House Bill to Provide Incentives and Grants to OFW-Owned Businesses
Makati City 2nd District Representative Luis N. Campos Jr. filed House Bill 1440 (HB 1440) which seeks to provide incentives for Overseas Filipino Workers (OFWs) or Filipinos residing overseas with existing businesses in the Philippines.
If passed, HB 1440 will become the Overseas Filipino Workers Business Incentive Act of 2019 — a law advocating for overseas Filipino business investors and encouraging them to aid in the creation of employment, local production, and trade within the country.
In the efforts to foster Filipino-led contributions and nation-building to the economy, the bill offers fiscal incentives, access to capital, training, marketing assistance and information, ease of doing business, and institutional support to all OFWs and OFW-owned businesses. The bill also includes an exemption from all national and local taxes for the first two years of business operations.
“The exemption shall be extended to six years if the OFW business is a pioneering business in the Philippines or if it will introduce and utilize state-of-the-art technology in its operations,” the bill added.
In addition, the bill also carries immunity from tariffs and charges on imported equipment used solely for business services worth less than P5 million for the first two years of operation. This exemption has a validity of two years, and the declared equipment may not be resold for at least five years after.
HB 1440 mandates the Overseas Workers Welfare Administration (OWWA) to set aside a portion of their budget to secure funding for a credit facility for start-up OFW companies. The Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP) will be the financial institutions licensed to manage the credit facility.
According to the bill, the OFW Business Council will be formed and will compose of secretaries from the Department of Labor and Employment (DOLE), Department of Trade and Industry (DTI), National Economic Development Authority (NEDA), Department of Finance (DOF), Department of Interior and Local Government (DILG), along with independent OFW representatives for the construction of the rules for accrediting framework for OFW investors.
Other local government units are required to establish “express lanes” in government offices for OFW businesses acquiring business permits and licenses. Rep. Campos stated remittances is a potential resources for the rise of local entrepreneurial activity.
In his explanatory note, Rep. Campos wrote that there is “an urgent need to start harnessing the [OFWs’] remittances and savings into more productive endeavors, primarily through entrepreneurial or business activities.”
“Business activities will augment the income of the OFW households and will generate much-needed local employment,” he added.