HOUSE ‘F 2 [PRESENT ATIVES

RECEIVED

; pore 17 AUG 2016
SEVENTEENTH CONGRESS ) — at
OF THE REPUBLIC OF THE PHILIPPINES ) TiN:

First Regular Section ) By: __

HOUSE OF REPRESENTATIVES RES'STRAT!

BILLS AVD INCEX
House Bill No. 305'7

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

Policy makers often think of small business as the employment engine of the economy
But when it comes to job-creating, power, it is not the size of the business that matters as much
as it is the age. New and young companies are the primary source of job creation. Not only
that, but these firms also contribute to economic dynamism by injecting competition into
markets and spurring innovation. Businesses with fewer than fifty employees are
undoubtedly important to overall economic strength. To be sure, long term growth requires

that startups thrive and survive.

According to the Philippine Digital Startup Roadmap, the country expects 500 startups
with a $200 million funding by year 2020. The industry is expected to be valued at $2 billion
by then. The DTI said that by 2020, the Philippine startup and innovation community aims to
create 8,500 high-skilled jobs for Filipinos.

s bill, known as the Innovative Start Up Act, seeks to improve the existing startup
ecosystem in order to encourage the establishment and long term growth of such businesses.
The bill creates the Innovation Council that will steer innovation and similarly provide
support to startups at every stage. Financial assistance and support shall be provided through
a competitive system of tax incentives and salary subsidies.

Similarly, a fund will be established to provide grants and to support the Innovation
Council's policies and programs. Further, the bill will provide for a startup visa program to
allow foreigners to work in Filipino startups and to participate in setting up startups here.

By ensuring that startups are supported at every point of the development timeline, we
can create a thriving Filipino start up ecosystem geared at high value products and services
providing employment and generating economic growth. We acknowledge that Sen. Paolo
Benigno “Bam” Aquino filed this proposed measured in the Senate.

Hence, the swift passage of this bill is urgently sought.

Representative, 2nd District of Tarlac


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SEVENTEENTH CONGRESS OF THE REPUBLIC)
OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES
5
tose win so, 3057

Introduced by Representative Vietor A. Yap

AN ACT
CREATING THE INNOVATION COUNCH. AND PROVIDING BENE!
PROGRAMS TO STRENGTH
STARTUP ECOSYSTEM.

TS AND
iN, PROMOTE, AND DEVELOP THE PHILIPPINE

Be is enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECT

TION 1, Short Ti

fe. - This Act shall be known as the “Innovative Startup Act

SECTION 2. Declaration of Poticy.-I1 is hereby declared the policy of the State to foster
inclusive growth through an innovative economy by streamlining government and non-government
initiatives, in both local and international spheres, to create new jobs and opportunities. improve

production, and advance innovation and trade in the country

To this end, the State shall provide incentives to encourage and remove constraints to the
establishment and operation of innovative new businesses. and businesses crucial to their growth
and expansion, and to strengthen, promote, and develop an ecosystem of businesses and
government and non-government institutions that foster an innovative entrepreneurial culture in the

Philippines.

SECTION 3. Definition of Terms. As used jn this Aci. the following lerms shall mean

(a) Business operation — period that shall commence from the date the Authority to Print
Invoices/Receipts from BIR has been claimed by the owners of the enterprise oF their
representative, and shall terminate upon the closure of the enterprise:

(b) Core business function ~ the primary undertaking of the enterprise as its main source of
revenue which in the case of the corporation shall be indicated in its articles of

incorporation:


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(e)

End user the consumer of the product ot service offered by the enterprise whether for

free or for a fee:

(d) Innovative Start-up a registered enterprise operating for no longer than sixty (60)

(e)

0)

(a)

(h)

0)

months whose core business funetion involves product. process. or business model

innovation: Provided, That:

i, the innovative product, process. or business model is the primary source of revenue
of the enterprises

ii, the enterprise is not a mere end user of the innovative product, process, or business
model:

iii, the cost of the enterprise for research and development is at least fifteen percent
(15%) of its total operational cost, or is a licensee or owner of @ patent or
registered software:

iv, the enterprise is not an affiliate, a subsidiary. or franchisee of a an enterprise whose
gross annual revenue exceeds fifty million pesos (PHP 50.000,000).

hol ex

y, the gross annual revenue of the enterprise has

50,000,000)

ceded fifly million pesos (PHP

Innovative Product ~ a good or service that is new or significantly improved, such as
improvements in technical specifications. component materials. software in the product,
user friendliness or other functional characteristics:

