Thanks to the positive forecast of the Philippines economy, firms are encouraged to invest in innovation by developing new products and services that could compete and represent the country in both local and foreign markets. However, starting a new business in the Philippines requires a certain amount of capital, which often discourages companies from pursuing their ventures. To address this challenge, Tax Incentives for Start-Ups in the PH are available to help ease the financial burden and encourage more entrepreneurs to enter the market. These incentives provide tax relief and other benefits that support business growth, making it easier for start-ups to allocate resources toward innovation and expansion. By taking advantage of Tax Incentives for Start-Ups in the PH, businesses can reduce costs, improve profitability, and contribute to the country’s economic development while fostering a more competitive business landscape.
To increase the number of startups in the Philippines, the government is exempting startup from tax during their first two years of operations. Called the Senate bill 2217, this new measure aims to help startups and give them enough time to grow, invest and build their company without allocating funds to taxes that limit their operations.
However, there are clear limitations as of who can benefit from this tax exemption. The tax exemption will not be applicable in the case of:
• Affiliates, subsidiaries or franchises of any existing company and also do not have any previous or other existing registered businesses.
• In the case of a corporation, each stockholder of the start-up enterprise shall have at least a five percent (5%) shares in stocks and the corporation shall have no nominal stockholders or stockholders holding the shares in trust for others. Provided further that, all stockholders of the start-up enterprise shall not have held shares of any previous or existing corporation with at least a five percent (5%) share therein, nor registered any former or existing sole proprietorship or partnership.
If you wish to know more about this new ruling and opportunity, do not hesitate to contact Triple I Consulting. With +100 companies registered since 2013, Triple is the right partner for companies and individuals looking to register their business in the Philippines and for tax consulting and advise.
