Ease of Doing Business Law in the PH: How Will It Benefit Foreign Investors?

Ease of Doing Business Law in the PH- How Will It Benefit Foreign Investors

It has always been a frustrating endeavor whenever you set foot in government institutions and try to process documents to start a business. Long lines; inept, corrupt or often lazy employees; and red tape can be discouraging. This kind of environment turns away not only citizens who want to run their own business, but also foreign investors who wish to set up shop in the country.

Foreign investments provide tremendous benefits that include an employment boost to help each recruitment agency in the Philippines fill open positions, ultimately affecting economic growth from a stronger buying power. Fortunately, the current administration made an effort to address the issues that hound the delivery of services by the government when President Rodrigo Duterte signed into law Republic Act No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act on May 28, 2018.

The new law is an amendment of the Anti-Red Tape Act of 2007, which aims to make the process of setting up and running a business simpler and more efficient. The president is hopeful that the law will ‘solve the perennial problem of bureaucratic red tape’ that has infested the government and ‘spare people of intolerable waiting time.’

According to legislators, the law was created with the purpose of attracting more foreign investments to the Philippines. This comes after the country slid down nine places in the 2018 World Competitiveness Yearbook—the worst slump of any other country in the Asia Pacific region.

Now that the country has a more supportive climate for foreign investors to start and run a business in the Philippines, here are the most notable features of the law that we can all benefit from.

1. Standard Deadline for Government Transactions

Simple transactions dealt by business entities with the government are set to be processed within three days. They are given up to seven days for more substantial transactions, and 20 days for technically complex transactions.

2. One Unified Business Application Form

Entrepreneurs won’t have to fill out multiple forms and submit them to various government institutions to start a business with the new law. It now uses a single form that incorporates the other separate forms in the past including building clearance, fire clearance, local taxes, sanitary permit, zoning clearance and the usual local government unit requirements. A unified form for new business permits and renewals will be used.

Other clearances and permits such as environmental and agricultural clearances, sanitary permits and other local permits are going to be granted along with the business permit that shall be valid for a year.

3. A One-Stop Shop for Businesses

Setting up a business before can be a daunting task since you have to visit multiple facilities just to process your documents. But with the new law, the local government units are mandated to set up a ‘one-stop shop’ or a facility that puts all the business permit and licensing offices in one location for easier and faster processing.

4. Zero-Contact Policy

There is a new provision in the law aside from the ‘preliminary assessment’ stage of the business application and the submission of requirements. It states that ‘no government officer or employee shall have any contact, in any manner, unless strictly necessary with any applicant or requesting party concerning an application or request.’ This is done to get rid of corruption across government agencies that handle business applications.

5. Automated System with a Central Business Portal and Databank

Local government units are instructed to automate their systems that are used to process business permits. They are also required to set up an electronic business one-stop shop to handle an entrepreneur’s needs—both local and foreign—within three years of the law’s enactment.

All applications are directed to a central business portal (CBP) that is going to be established by the Department of Information and Communications Technology (DICT), while a Philippine Business Databank (PBD) is going to serve as a storage of information on all the registered businesses in the country that may be used by the government as a means for verification.

With the law in place, both Filipinos and foreign investors will have a more pleasant experience in starting and running a business in the Philippines. The new law will have an enormous impact on the country’s economy while giving opportunities to highly skilled and hardworking Filipino workers who are looking to find better employment.

Foreign investors will find renewed interest in the country with this law strictly enforced. The expected influx of foreign capital will inject life into the economy by increasing international trade, promoting modernization through the sharing of technology and knowledge, and developing human capital resources.

These are just some of the many wonderful benefits the country would glean from this law, but the best would be the change it would bring to the old culture revolving around how people run things in the Philippine government. That is definitely something to look forward to.


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Lawrence Barrett