MEMORANDUM

FROM: ASISCLO CASTANEDA

RE: Housekeeping Business

DATE : 22 May 2018

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Option 1: Setting up a New Corporation

Under the Revised POEA Rules and Regulations, only the following can be licensed to operate a private
employment agency:

1. Filipino citizen acting as a sole proprietor or partnership or corporations at least seventy five percent
(75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens;

2. A minimum paid-up capital of Five Million Pesos (P 5,000,000.00);

3. Those not otherwise disqualified by law or other government regulations to engage in the recruitment
and placement of workers for overseas employment.

Provisional License

Applicants for new licenses shall be issued a provisional license which shall be valid for a limited period
of a non-extendible period of two (2) years from date of issuance. It must be emphasized that agencies
with provisional licenses CANNOT deploy domestic workers.

Regular License

A provisional license may be upgraded to a regular license at any time during its validity upon
deployment of one hundred (100) workers to its new principal/s

Estimated Costs

Filing Fee P 25,000.00

Capital P 5,000,000.00
License fee P100,000.00
Escrow P1,000,000.00
Equipments and Fixtures P 500,000.00
P 6,625,000.00

Timeline

The Incorporation of a New Corporation will take around 2 Months. Application of a new POEA License
could take 6 months to 1 year. Post-Incorporation will take 3 to 6 months.

Pros
 1. The Corporation could be set up with the Corporate Structure we want and housed in the office
where we want.
2. It is new and fresh new license that has no current issues or cases.

Cons
1. Cannot deploy Housekeepers initially for the initial 100 deployed workers
2. It takes a longer time to obtain the license and for the office to be operational.
3. There should already be an Office space.
4. The staff needs to be hired and trained.

Option 2: Purchase an existing valid POEA License and currently in operation

The following are option of Agencies with Valid POEA license.

1. 14 Million – A licensed recruitment agency with a valid POEA license until 2018 located in
Makati with no pending cases or claims. It is an all-in sale including the current job orders,
escrow deposit and continuing of the office and staff. There current job orders are only skilled
workers to the Taiwan, Kuwait, Bahrain, Lebanon and Middle East countries.

2. 14.5 Million - A licensed recruitment agency with a valid POEA license until 2020 located in
Quezon City with no pending cases or claims. It is an all-in sale including the current job orders,
escrow deposit and continuing of the office and staff. There current job orders are skilled
workers to Taiwan, Middle East and kuwait.

3. 14.5 Million - A licensed recruitment agency with a valid POEA license until 2020 located in
Pasig City with no pending cases or claims. It is an all-in sale including the current job orders,
escrow deposit and continuing of the office and staff. There current job orders are skilled
workers to Middle East.

4. EMCJ manpower located at Tomas Morato, Quezon City with license validity upto 2021. Current
deployment destination are the following: SINGAPORE, QATAR, SAUDI and skilled workers to
Japan. The price is at 14 Million with no pending cases or claims. It is an all-in sale including the
current job orders, escrow deposit and continuing of the office and staff.

Steps
1. Conduct a Due Diligence
2. Negotiation of the transfer / Sale
3. Inspection of the Office and staff
4. Preparation of Documents for sale/transfer of shares of stocks
5. Payment of taxes
6. Inform and Register the change of stockholders and directorship with the government agencies
7. Register/Accredit a Principal and Getting a license to send OFW to Japan
8. Send workers

Timeline

The Due Diligence and negotiation would take around three months to half a year.

Pros
 1. The business is already set-up and operational and could continue the operations as soon as
possible.
2. There already has an existing office and employees who know the operations of the business.

Cons
1. A Due Diligence should be conducted to know the current status and liabilities of the agency.
2. Even if there are currently no cases filed, current or past OFW of past Job Orders can still lead to
cases.
3. The cost of purchase of a valid existing is higher since it has already existing business
4. We do not know the employees and the OFWs.

Proposed Corporate structure for Corporation

Capital Structure

1. 25% - Hiong Guan Japan or Takigawa Family

2. 75% - CSM

Directors

1. Maria Castañeda – President

2. Atricia Castañeda – Corporate Secretary
3. Susan Castañeda – Treasurer
4. Rogelio Pagador – Director
5. Miki Takigawa – Director

Operations Procedures

To be able to hire a Filipino worker for an overseas job, the following steps must occur:

A foreign employer must find a Philippine recruitment agency that will seek a qualified candidate
(applicant) for the job that he/she will offer. The agency that the employer must deal with should be
accredited and licensed by POEA.