Innovative Process — a new or significantly improved production or delivery method
through changes in techniques, equipment and/or software:

Innovative Business Model a new organizational method in. business practices.
workplace organization or external relations

Research and Development Cost -the expenditure of the enterprise as a fraction of its

total operational cost that shall include the salary of the employees engaged in research

and development. pur

hase or lease of equipment, software, substances or materials, ancl

such other items

d goods and services that may be justified for the purposes of the

development of the innovative good, service. process. or business model of the

enterprise

Support Service Providers -any ente

rprise that provides goods or services that ar

identified to be crucial in supporting the operation and growth of innovative start-ups. of
enterprises whose core business function, which in the case of corporations are indicated
in their articles of incorporation, involves the targeted or exclusive provision of goods

and services to innovative start-ups.


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CHAPTER 1

CERTIFICATION

Application and Assessment

SECTION 4, Certificate Application, ~ The Department of Trade and Industry (DTI) shall
be tasked to create and process the application for the certificates created under this measure while
ensuring that
(a) current or prospective owner(s) of an enterprise shall be deemed eligible to apply, and
may commence with the application process for any of the certificates created under this
measuire upon the presentation of the Certificate of Business Name Registration:
(b) The result of the application shall be released within ovo (2) working days upon the

submission of complete requirements which must include an accomplished form with

information on the nature of the operation and core business function of the current or

prospective enterprise of the applicant:

(c) In case an application shall be rejected, the applicant shall be given a notice that
indicates and explains the grounds for rejection, and the right to contest the result within
ten (10) working days from the release of the result;

(d) In case an application shall be approved, the applicant shall be issued a probationary

certificate.

SECTION §, Assessment Process. DTI shall be tasked to subject bearer’s of a

probationary certificate to an assessment process to ascertain the nature of the operation and core
business function and such other information declared in the application ensuring that
(a) There shall be a minimum number of months of operation, currently set at three (3)
months. that must be fulfilled before a bearer of a probationary certificate can undergo
an assessment:

(b) DTI may adjust the requisite months of operation to be eligible for assessment discussed

in subsection (a) of this provision:
(c) Requests for assessment shall be accommodated regardless of the eligibility of the
enterprise to be assessed: Provided, That the assessment must be scheduled at a cate
when the enterprise will reach the required minimum number of months of operation

governed by subsections (a) and (b) of this provision!

(d) The result of the assessment must be released within two (2) working days from the date
of assessment:
(e) In case the bearer of a probationary certificate fails the assessment, the bearer shall be a

s the grounds for the result, and the right 10

given a notice that indicates and explai

contest the result within ten (10) working days from the release of the result: and


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(0) In case the bearer of a probationary certificate passes the assessment. the bearer shall be

issued the appropriate certificate created under this measure.

Certificates

SECTION 6, Innovative Startup Certificate, ITI shall create certificates for innovate
start-ups and providers of support service envisioned under this measure that shall have fields for
information such as but not limited to the following

(a) Type of Certificate:

(b) Certificate Number,

(c) Name of the Owner/s;

(d) Business Name and address;

(c) Date and place of issuance of certificate:

(1) Commencement of operation:

(g) Date of assessment:

(h) Assessment result/s:

(i) Certificate Expiration

(j) Office. name. position, and signature of the authorized signatory from DTI:

In the case of probationary certificates. all fields must be duly furnished with the necess

information except (f) if the certificate bearer has not yet acquired the Authority to Print

Invoice/Receipts Irom the BIR, and except (g) whieh shall only be furnished by pertinent authority

in DTI once the certificate bearer has passed assessment.

DTI shall ensure that the contents of the certificates are true and consistent with the

information provided by the owner(s) of the reyistered enterprise in all stages of the application fo

any of the certificates

SEC

MON 7. Type 1 Innovative Start-up Certificate. — DT) shall issue this certificate to

for no longer than sixty (60) months and whose core business

registered enterprises. operatin:
function involves product. process. or business model innovation: Provided, That
(a) the innovative product. process. or business model is the primary source of revenue of
the enterprise;
(b) the enterprise is not a mere end user of the innovative product, process, or business
model:
(©) the cost of the enterprise for research and development is at least fifteen percent (15%)

of its total operational cost, or is a licensee or owner of a patent or registered software:


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(d) the enterprise is not an affiliate, a subsidiaty, or franchisee of an enterprise whose gross
annual revenue exceeds fifty million pesos (PHP $0,000,000);
(e) The gross annual revenue of the enterprise has not exceeded fifty million pesos (PHP.

