Glossary Category: Philippine Ecosystem

Officially Republic Act No. 11337, the Innovative Startup Act was signed by President Rodrigo Duterte on April 26, 2019, took effect August 6, 2019, and had its Implementing Rules and Regulations signed on November 22, 2019. It defines a “startup” as any person or registered entity in the Philippines developing an innovative product, process, or business model, and creates the official Philippine Startup Development Program to support them.

The law provides real, concrete incentives: subsidies for business registration, expedited government processing, subsidized access to shared facilities, and grants-in-aid for research and development. It also directs the Department of Foreign Affairs to create three dedicated startup visa categories — for startup owners, employees, and investors — making it easier for foreign talent and capital to work with Philippine startups legally.

Three government agencies — DOST, DTI, and DICT — are named as lead implementing agencies, while PEZA is separately tasked with developing dedicated Startup Ecozones.

🇵🇭 Philippine Example

RA 11337 directs PEZA, in coordination with DTI, DOST, and DICT, to establish dedicated Philippine Startup Ecozones — a real, legally mandated extension of PEZA's existing special-economic-zone model built specifically for registered startups.

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The Philippine Economic Zone Authority is a government agency attached to the Department of Trade and Industry, tasked with registering and regulating “locator” companies operating inside designated special economic zones and IT parks — historically a major draw for the IT-BPO industry (call centers, software development, animation, and other IT-enabled services).

A PEZA-registered company can receive an Income Tax Holiday of four to seven years depending on project classification, followed by a 5% Special Corporate Income Tax on gross income in place of most national and local taxes, VAT zero-rating on local purchases, and duty-free importation of equipment. Foreign-owned BPOs must meet minimum paid-up capital thresholds ($100,000 with at least 50 Filipino employees, or $200,000 otherwise) and must physically operate inside a PEZA-accredited zone or building.

Under the Innovative Startup Act (RA 11337), PEZA has an additional, newer mandate: working with DTI, DOST, and DICT to establish dedicated Startup Ecozones specifically for registered startups.

🇵🇭 Philippine Example

PEZA's mandate under RA 11337 to create dedicated Startup Ecozones is a real, legally specified extension of its decades-old IT-park incentive model — applying the same tax-holiday-plus-5%-SCIT structure that built the Philippine BPO industry to registered startups specifically.

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