A leader of the House of Representatives has asked the Department of Trade and Industry (DTI) and local government units (LGUs) to create a special office that would cater to start-up entrepreneurs and overseas Filipino workers (OFWs) who were displaced from the Middle East.
Nacionalista Party Rep. Luis Raymund Villafuerte of Camarines Sur, in a statement, also urged local chief executives to initiate ordinances that would provide incentives to start-up enterprises.
Through these proposals, Villafuerte said the government would be able to kick start the government’s stalled Philippine Roadmap for Digital Start-ups, which is supposed to come up with at least 500 start-ups in the country, with total funding of $200 million and a valuation of $2 billion by 2020.
“My proposal will not only benefit our returning OFWs, but also other budding entrepreneurs who have come up with innovative products, ideas or business models that need adequate funding to take off,” Villafuerte said.
“Many of our OFWs, who have accumulated a vast amount of experience and knowledge from working overseas, have a lot of potential to become successful entrepreneurs,” added Villafuerte, who is also vice chairman of the House committee on local government.
Meanwhile, Villafuerte said OFWs would find it “easier” to hurdle challenges to their star-tups if a bill he had filed in Congress were to become a law.
Under his House Bill (HB) 2882, the DTI is mandated to create a special start-up office, with an initial allocation of P100 million from the department’s funds, and is allowed to accept private- sector contributions and donations subject to certain implementing rules and regulations that would be promulgated once the measure is enacted into law.
The bill aims to provide tax incentives, streamlined business procedures and easier immigration for start-up entrepreneurs and their investors.
The measure also adopts the best practices in start-up communities and tailors them to fit the Philippine start-up ecosystem.
HB 2882 said the registered start-up enterprises should first apply for a “Startup Pilipinas” Certificate with the DTI to avail themselves of the series of incentives outlined in the measure.
Start-ups cover enterprises operating for no longer than 60 months and whose core business function involves product, process or business model innovations with a gross annual revenue not exceeding P250 million, the bill said.
The measure added start-ups should also ensure that their product, process or business is their primary source of revenue; they are not mere end-users of the innovative product, process or business model; and the cost of their enterprise for research and development is at least 15 percent of its total operational cost, or is a licensee or owner of a patent or registered software.
HB 2882 said the holders of startup certificates will be exempted from the following: 1) income tax arising from the operation of the enterprise; 2) value-added tax for the sale and lease of goods, properties or services arising in the course of trade of the enterprise or percentage tax; 3) creditable withholding tax on income; and 4) expanded withholding tax on its income payment.