50,000.000).

ECTION 8.

rype 2 Innovative Start-up Certificate. —IYT\ shall issue this certificate to
registered enterprises whose core business function involves products. process. or business model
innovation and that either
(a) qualify as a Type 1 Innovative Start-up but has operated for more than sixty (60)
months: and/or
(b) qualify as.a Type | Innovative Start-up except for subsection (d) in Section 7; and/or

(c) qualify as.a Type | Innovative Start-up except for subsection (¢) in Section 7

SECTION 9.1ype 3 Support Service Certificate. (TI shall issue this certificate to
support service providers that is not an affiliate. a subsidiary. or franchisee of an enterprise whose
gross annual revenue exceeds filly million pesos (PHP 50,000,000), and the gross annual revenue
of the support service provider has not exceeded filly million pesos (PHP 50,000,000). such as but
not limited to

(a) Co-working space operators:

(b) Incubators:

(c) Accelerators

(d) Fabrication laboratories:

(c) Design centers,

Expiration, Revocation, and Mandatory Assessment

SECTION 10. Expiration of the Certificate. — The following certificates may be renewed

but shall expire after twenty-four (24) months from its i

suance:
(a) Type 1 Innovative Start-up Certificate
(b) Type 2 Innovative Start-up Certificate: and

(c) Type 3 Support Service Certificate

Type 1 Innovative Start-up Certificates shall ultimately expire after sixty (60) months of
operation and may no longer be renewed as a Type | innovative Start-up Certificate. but may still

be renewed as a Type 2 Innovative Start-up Certificate:

In case the whimate date of expiration of the Type | Innovative Start-up Certificate is less

than thirty-six (36) months from issuance ofa renewed certif

ate, the date of expiration shall be set


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at the date of the ultimate expiration, at the cnd of the sistieth (60") month of expiration of the

enterprise,

Probationary Certificates shall expire after six (6) months from its issuance if it remains

subject to assessment, or has failed to pass assessment prior to its expiration

Bearers of expired certificates shall be reserved the right to reapply for any of the

certificates created under this measure. but shall not be entitled to any benefit or privilege reserved

for beares

s of unexpired certificates,

SECTION 11, Mandatory Re-assessment. — Enterprises with a duly assessed certificate
shall be subject to mandatory reassessment by DTI one (1) month prior to the expiration of their
certificate. Enterprises that would pass the reassessment shall have its certificate renewed, effective
for another twenty-four (24) months beginning on the expiration of their certificate

Prior to the date for mandatory reassessment, bearers of the certificate shall reserve the right

to apply or request for an earlier reassessment, and have their certificate renewed for another
twenty-four (24) months beginning from the issuance of the result; Provided. That they pass the

reassessment,

SECTION 12, Revocation, NT] shall reserve the right to set the standards for revocation

of any of the certificates created under this measure and revoke the certificates of bearers who no

longer meet the standards set to quality for

ch type of certificate prior to its expiration

DTI shall first issue a notice detailing the grounds for the revocation of the certificate. It

shall then provide the enterprise at least twenty (20) working days in order to contest of clarify

DTI shall only proceed with revocation if the notice remains uncontested, or the grounds

have been confirmed despite contestation

DTI shall also be required to immediately post on its website, and on the website created
under this measure, information on the revocation of certificates such as but not limited to the
following:

(a) Rules and regulations related to revocation:

(b) Cases of revocation and its resolution of result

CHAPTER 2

BENEFITS AND INCENTIVES



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istration Benefits

SECTION 13. Registration Benefits. ~ Bearers of the certificates created under this
measure, including those with probationary status shall be entitled to the following benefits:
(a) Waived fees in the application and processing of permits and certificates required for the
business registration of the enterprise with appropriate registering agency
(b) Refund equivalent to the sum of fees and taxes levied by the local government unit for
the permit to operate and its prerequisites, to be claimed from DTI:
(c) Expedited processing of permits and certificates that are requisites to business

registration and operation.

In case bearers of a probationary certificate fail to pass the assessment prior to the
expiration of its probationary certificate, they shall be required to pay DTI an amount equivalent to
fees waived by State departments and agencies in the processing of permits and certificates

required for the business registration of their

nterprise.

