The Philippines has issued two new online systems for business registration and tax incentive applications as the country aims to continue improving its business environment.
On 15 September 2021, the Securities and Exchange Commission (SEC), the government agency responsible for the Philippines’ company register, launched the One-Day Submission and Express Registration of Companies (OneSEC) feature of the Electronic Simplified Processing of Application for Registration of Company (eSPARC).
Through OneSEC, domestic corporations that are 100% Filipino-owned entities can register their business with the SEC within a single business day. In addition to being 100% Filipino-owned, the business must have incorporators, subscribers, and directors who are residents of the Philippines. Further, the corporation must have a “perpetual corporate term of existence” and be located outside an economic zone.
Applicants must first prefill their corporation’s main business activity based on the list of industry classifications in OneSEC. The system is also connected to the Electronic System for Payments to the SEC (eSPAYSEC)—the SEC’s online payment system—and fees can be paid via online banking or digital wallets.
Upon completion of the online registration process, the applicant can download the digital copy of their interim Certificates of Incorporation (CoI). Applicants can receive the original copy of their CoI once they present the digital copy to the SEC, along with the proof of payment and notarized copies of their registration documents.
Applications of Partnerships, Foreign Corporations
eSPARC can now accept applications for the registration of foreign corporations and partnerships that were previously done through the SEC Company Registration System (CRS). All pending applications from company registration to the in-form status of the CRS must reapply in eSPARC.
Registration for Tax Incentive Application
In addition to OneSEC, the government has also established the Fiscal Incentives Registration and Monitoring System (FIRMS), an online portal where investors can submit and monitor their applications for incentives in any of the country’s investment promotion agencies (IPA).
FIRMS enables the government to monitor the investment commitments of corporations such as the number of new jobs they create and the yield in economic benefits the business produces.
The system aims to fast-track applications and reduce the amount of administrative discretion for applicants, particularly those seeking to benefit from the incentives provided under the CREATE Act.
Businesses registered with an IPA are eligible for incentives under the CREATE Act, which include the following:
- Between four to seven years of income tax holiday
- A 5% special corporate income tax for 10 years (available for export enterprises)
- Value-added tax exemption
- Enhance deductions for the following to include:
- Depreciation allowance
- Labor expense
- Power expense
- Research and development
- Training expense, among others