Joe knows a bit more about the details here than I do, but I can say that we've qualified for the tax exemption status.
Additionally, our corporate structure in the Philippines is like this:
- 95% owned by a US Corporation
- 1% owned by each of us (2% total)
- 1% owned by 3 individual Filipinos (3% total)
This approach is less common for companies as small as us, apparently, but we're pretty happy with how it worked out. I think we lucked out working with a law office that was aware of and familiar with this setup.
I DON'T think we could have necessarily avoided the lawsuit by just setting up another corporation here in the Philippines. We COULD have set it up, of course, but our attorney said it was likely to catch up with us. Something about the new business being a mirror/shell of the old one. The worry being that, at some point in the future, they'd latch on to our new corporation's bank account again.