DTI shall only provide the refund equivalent to the fees levied by local government units for

the permit to operate and its prerequisites once the bearer of a probationary certificate has

successfully passed the assessment.

DTI shail identify government institutions that issue permits and certificates pertinent to this
provision, and shall require these institutions to create mechanisms for expedited processing
resulting t© a timeline from application to approval that is shorter than for those applying for the

same permit, certificate, or document without any of the certificates created under this measure.
All instrumentalities of the government that issue permits and certification that are required
for the operation of any business shall he tasked to place materials in conspicuous areas advertising

the entitlement to these benefits in its field offices

Tax Benefits

SE

TION 14. Tax

emption. Bearers of a duly assessed Type | Innovative Start-up
Certificate shal] be exempt from the following taxes arising from the operation of the enterprise for
the period covered by the validity of the certificate. which may be extended subject to
reassessment, and may last until the first sixty (60) months of its operation:

(a) Income tax arising from the operation of the enterprise:

(b) Value added Tax (VAT) for the sale and lease of goods. properties or services arising in

the course of trade or business of the enterprise or percentage tax:


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(c) Credituble withholding tax on income: and

(d) Expanded withholding tax on its income payment:

SECTION 15. Tax Deduction. Bearers of duly assessed Type 3 Support Service
Centificate shall be entitled to special deduction trom taxable income equivalent to foregone income
arising from partial or discounted rates for services given to bearers of Type 1 Innovative Start-up
Centificate: Provided. That
{a) Bearers of the Type 3 Support Service Certificate shall be required to disclose staple
rates in their application including discounted rates that shall be provided to bearers of
Type 1 Innovative Start-up Certificate as a basis for the assessment of tax deduction,
(b) Bearers of Type 3 Support Service Certificate must be able to provide supporting
documents such as copies of the Type | Innovative Start-up Certificate of enterprises
receiving discounted rates: and

(c) Deductions shall only account for goods and services rendered by the bearer ofa Type 3

Support Service Certificate during the validity of its certificate and that of the Type |

Innovative Start-up Certificate of the recipient of such goods and services.
Intellectual Property
SECTION 16, [PO Subsidy. Bearers of duly assessed Type 1 Innovative Start-up
Certificate shall be exempt from fees and charges levied by the Intellectual Property Office of the
Philippines for its services
Salary Subsidies

SRC

ION 17.Salary Subsidies. DTI, in coordination with DOST and DICT shall provide

salary subsidies to duly assessed Type | Innovative Start-up Certificate bearers under a competitive

basis

DTI. DOS

T and DICT shall be mandated to create the regulations for the application and

awarding of this

subsidy ensuring.

(a) That the subsidy shall only be granted for the purposes of hiring a competent employee
or consultant that shall aid in improving the technology readiness of the innovative good
or service, and the improvement of the innovative process or business model of the
applying enterprise:

(b) That the subsidy shall prioritize applicants whose innovative good. service, process, ot

business model compliments or supports the achievement of the mandate of the

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respective awarding agencies, of other State departments

cncivs overseeing priority
programs of the State:

(c) That the coverage of the s

ibsidy for each recipient employee or consultant for an
enterprise shall not exceed twelve (12) months;

(a) That the awarding agencies shall put limits such as, but not limited to. number of
recipients per enterprise at any given time, number of times an enterprise may be

awarded a subsidy, allowable rate of salary subsidy, maximum allowable salary subsidy

(c) That the enterprise awarded with salary subsidy must be able to provide the awarding
agency with timely information on the progress of projects or programs where the
recipient employee or consultant is involved, and other related accomplishment reports:

(1) That the awarding agency shall reserve the right to terminate provision of the subsidy.
provided that such grounds for revocation used to terminate the subsidy have been

disclosed. or included in ensuing written agreements with the recipient enterprise

(g) That the awarding ageney shall post such agreements involving salary subsidies in its

website, providing information such as but not limited to, recipient enterprise, terms of
the subsidy, and purpose of the subsidy, partial or full accomplishments of recipient
employees or consultants for the enterprise

Support Service Subsidy

SECTION 18. Support Service Subsidy. TL, DOST, and DICT shall provide a support

service subsidy under a competitive basis to duly assessed Type | Innovative Start-up Certificate

bearers,

DTI. DOST and DICT shall be mandated to create the regulations for the application and
awarding of this subsidy ensuring:

(a) That the subsidy shall prioritize applicants whose innovative good, service, process. ot
business model compliments or supports the achievement of the mandate of the
respective awarding agencies. or other State departments or agencies overseeing priority
programs of the State:

