CREATE MORE Act and its impact on emerging tech

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On November 11, 2024, Philippine President Ferdinand ‘Bongbong’ Marcos Jr. signed the CREATE MORE Act into law, marking a major step toward revitalizing the nation’s economy. Building on the previous CREATE Act, this new law further makes the Philippines an attractive place for investment.

The CREATE MORE Act focuses on reducing corporate taxes, simplifying business processes, and providing incentives specifically designed to attract high-value investments. For the Philippines, this law not only boosts the economy but also aims to position the country as a regional leader in blockchain, artificial intelligence (AI), and other emerging tech fields.

#HappeningNow Signing of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act pic.twitter.com/9XUGfVjSzs

— Win Gatchalian (@WinGatchalian74) November 11, 2024

Donald Lim, chairman of the Blockchain Council of the Philippines, expressed optimism about the CREATE MORE Act’s potential impact on tech. He noted, “The CREATE MORE Act represents a powerful policy shift that could establish the Philippines as a competitive landscape for blockchain and emerging tech, attracting the necessary resources, talent, and innovation to fuel long-term growth. This could have a significant impact on blockchain startups and the broader emerging tech sector in the Philippines, given the enhanced tax incentives, encouraging more foreign investors to come in, and also support R&D by companies to allow innovative solutions like blockchain. I look forward to how the law will be put into motion, and I am excited for the possibilities this law will bring.”

The CREATE MORE Act is designed to make the Philippines a more attractive destination for global tech investments. By lowering corporate income taxes from 25% to 20% for registered businesses, doubling deductions for power expenses, and simplifying tax processes, the Act addresses some of the biggest financial and operational challenges tech companies face. These incentives are particularly valuable for blockchain and tech startups, which often have high startup costs.

The Act also makes it easier for tech startups to get off the ground in the Philippines. One major change is the emphasis on supporting research and development (R&D). The law offers extended incentives and tax deductions for companies that invest in R&D. This is expected to encourage local entrepreneurs and foreign investors to test new ideas and develop cutting-edge technologies in the country. Additionally, the Act allows businesses to arrange up to half of their workforce in remote work settings without losing tax benefits, a feature that aligns with the needs of many tech companies today.

For the Philippines, this Act is an opportunity to become more competitive in the global tech market. The CREATE MORE Act aims to make the country an appealing option for tech companies looking to expand in Southeast Asia by simplifying the investment process and offering clear, long-term benefits. The Philippine Economic Zone Authority (PEZA) has stated that this law not only brings the Philippines in line with ASEAN competitors but also gives it an edge by offering some of the most generous tax benefits in the region. According to PEZA, the Act helps to position the Philippines as a strong option for export-driven tech companies that might otherwise look to neighboring countries.

The blockchain sector, in particular, benefits from the CREATE MORE Act. Blockchain companies in the Philippines have faced some challenges, including regulatory uncertainty and a smaller local talent pool. However, the CREATE MORE Act seeks to address these issues by offering clear incentives and a stable environment for tech companies. Lim noted that the Act “encourages more foreign investors to come in” and supports R&D for “innovative solutions like blockchain.” By attracting local and foreign investments, the Philippines could emerge as a leader in blockchain technology in Southeast Asia.

Commenting on the Act’s impact on Web3 startups, David Almirol, the undersecretary for e-government at the Department of Information and Communications Technology (DICT), said: “The CREATE MORE Act helps Web3 startups by reducing taxes and offering incentives, allowing more resources for growth and innovation. It attracts investments and supports partnerships, strengthening the Web3 ecosystem and aligning with our goal for a digitally-driven Philippines.”

The CREATE MORE Act’s benefits could also have a long-term economic impact, leading to more partnerships and collaborations within the tech sector. As foreign direct investment (FDI) grows, tech companies will likely form partnerships with local businesses, universities, and government agencies, opening doors for collaborative tech hubs, incubators, and innovation centers. Such developments would help build a self-sustaining tech ecosystem that can continue to thrive even beyond the initial incentives offered by the Act.

An essential part of this tech-driven growth will be the creation of new job opportunities and the development of local skills. As more tech and blockchain companies set up operations in the Philippines, the demand for skilled professionals will grow, leading to job creation across the sector. By supporting partnerships with educational institutions, the CREATE MORE Act helps tech companies contribute to building a skilled workforce that can meet the demands of emerging technologies.

Compared to other countries in the ASEAN region, the Philippines has taken an ambitious step with the CREATE MORE Act. While other Southeast Asian nations also offer tax incentives, the CREATE MORE Act combines these benefits with measures that streamline business processes and simplify regulatory requirements. This makes the Philippines an appealing destination for tech companies seeking financial incentives and an accessible business environment.

The CREATE MORE Act stands as a major boost for the tech landscape in the Philippines. As Lim said, “The CREATE MORE Act represents a powerful policy shift that could establish the Philippines as a competitive landscape for blockchain and emerging tech.” With the right implementation, this law could transform the Philippines into a tech-driven economy that attracts investments, drives innovation, and fuels long-term growth. As the Philippines continues to develop its tech ecosystem, the CREATE MORE Act could be the cornerstone that propels the country into a leading position in Southeast Asia’s emerging tech markets.

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