breadwinners.

Generally, in the event of untimely death or disability of a home loan borrower (significantly if he or she is the main income earner), the greatest problem facing surviving households is their ability to pay off the remaining home loan. In many instances, the surviving family members may even need to sell off the property at less-than-competitive price just to pay off the outstanding amount.

By signing up for MRI, surviving family members will not be left with such burden because MRI covers part or the entire unpaid portion of a home loan.

How Does One Apply for MRI?

In the Philippines, home loan applicants do not need to go out of their way to find an MRI provider because MRI is usually incorporated as part of the home loan application process. Commonly, you’ll only be required to pay a single MRI premium. You will not need to pay a premium again throughout the entire duration of the policy.

Important Considerations for MRI

Like any other insurance policies, MRI has a specific insured amount as well as policy duration. Bear in mind that in the event of death or permanent disability, MRI would pay off ONLY the amount that is covered, within the time, as dictated by the policy. It does NOT pay for everything that the insured owes to the bank.

Due to the above reason, home loan applicants are generally advised to purchase MRI based on your specific requirements (instead of just going for the cheapest policies available). For sole breadwinners, buying maximum coverage is especially recommended despite a heftier premium, because your families are more at risk should anything happen to you. For households with multiple income winners, you may consider opting for a policy with lower coverage.

Source:imoney