(b) That the coverage of the subsidy for each recipient enterprise shall not exceed twelve
(12) months:

(c) That the awarding agencies shall put limits such as. but not limited to. number of
support service subsidies per enterprise, allowable subsidy rate, maximum allowable
amount for support service subsidy:

(d) That the awarding agency shall reserve the right to terminate provision of the subsidy,
provided that such grounds for revocation used to terminate the subsidy have been

disclosed. or included in ensuing written agreements with the recipient enterprise:

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(e) That the awarding agency shall post such agreements involving Support service subsidy
in its website, providing information such as but not limited to, recipient enterprise.

ubsidy:

terms of the support service subsidy, and purpose of the

Market Validation Study Subsidy

SECTION 19. Market Validation Study Subs

idy. DTI shall provide a subsidy for market
validation studies under a competitive basis to duly assessed Type 1 Innovative Start-up Certificate

bearers,

DTI shall be mandated to create the regulations for the application and awarding of this
subsidy ensuring
(a) That the subsidy shall only be granted for the purposes of funding market validation

studies which may he outsourced to competent academic institution

. and providers of
consultaney service:

(b) That the subsidy shall prioritize applicants whose innovative good, service. process, or
business model compliments or supports the achievement of the mandate of the
respective awarding agencies, or other State departments or agencies overseeing priority

programs of the State:

(c) That the awarding agencies shall put limits such as. but not limited to, number of
subsidies per enterprise. number of times an enterprise may be awarded this subsidy,
allowable rate of subsidy, maximum allowable market validation study subsidy;

(d) That the enterprise awarded with market validation study subsidy must be able to
provide the awarding agency with timely information on the impact and use of the

subsidy in the growth of the enterprise. and such other steps taken to utilize the

information gathered from the study. and other related accomplishment reports:

{c) That the awarding agency shall reserve the right to terminate provision of the subsidy.
provided that such grounds for revocation used to termiinate the subsidy have been
disclosed. or included in ensuing written agreements with the recipient enterprise:

(1) That the awarding agency shall post such agreements involving market validation study

subsidies in its website, providing information such as but not limited to, recipient

enterprise. terms of the subsidy. and purpose of the subsidy. partial or full

accomplishments of recipient employees or consultants for the enterprise.

Venture Fund

SECTION 20. Innovative Start-up Venture Fund. - There is hereby created a one billion

peso (PHP 1,000.000,000) Innovative Start-up Venture Fund. 10 be administered by DOST. to

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cover for initial or supplemental investment requirements of beaters of the certificates created

under this measure.

DOST shall ensure that grants made under this fund shall be in line with national priorities.

or the mandate of State departments or agencies who may endorse applicants whose innovation

may aid them in fulfilling or complimenting their functions through their programs,

CHAPTER 3
STARTUP VISA‘

SCTION 21. Innovative Start-up Visas. ‘The Bureau of Immigration shal] be tasked to
promulgate the necessary rules and regulations in the provision of the following visas
(a) General Start-up Visa » This visa shall entitle its bearer to at least four (4) months and at
most twelve (12) months stay in the Philippines, depending on the need justified,
requiring only the following in addition to standard visa requirements:
i, Existing or prospective business plan for an Innovative Start-up or provider of
identified support services: and

ii, Official endorsement or invitation from any of the following registered enterprises in

the Philippines justifying the purpose of the travel and its duration
1. Duly assessed Innovative Start-up or Support Service Certificate bearers; ot

2. Innovation Council - Department of Trade and Industry

(b) Start-up Founder Visa — This. visa shall entitle its bearer, who owns a registered

enterpri

in the Philippines, stay in the Philippines until three (3) months after the non-

renewal or the revocation of its Innovative St

up or Support Service Certificate:
requiring only the following in addition to standard visa requirements:
i. Business Permit of the applicant's registered enterprise in the Philippines: and

ii, Duly ass

essed Innovative Start-up or Support Service Certificate of the enterprise

(c) Start-up Employment Visa — This visa shall entitle its bearer exemption from the Alien

Employment Permit, and stay in the Philippines until three (3) months from the
expiration of the applicant’s employment contract with bearers of duly assessed
Innovative Start-up or Support Service Certificate. requiring only the following in
addition to standard visa requirements

i, Applicant’s employment contract endorsed by the hiring enterprise

ii, Duly assessed Innovative Start-up or Support Service Certificate of the hirin

enterprise: and

iii, Business Permit of the hiring enterprise.