1. The foreign employer will then submit all necessary requirements (documents that will prove the
need to hire an overseas employee, existence of job/project, among others) to the nearest POLO
office for verification purposes.
2. Upon verification, the employer will submit requirements such as the Job Order/Manpower
requirements to the agency where in turn the agency will submit such to the POEA for
accreditation.
3. The agency, will now post a job vacancy advertisement and wait for applicants to submit their
resumes.
4. The agency will collate resumes and curriculum vitaes of qualified applicants, other requirements
and then send it to the employer.
5. The employer or the agency may conduct exams and interviews (either via personal or online
interviews) to assess the applicants suitability for the job.
6. When a qualified candidate is chosen, he/she is presented with the employment contract, and all
other documentations will be prepared (passport, medical exam test and result, NBI/Police
Clearance, Birth Certificate, etc.). Fees to be paid for this documents must be shouldered by the
 applicant. He/She is also required to attend a Pre-Departure Orientation Seminar (PDOS) since
the purpose of traveling abroad is for employment. Placement fee may be collected from the
applicant by the agency unless he/she is bound to work in countries that prohibits collecting
placement fee from the applicant.
7. The agency, on behalf of the applicant will then submit the documents to POEA together with the
payment that covers the recruitment, documentation and placement of worker, such as the POEA
processing fee, membership with the Overseas Worker Welfare Administration (OWWA), visa
fee and PhilHealth-Medicare contribution (for one year coverage). All these fees are shouldered
by the employer.
8. The POEA will issue an E-receipt upon payment of the fees. The E-receipt serves as the
applicant's POEA travel exit clearance. This attests that your recruitment was proper and your
papers are valid. The E-receipt serves as your guarantee that you are covered by government
protection and benefits. The E-receipt exempts you from travel tax and airport terminal fee. The
applicant needs to present it at the POEA Labor Assistance Center (LAC) and the Bureau of
Immigration (BI) counter at the airport before departure.

Other things to remember:

1. There is no Placement Fee for Japan OFWs
2. Training fee (Japanese language, culture, values) here in Philippines, and in Japan, is at NO cost
to selected/hired workers
3. Maximum 3 years contract.
4. LIVE-OUT arrangement (dorm or staffhouse provided by Japanese Accepting company)
5. Flexible work hours, with guaranteed 35 paid hours per week, and 1 day off weekly.
6. Statutory deductions in Japan, are deducted from salary: applicable taxes & insurances, housing
expenses, utilities

Qualifications for General Housekeepers for Japan

1. Female
2. At least 1 year working experience as Household Worker/ Domestic Helper
3. 28-45 years old ONLY
4. Preferably with NC II from TESDA (Household Services or Domestic Work)
5. Japanese language

Costs Breakdown

OFW Pays:

 Passport
 NBI/Police Clearance
 Authentication
 Birth Certificate and Marriage Certificate
 Medicare/Philhealth
 Immunization
 Medical Certificate
 Placement fee if allowed

Principal Pays:

 Visa
 Airplane Ticket
  OWWA membership fee
 POEA processing fees
 Service fee/Agency fee

Most common problems encountered by OFWs

1. Becoming a victim of Illegal Recruitment
2. High placement fees
3. Employer abuse
4. Extra-marital relationships and broken families
5. Landing in jail for offenses they did not commit
6. Failed family business
7. Dwindling value of the Philippine Peso
8. Getting caught in violent uprisings and natural disasters abroad.
9. Unable to get assistance from consular and embassy officials abroad.
10. Compelling family problems back home
11. Wanting to be a citizen or immigrant by marrying a citizen
12. Using the agency to enter the country and then leaving the employer to look for better
opportunities
13. Language and culture barriers

Sources of Income

1. Placement
Recruitment agencies are allowed by law to collect placement fees from deployed OFWs.

Filipino household service workers (HSWs) bound for Japan must not be asked to pay for their placement
fee.

This was the stern reminder of the Philippine Overseas Employment Administration (POEA), saying it is
not allowed under their newly-released guidelines for the HSW hiring in Japan. “Collection of placement
fees from the housekeepers by Employment Agencies, Sending and Specified Organizations for
placement of housekeepers is prohibited,” said POEA Governing Board Resolution 08-2016.

How much should a placement fee be?

POEA-licensed recruitment agencies are allowed to collect placement fees that is equivalent to the one
month salary of the deployed OFW. Some countries such as Taiwan may charge fees more than the one
month salary because of additional fees such as broker’s fees, etc. However, this fee should be paid in
installments.

When should one pay the placement fee?

Applicants will only pay the placement fee once they have already signed an employment contract. They
can choose to pay only half of the placement fee at this point. The other half can be paid when the agency
gives the plane ticket and other travel documents of the OFW.

Recruitment agencies should not collect placement fees before an employment contract is signed.
Applicants should remember that any agency/recruiter who demands payment right away is most
probably illegal.
Some deploying countries such as USA (for those under H2B visa), United Kingdom (UK), Netherlands,
Ireland and some parts of Canada (British Columbia, Alberta, Manitoba, Saskatchewan) and Japan
prohibit collection of placement fees.

Household service workers (HSWs) and caregivers are also exempted from paying placement fee.

