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 discourages not only citizens who want to run their own businesses but also foreign investors who wish to set up shop in the country and meet the requirements for working in the Philippines as a foreigner. 

Foreign investments provide tremendous benefits, including an employment boost that helps each recruitment agency in the Philippines fill open positions, ultimately contributing to economic growth through stronger purchasing power.

What is the Republic Act No. 11032?

Fortunately, the government made an effort to address the issues that hound the delivery of services when then-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 to the Anti-Red Tape Act of 2007, which aims to simplify and streamline the process of setting up and running a business. The then-president was hopeful that the law would “solve the perennial problem of bureaucratic red tape” that had infested the government and “spare people of intolerable waiting time.” 

According to legislators, the law was created to attract more foreign investment to the Philippines. This comes after the country historically slid nine places in the 2018 World Competitiveness Yearbook—a slump this legislation was directly aimed at reversing. 

What are the Notable Features of the Ease of Doing Business and Efficient Government Service Delivery Act?

Now that we have an updated business law for a more supportive climate for foreign investors, adapting to the unique Filipino business culture is easier than ever. 

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

Under the new law, entrepreneurs won’t have to fill out multiple forms and submit them to various government institutions to start a business. It now uses a single form that incorporates the other separate forms in the past, including building clearance, fire clearance, local taxes, 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, will be granted along with the business permit, which shall be valid for a year. 

3. A one-stop shop for businesses

Setting up a business before can be daunting since you have to visit multiple facilities to process your documents. But with the new law, local government units are mandated to set up a “one-stop shop,” a facility that brings all business permit and licensing offices under one roof for easier, faster processing. 

4. Zero-contact policy

There is a new provision in the law aside from the preliminary assessment 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 eliminate 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 for processing business permits. They are also mandated to use an electronic one-stop shop for businesses to manage an entrepreneur’s needs, both local and foreign.

All applications are directed to a central business portal established by the Department of Information and Communications Technology (DICT), while the Philippine Business Databank serves as a repository of information on all registered businesses in the country, which the government may use 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 providing opportunities for highly skilled and hardworking Filipino workers seeking better employment. 

Foreign investors will show renewed interest in the country if this law is 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, making strategic workforce planning in the Philippines essential. 

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

Specialist Recruitment Solutions Delivering Unrivaled Results In The Philippines

Manila Recruitment is recognized as the leading recruitment firm in the Philippines for headhunting, executive search, and recruitment of experts, technical professionals, and IT professionals.

We share an unrivaled passion to help your business succeed by understanding your goals, then sourcing and providing you with your number one asset–driven, dedicated, and exceptional people.

Experience the Manila Recruitment difference and give your business in the Philippines a competitive advantage by contacting us today. Whether you are exploring an offshore solution or are an established entrepreneur, SME, or Multinational in the Philippines, our team has the experience and a tailored recruitment solution to connect you with top talent in the Philippines. 

Contact our Manila Recruitment team at hello@manilarecruitment.com.

DISCLAIMER: The information in this webpage / blog / article / infographic we have published and the associated commentary are presented as general information and is not a substitute for obtaining legal advice in this area. Manila Recruitment does not accept liability for any action taken based on the information presented or for any loss suffered as a result of reliance on the information provided.