1 Provided, That the endorsing employer shall inform Bureas of Immigration within

2 five (5) working days from the termination of the contract used to justify the visa, and

3 provide the whereabouts of the visa bearer that it endorsed

4 (dl) Start-up Investor Visa — This visa shall entitle its bearer to a multiple entry visa for

5 complying with at least (vo million pesos (PHP 2,000,000) worth of total investment into

6 any bearer of duly assessed Innovative Start-up or Support Service Certificate within twelve

7 months from the issuance of the visa, requiring only the following in addition to standard

8 visa requirements:

9 i. Certification under oath of duly-authorized officers of any accredited depository bank
10 in the Philippines as to the amount of foreign exchange inwardly remitted by the alien
NW applicant, and its conversion to pesos through the said bank: Provided, That for
12 inward remittances sent through non-accredited correspondent banks, the total amount
13 of remitted money should be immediately transferred to the accredited banks:

14 ii, Certified true copy of peso time deposit with a maturity period of at least thirty (30)
15 days. amounting to at least two million pesos (PHP 2.000.000)

16 iii, If spouse and dependent children are included in the application, a marriage contract
17 duly authenticated by the Philippine Consulate or Embassy in the applicant's country,
18 or the embassy of the country of the applicant in the Philippines;

19 Provided. that the Innovation Council in coordination with the Board of Investments
20 shall reserve the right to create rules and regulations on the investment requirement for the
21 maintenance of this visa, The Board of Investment shall also require for the periodic
2 reporting of the investments to be determined in the implementing rules and regulations of
23 this measure

24 SECTION 22. Visa Expiration, ~ ‘The visas created under this measure shall have the

25. following terms of expiration

26 (a) General Start-up Visa shall last for at least four (4) months at most Ovelve (12) months.
27 depending on the need justified. and shall expire on the date granted by the authorized
28 immigration officer,

29 (b) Start-up Founder Visa shall expire three (3) months after the expiration or the revocation
30 of the certificate of the enterprise used to justify the visa. or one (1) month after the
31 bearer of the visa has transferred ownership of the enterprise:

32 (c) Start-up Employment Visa shall expire three (3) months from the termination of the

employment contract used to justify the visa, or (1) month after the employer failed to

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comply with the requirement to furnish Bureau of Immigration with a signed copy of the

employment contract used to justily the visa:


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(d) Start-up Investor Visa shall expire two (1) nionths after the bearer failed to comply with
the investment requirements for this visa, or (1) month after it has failed to report its

investments, Dependent Visas issued shall a

0 expire upon the expiration of the Start-

up Investor Visa used to jus

ify its

issuance

Provided. That an alien whose visa either expired, or is pending expiration may still apply

or re-apply for visas created under this mi

ure

SECTION 23. Revocation of Start-up Visas. ~ The visas created under this measure may
be revoked subject to any of the following conditions
(a) If the bearer of the visa has been found to have falsified or misrepresented information
in the application,

(b) If the bearer of the visa has been found guilty of a crime of moral turpitude:

Provided, That visas created under this measure shall require applicants to provide the

inent authority access to criminal records that may be provided by the government in the

applicant's home country. or its embassy here in the Philippines

Provided further. That documentary requirements such as security clearance shall only be
required from an applicant prior to visa approval in cases when there is evidence or Information
against the applicant. such as but not limited to, International Police Advisory that may be acted

upon by pertinent authorities at the moment of application or its processing, Otherwise, failing

security clearance shall only be grounds for revocation of visas created under this measure.

Provided finally, That the revocation of visa shall also result to the immediate order for
deportation of bearers of visas in question. and barring of re-application until charges have been

cleared

SECTION 24, Startup Immigration Assessment. Bureau of Immixration. in coordination

with the Innovation Council shall publish an annual report posted in their website and in the official

government portal created under this measure. statistical information related to the start-up visas
such as but not limited to

(a) Number of aliens granted with each type of visa per country. updated monthly

(b) Rate of re-application for each type of visa, updated monthly:

(c) Rejection Rate (out of total monthly applications):


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SECTION 25. Visa Fees. - The corresponding fees for each visa shall be consulted by the
Bureau of Immigration with the Innovation Council, where it shall be deliberated to ensure that the

price shall not serve as a barrier to its intended recipients

CHAPTER 4
STARTUP PROMOTION AND DEVELOPMENT

Innovation Council

SECTION 26. Innovation Council. — ‘There is hereby created an Innovation Council,
hereinafter referred to as the Council, which shall be attached to the Department of Trade and

Industry

SECTION 27. Mandate. The Council shall promote and develop an environment that
fosters innovation in the Philippines by coordinating, initiating. and supporting government and

non-government programs. projects. and activities towards this end.

