House panel OKs bill to help startup businesses

The House Committee on Trade and Industry chaired by Rep. Ferjenel Biron (4th District, Iloilo) approved an amended substitute bill which seeks to provide benefits and programs to strengthen, promote, and develop the Philippine startup ecosystem.

The proposed “Innovative Startup Act of the Philippines” is principally authored by Rep. Luis Raymund Villafuerte (2nd District, Camarines Sur) and substituted House Bill Nos. 2882, 3057, 6609 and 7803.

“Innovative startup” as defined under the bill refers to a registered business entity in the country operating for no longer than 60 months from the commencement of its business operation whose core business function involves an innovative product, process, or business model.

Meanwhile, “support service provider” refers to any business entity that provides goods or services that are identified to be crucial in supporting the operation and growth of innovative startups, or enterprises whose core business function, which in the case of corporations, are indicated in their articles of incorporation, involves the targeted or exclusive provision of goods and services to innovative startups.

Committee Senior Vice-Chairman Rep Manuel Zubiri (3rd District, Bukidnon), who chaired the technical working group (TWG) created to harmonize the bills on innovative startup ecosystem, presented the substitute bill.

Zubiri, one of the authors of the bill said that after hearing the views and comments of all resource persons, the TWG agreed to take away the provisions on tax incentives and the creation of an innovative council and consider it on a separate proposed legislation. It also agreed to rewrite the provision on the innovative startup plan to make it purely private in nature, subject to style.

The bill declares that it is the policy of the State to foster inclusive growth through an innovative economy by streamlining government and non-government initiatives, in both local and international spheres, to create new jobs and opportunities, improve production, and advance innovation and trade in the country.

The State shall likewise provide incentives and remove constraints aimed at encouraging the establishment and operation of innovative new businesses, and businesses crucial to their growth and expansion, and to strengthen, promote, and develop an ecosystem of businesses and government and non-government institutions that foster an innovative entrepreneurial culture in the Philippines.

The bill calls for the creation of the Innovative Startup Development Program.

Under this Program, an innovative startup or support service provider shall be provided with benefits and incentives from the Department of Science and Technology (DOST), Department of Information and Communications Technology (DICT), and/or the Department of Trade and Industry (DTI) through their respective programs.

Among the objectives of the Innovative Startup Development Program are to support the research and development of innovative startups and support services in the Philippines; support and promote the access of an innovative startup to locally and internationally offered programs for innovative startups; support and promote the participation of innovative startups in international competitions; and support the participation of innovative startups in events that aim to link them to potential investors, mentors, and collaborators, among others.
The measure states that innovative startups and support service providers selected by the DOST, DTI, and DICT under their own respective application or selection process shall be entitled to benefits.

These are 1) registration benefits; 2) grants-in-aid for research, development, and expansion projects to be provided and approved by the Secretary of the granting agency; 3) exemption from fees and charges levied by the national government agencies for the use of equipment, facilities, or services availed by the innovative startup; 4) protection of patents and proprietary rights of innovative startups and support service providers from infringement; 5) access to applicable benefits and incentives provided by the Intellectual Property of the Philippines; and 6) subsidy for visa application, renewal, or extension of foreign owners, employees, and/or investors of an innovative startup and support service provided, and exemption from the alien employment permit.

The bill also seeks to create an Innovative Startup Visa which shall have an initial five year validity and may be renewed or extended with the three (3) year validity.

Bearers of the Visa shall be exempt from securing an Alien Employment Permit (AEP) issued by the Department of Labor and Employment (DOLE).

The suspension or revocation of the Visa shall likewise terminate the benefit of the exemption from securing the AEP.

Those who shall be eligible to apply for the Visa as provided under the bill are prospective or current foreign owner of an innovative startup or support service provider registered in the Philippines; prospective or current foreign employee of an innovative startup or support service provider registered in the Philippines; or prospective or current foreign investors on an innovative startup or support service provider registered in the Philippines.

Aside from the standard visa requirements, endorsement of a host agency, copy of the terms and conditions on the endorsement for the Visa application as may be required or agreed with the endorsing host agency and proof of eligibility are also required in the application of the Visa.

Authors of the bill are Reps. Victor Yap, John Marvin Nieto, Jose Antonio Sy-Alvarado, Gus Tambunting, Jose Enrique Garcia III, Biron, Xavier Jesus Romualdo, Lorna Silverio, Rossana Vergara, Milagrosa Tan, Maximo Rodriguez Jr., Jerry Trenas, Franz Alvarez, Rene Relampagos, Raul Daza, Jocelyn Limkaichong, Maria Lourdes Acosta-Alba, Mark Go, Deogracias Victor Savellano, Carlo Lopez, Juliette Uy, Francis Gerald Abaya, Sabiniano Canama, Ben Evardone, Paolo Javier, Mercedes Cagas, Seth Frederick Jalosjos, Teodoro Montoro, Yedda Marie Romualdez, Isidro Rodriguez, Jr., Ramon Durano VI, Henry Ong, Manuel Sagarbarria, Dennis Laogan, Michael John Duavit, Abdullah Dimaporo, Rodante Marcoleta, Raul Tupas, Raymond Democrito Mendoza, Ricardo Belmonte, Arlene Arcillas, Cecilia Leonila Chavez and Richard Eusebio.

SOURCE: Ma. Victoria Palomar (2019). Panel approves Innovative Startup Bill. 15 January 2019 11:06:13 PM. Press and Public Affairs Bureau of the House of Representatives.