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 Philippines in both local and foreign markets. Despite this, starting a new business in the Philippines requires a certain amount of capital which in many cases discourages companies to invest.
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.