What are the fees that OFWs are exempted from paying? OFWs are exempted from paying airport fees
and travel tax. They just need to present their Overseas Employment Certificate (OEC) or any other
documents from POEA to avail this privilege.

Training Fee
There are many jobs abroad that require special skills. If you want to increase your chances of getting
hired, then consider getting necessary training with corresponding certificate to prove completion.

Processing and Other Related Fees

Apart from placement fee, you might also be asked to pay for processing fees.

Processing fee is the cost your employer spent for your deployment abroad. This includes yearly
contribution to social services like Philhealth and PAG-IBIG, visa fee, airfare, compulsory insurance,
OWWA membership, PDOS, and POEA processing fee among others.

Nonetheless, you are not required to pay for all of these costs. You are only mandated to pay for
Philhealth and PAG-IBIG, although PAG-IBIG is no longer mandatory. The rest of the costs must be paid
by your employer.

2. Service Fee

Agencies shall charge from their principals a service fee to cover services rendered in the recruitment,
documentation and placement of workers. The POEA shall provide incentives to agencies and employers
who are able to comply with this rule.

Computation

For 1 OFW – Domestic Helper

PHP

Remittance 40,000.00

Costs

Transportation 2,000.00

Medical Fee 1,800.00

Visa Stamping 550.00

PDOS 100.00

TESDA/Other Trainings 500.00

Insurance 2,310.00

OEC 2,600.00

Airline Ticket 10,000.00

Allowance for Repatriation 3,000.00

Total Costs 22,860.00

Gross Profit for 1 OFW 17,140.00

Estimated Operating Budget

PHP

Salaries 200,000.00

Rent 100,000.00

Communication Expense 10,000.00

Marketing Expense 10,000.00

Transportation Expense 10,000.00

Representation 10,000.00

Utilities 15,000.00

TOTAL 355,000.00
Profit per Month

INCOME SIMULATION FOR HOUSE KEEPERS

PHP USD
Estimated Operating Budget PHP 355,000.00 $ 7,100.00

NET INCOME Per HouseKeeper NO

AGENT PHP 31,470.00 $ 629.40

OFWS TO BE DEPLOYED PROFIT TO BE EARNED

10 PHP 314,700.00 $ 6,294.00 PHP -40,300.00 -$806.00 LOSS
15 PHP 472,050.00 $ 9,441.00 PHP 117,050.00 $2,341.00 BREAKEVEN
20 PHP 629,400.00 $ 12,588.00 PHP 274,400.00 $5,488.00
25 PHP 786,750.00 $ 15,735.00 PHP 431,750.00 $8,635.00
30 PHP 944,100.00 $ 18,882.00 PHP 589,100.00 $11,782.00
35 PHP 1,101,450.00 $ 22,029.00 PHP 746,450.00 $14,929.00
40 PHP 1,258,800.00 $ 25,176.00 PHP 903,800.00 $18,076.00 INCOME
45 PHP 1,416,150.00 $ 28,323.00 PHP 1,061,150.00 $21,223.00
50 PHP 1,573,500.00 $ 31,470.00 PHP 1,218,500.00 $24,370.00
60 PHP 1,888,200.00 $ 37,764.00 PHP 1,533,200.00 $30,664.00

NOTE This is under the assumption that we are only sending Housekeepers and that the base salary is at PHP80,000.00
per person. Each remittance is collected only upon deployment - the first months salary or via staggered means.
However, each is a new hire or new contract.

INCOME SIMULATION FOR SKILLED WOKERS

PHP USD
 Estimated Operating Budget PHP 355,000.00 $ 7,100.00

NET INCOME Per HouseKeeper NO

AGENT PHP 19,770.00 $ 395.40

OFWS TO BE DEPLOYED PROFIT TO BE EARNED

10 PHP 197,700.00 $ 3,954.00 PHP -157,300.00 -$3,146.00 LOSS
15 PHP 296,550.00 $ 5,931.00 PHP -58,450.00 -$1,169.00
20 PHP 395,400.00 $ 7,908.00 PHP 40,400.00 $808.00 BREAKEVEN
25 PHP 494,250.00 $ 9,885.00 PHP 139,250.00 $2,785.00
30 PHP 593,100.00 $ 11,862.00 PHP 238,100.00 $4,762.00
35 PHP 691,950.00 $ 13,839.00 PHP 336,950.00 $6,739.00
40 PHP 790,800.00 $ 15,816.00 PHP 435,800.00 $8,716.00 INCOME
45 PHP 889,650.00 $ 17,793.00 PHP 534,650.00 $10,693.00
50 PHP 988,500.00 $ 19,770.00 PHP 633,500.00 $12,670.00
60 PHP 1,186,200.00 $ 23,724.00 PHP 831,200.00 $16,624.00

NOTE This is under the assumption that we are only sending Housekeepers and that the base salary is at PHP70,000.00
per person. Each remittance is collected only upon deployment - the first months salary or via staggered means.
However, each is a new hire or new contract.