PH still a strong investment hub; Brankas, BOI urge firms to invest

Incentives under CREATE Act seen to boost growth in all sectors


The Philippines remains a strong investment hub in the region owing to the resilient business climate and increasing investment opportunities, according to the Board of Investments (BOI). Partnering with Brankas, a digital and open finance company that strengthens financial inclusion, they discussed the benefits of registering a foreign company locally and why they should set up shop in the country.

The influx of direct foreign investment and resources from new international enterprises can also jumpstart the national economy that is moving towards recovery. All these were discussed in the recent webinar aptly entitled, “Why Should You Set Up Your Company in the Philippines?” organized by Brankas and the BOI which expounded on the benefits of Republic Act 11534 or Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act).

Lanie O. Dormiendo, BOI Officer in Charge (OIC) – Director for International Investments Promotions Service (IIPS), shared how the BOI supports investors by providing due diligence assistance, business registration facilitation, and after-care service.

Dormiendo emphasized that the Philippines, especially its hardworking force, remains attractive to investors, particularly because of the resilience it has shown before and during the pandemic. Prior to the lockdowns, the GDP growth stayed consistent at 6.6% from 2016-19. She cited a May 2020 report from The Economist stating that the Philippines ranked 6th among emerging market economies (EMEs) and first among its Southeast Asian (SEA) peers even during the pandemic. Dormiendo shared, “We recognize that the global economic situation is still very challenging, but we are also happy to note the continued business interest of foreign investors in the Philippines.”

Meanwhile, BOI OIC – Division Chief Remedios Lim explained how the CREATE Act can benefit current and future investors in the country, creating a synergistic approach that would push the economy towards recovery in the years to come. Signed on March 26, 2021 and effected on April 11, 2021, the law provides the following incentives for investors:  income tax holidays (ITH); special corporate income tax; enhanced deductions; exemption on importation of capital equipment, raw materials, spare parts, or accessories; VAT exemption on importation; and VAT zero-rating on local purchases.

Lim stated that the “CREATE Act covers all investment promotion agencies (IPA) like the BOI, Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA), among others. This means that all IPAs are adopting a uniform policy and offering a single menu of incentives that will provide options to firms to choose which IPA they opt to register.”

Brankas likewise shared their experience in the Philippines. Brankas CEO Todd Schweitzer provided insights into their tech company’s journey in establishing themselves in the country and how the BOI helped throughout their initial stages in 2019. Brankas, which specializes in digital banking software and infrastructure that enable Open Finance and APIs in the Philippines and Asia, obtained pioneer status “as a technology company bringing something new into the Philippines.” He also described the registration process with BOI as a “very smooth experience” and encouraged more businesses to register with the BOI, especially in the technology sector.

Brankas Business Development Lead Clarence Bondoc shared how BOI helped them focus on the development of their products and services as a start-up in the market. He shared, “These incentives actually eased those burdens. Instead of worrying about the tax or financial concerns, these really provide a conducive environment so that a start-up is able to focus on providing a good product to the market.”

Bondoc said that its tech status further empowers Brankas to promote Open Finance in the Philippines:  “Technology, products, and policies will enable customers to securely use financial services from qualified third-party providers.”

Open Finance links start-ups and SMEs to banks and other financial institutions, widening their access to finance and other resources. At the same time, its tech solutions enable these enterprises to reduce red tape while enhancing their own resources in the digital space.  Startups in Open Finance and other fintech platforms might increase along with the foreign investment coming into the country, drawn by BOI incentives.

To know more about Brankas and their different technology solutions, visit brank.as. To learn more about incentives that come with the BOI registration, visit https://www.officialgazette.gov.ph/downloads/2021/05may/20210618-IRR-RA-8424-RRD.pdf   https://boi.gov.ph/investors-guidebook/


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Gabriel

Introvert, wanderer, blogger, foodie, a hip-hop music writer, and one of the co-founders of a tech start-up company called GigsManila.