The Council shall push for the implementation of this Act. and the creation of
comprehensive development plans for sectors pivotal to the growth of the economy through

innovation

SECTION 28. Composition. - The Council shall be composed of the following
(a) Department of Trade and Industry (DTH:

(b) Department of Science and Technology (DOST):

(c) Department of Information Communication Technology (DICT)

(d) National Eeonomic Development Authority (NEDA):

(c) Department of Budget and Management (DBM):

() Department of Education (DepEd):

(2) Commission on Higher Education (CHED);

(h) Technical Education and Skills Development Authority (TESDA):

(i) Top two (2) departments or agencies without permanent membership in the Council. and
with the highest budget for programs related to innovation, research, and development

{j) One (1) representative from a policy or research institution: and

(k) Five (5) representatives from the private sector, each

representing a sector in the local

start-up industry.


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The Secretary of Trade and Industry and one (1) representative from the private sector, to be
appointed by the President, shall be the Co-Chairpersons of the Council, The remaining four (4)

private sector representatives shall likewise be appointed by the President

The top two (2) departments or agencies with the highest innovation research and

development funding shall be identified by the DBM upon the promulgation of the General
Appropriations Act. DBM shall take into consideration both new appropriations and carried over

appropriations for on-going programs

The Council shall meet once every two (2) months or whenever the Chairperson or Co-

Chairperson shall convene the same

SECTION 29. Powers and Fi

actions, ‘The Council shall exercise the following powers
and functions in order to carry out its mandate

(a) Act as the primary body that will strateg

Ze and execute steps to improve the country’s

ranking in the Global Innovation Index, and when necessary, also in other indices and

measures that they may deem appropriate in measuring the growth and development of

innovation in the country, or among countries;

() Advise the President on policy matters affecting the developmen of innovation in the
country, and recommend to Congress any proposed legislation that would forward
innovation in the country

{¢) Coordinate, monitor. and assess the implementation of this measure. and such other
policies related to the fulfilment of its mandate, and when necessary, recommend
appropriate adjustments thereon in light of changing conditions in both domestic and
international environment;

(d) Direct specific departments and agencies to attend to the bottlenecks and problems
constraining stakeholders in the local start-up community and contributors to our
innovation economy;

(c) Collate and deliver progress report(s) on the programs and activities to forward the
objectives of this measure, and address the bottlenecks identified by the government and
stakeholders in the local start-up community

(9 Coordinate with Local Government Units (LGUs) through respective leagues for the
formulation of standards and policies to be observed by LGUs in order to ensure that

plans and budgets of LGUs are supportive of the thrusts of this measure, and ensure

optimal allocation of expenditure:

(g) Coordinate with concer

wed agencies for the generation of resources, both governmental

and non-governmental, local, national and international, as may be appropriate, in and



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for the development, marketing, growth and competitiveness of innovation inthe
Philippines;

(h) Promote and coordinate initiatives and programs, with government and non-government
institutions, for the complimentary use of innovation in improving processes in the
production and preservation of traditional crafts while balancing the interest of cultural
preservation:

(i) Support and develop initiatives to improve the appreciation and cultivation of
innovation and entrepreneurship in academic institutions

(i) Perform such other powers and functions as may be necessary or as may be assigned by

the President

SECTION 30. Secretariat. - The Council shall organize a Secretariat which shall report

directly to it, to be headed by an Executive Director, with the support of

private sector staff

headed by an Operations Director.

SECTION 31. Coordination. — The Council shall regularly coordinate with local and

international advocates of innovation, stakeholders in the start-up community. and representatives

of institutions interested to support and collaborate to. pursue programs or activities pivotal or

complimentary to the fulfilment of the mandate of the Council

They may be invited as resource persons during meetings. or be invited in presentations or

discussions spearhead by or done in coordination with the Council.

