The Philippines is getting serious in promoting startups as a way to grow the economy. Through Senate Bill 2217 or the “Start-up Business Bill”, the government hopes to set a favorable business environment for budding entrepreneurs.
Before you get too excited, there are some caveats to the program since it’s designed for those new in entrepreneurship.
The start-up business bill was filed on May 2014 by Senator Bam Aquino and is currently awaiting passage into law. Indeed, it’s a very positive step in recognizing the contributions of startups in:
- Job creation
What’s a “startup”?
According to the bill, “start-up enterprises” are newly registered businesses either in industry, agribusiness, and/or services. Digital startups are covered under this broad definition, which also spans offline and more traditional sectors. It includes all ownership types – from sole proprietorship, cooperatives, partnerships, to corporations.
What does the bill mean for you?
As a cyberpreneur, you’ll be exempt from paying taxes in your fist two years of business! It covers both national and local taxes.
A tax break! How cool is that? You get to keep your earnings and reinvest it to grow your startup. It also gives you time to organize, develop, and learn what works for your fledgling business.
It doesn’t mean though that you should be lax on your finances and accounting. But it sure is a nice incentive to be shielded from dealing with taxes while you find a profit model for your business.
How do you qualify?
Before you get too excited, there are some caveats to the program since it’s designed for those new in entrepreneurship. In the proposed start-up business bill, you can qualify provided that:
- You comply with business registration requirements
- Your startup is not an affiliate, subsidiary, or franchise of an existing company
- For sole proprietorship or partnerships, you or your co-owners must not have any previous or existing businesses
- For corporations, each shareholder must have at least 5% shares, and that the stockholders don’t have more than 5% shares in any other existing business
The startup community welcomes the bill and hopes for its speedy implementation. We’ll stay tuned for when it’s given the green light by Congress!