The Innovative Startup Act (RA11337) was signed into law on 26 April 2019. The law aims to foster the growth and development of the Philippine startup ecosystem to improve the economy and create new jobs and opportunities. The primary beneficiaries of the said law are the startup enablers and inventors and/or developers of innovative products, processes or business models. Those who wish to become a beneficiary shall pass through an application and selection process done by the host agencies.
Under the Innovative Startup Act, those who passed through selection can avail of the following benefits:
- General Registration and Operational Benefits – Full or partial subsidy for registration and costs of permits and certificates for business registration and operation along with endorsement for prioritization for faster processing of applications. Full or partial subsidies for the use of repurposed government spaces and facilities will also be given.
- General Benefits for Participation in Local and International Startup Events – Host agencies shall provide support and subsidies to startups or startup enablers if they choose to participate in local and international startup events or competitions.
- Philippine Startup Ecozones – The Philippine Economic Zone Authority shall pursue and promote the creation of Philippine Startup Ecozones to spur the growth and development of startup and startup enablers through their private initiative, local government initiative with the assistance of the national government.
- Startup Investment Development Fund – the Department of Trade and Industry (DTI), in coordination with the Department of Information and Communications Technology (DICT), Department of Science and Technology (DOST) and Board of Investments shall spearhead initiatives to develop strategies in order to spur investment in and promote the growth and development of startups and startup enablers in the Philippines.
- Startup Grant Fund – the Startup Grant Fund under the DOST, DICT and DTI shall provide the initial and supplemental Grants-In-Aid (GIA) for startup and startup enablers.
- Startup Venture Fund – The Startup Venture Fund under the DTI shall be used to match investments by selected investors in startups based in the Philippines.
The Innovative Startup Act also provides for the creation of the following types of visas for foreigners who plan to support and/or invest in the startup economy of the Philippines:
- Startup owner visa – for prospective or current foreign owner of start or startup enabler registered in the Philippines.
- Startup employee visa – for foreign employee of a startup or startup enabler registered in the Philippines
- Startup investor visa – for prospective or current foreign investor of a startup or startup enabler registered in the Philippines.
These visas shall have an initial five-year validity and may be renewed or extended for another three years. Multiple-entry interim startup visas valid for six months to one year shall be issued for free to prospective startup owners, investors or enablers upon endorsement of the appropriate host agency.
The Department of Foreign Affairs and Bureau of Immigration shall promulgate the guidelines for the issuance of the startup visas, and immigration and admission of the holders of these visas respectively.
by: Ken Gacula for Avenida and Diaz Law Office