SECTION 32.

unding. ~ The activities and operational expenses of the Council shall be
funded by budgetary appropriations from the government and from private sector contributions, To

carry out the provisions on the establishment of the Council in this measure. an initial allocation of

twent

five million pesos (PHP 25,000,000) for the necessary operating expenses of the Council
shall come from the funds of the Department of Trade and Industry, Subsequent funding for the
Couneil may be incorporated in the budget proposal of the DTT, subject to existing accounting and

auditing laws, and procedures

The private sector shall fund its own participation in the work of the Council. The

are

encouraged to secure their own funding through grants and other contributions from foreign and

local private sector counterparts, subject to applicable laws. rules and regulations

Donations for the operation of the Council shall be received. accounted for. and disbursed in

accordance with the pertinent laws, accounting and auditing

ules and regulations


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Innovative Start-up Website

CTION 33. Innovative Start-up Website. — The Council shall develop and maintain a

single portal that shall serve as the primary source of information on statistics. events. programs,

and benefits provided

relation to the mandate of the Council, and the implementation of this
measure,

SECTION 34. Functions of Website. - The single portal created under this measure must
have features such as but not limited to following:

(a) Online database of bearers of certificates created under this measure, which may include
basic information on the enterprise stich as business address and contact number:

(b) Online inquiry. registration. application, and release of results for certificates and lor
visa requirements:

(c) Advertising space which shall be a source of funds for the maintenance and
development of the website, which may also be provided for fee or at a subsidized rate
for the promotion of events and key stakeholders of the local start-up community;

(d) Statistical information and annual reports pertinent to the implementation of this,
measure. and such other informative content beneficial in line with the mandate and
goals of the Council.

Educational Programs
SECTION 35. Advancement of Education Programs, ~ DepEd. CHED. and TESDA shall

be tasked to pursue the creation and updating of programs that shall foster an environment

conducive to innovation. and provide incentives to academic in

‘tutions to provide funds and/or

grants for the research of its students and its faculty

SECTION 36. Innovation in Academic Institutions, - The Council, in coordination with

government and non-government institutions. shall endeavour the creation of facilities and

programs such as but not limited to incubation. design. and research facilities for both students and

educators within academic institutions.

Intellectual Property

SE

ION 37. Intellectual Property Office. The Intellectual Property Office of the

Philippines, in coordination with DTI, shall undertake capacity building programs for the Business

Counsellors of the Negosyo Center to equip them to address inquiries. and process services related

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to the acquisition of copyrights, trademark, patents, and such other services that may be provided

by the IPO.

‘Technology Readiness Assessment

SECTION 38. Technology Readiness Level Assessment, — DICT and DOST shall create
the standards and measures for the assessment of technology readiness level of innovative start-ups,
and shall provide programs that will expedite the ascent of innovators and innovative enterprises in

higher levels of technology readiness. and prevent the stagnation in lower levels

Market Readiness Assessment

SECTION 39. Market Readiness Assessment. DTI in coordination with academic
institutions shall develop and create measures for the assessment of the market readiness of
innovative business, not limited for the purposes of assessing recipients and applicants of benefits

and privileges created under this measure

CHAPTER 5

Special Provisions

SE

“TION 40.

commerce. - Reyistered enterprises engaged in E-commerce shall not be
construed as mass media, and shall not be subject to coresponding limitations in Article XVI

Section 11 of the 1987 Philippine Constitution,

SECTION 41, Co-working Permit. All enterprises operating in certified co-working

space shall be exempt from these permits: Provided, that the operator of their co-working space has

already complied with the permits:
(a) Fire permit;
(b) Sanitation permit:

(c) Building permit

Others

SECTION 42. Numeric Adjustments. Numeric parameters used in this measure shall be

subject 9 the adjustment of an agency or agencies involved with the implementation of the
provision(s) of this measure to adjust to inflation and other economic parameters in light of

changing local and international circumstances


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SECTION 43. Implementing Rules and Regulations. — D1 in courdination with the
pertinent government agencies shall promulgate the necessary rules and regulations within sixty

(60) days from the effectivity of this Act

SECTION 44. Separability Clause. - If any section or part of this Act is held

unconstitutional, no other section or provision shall be affected.

SECTION 45. Repealing Clause. - All provisions of existing laws, presidential decrees or
issuances, executive orders, letters of instruction, administrative orders, rules and regulations
contrary to or inconsistent with the provisions of this Act are hereby repeated, amended, or

modified accordingly

SECTION 46,

iffectivity, ~ This Act shall take effect fifteen (60) days after its complete

publication in the Official Gazette and in at least two (2) newspapers of general circulation

Approved.