26 July 2019
PHILIPPINES: State Moves to Support Start-Ups and Provide Easier Access for Overseas Investors
In a bid to promote innovation among its micro, small and medium enterprises (MSMEs), as well as to ease the entry of foreign investors into the country’s emerging start-up sector, the Innovative Start-Up Act has recently passed into law. This new legislation has been designed to facilitate state support for innovative domestic enterprises and start-ups, while also introducing a visa incentive scheme for overseas investors willing to back local start-ups.
Under the terms of the new law, three government agencies – the Department of Science and Technology (DOST), the Department of Information and Communications Technology (DICT) and the Department of Trade and Industry (DTI) – have been tasked with rolling out the Philippine Start-Up Development Program over the next two months. The scheme, to be implemented in collaboration with a number of Local Government Units (LGUs), is intended to give local businesses and start-ups access to training and accelerated growth programmes.
Such businesses will also be offered full or partial exemptions from business registration and permit costs as well as the use of repurposed government facilities as working spaces. In addition, the scheme will connect start-ups with domestic and overseas mentors, as well as would-be investors and customers.
The three agencies will also be managing individual Start-Up Grant Funds, which will all provide financial support for research, development, training and expansion projects on the part of both start-ups and business incubators. In order to be eligible, businesses must qualify as a start-up and be approved by an individual LGU.
In terms of easing access for overseas investors, the new legislation includes the provision of three new five-year visas – Start-Up Investor, Start-Up Owner and Start-up Employee. Holders of such visas will not be required to secure an Alien Employment Permit.