Easing Barriers to Entry A Call for Unity Introducing the New Philippine Government page 12 The Philippines relaxes its toughest investment laws page 6
Volume 2. Year 2022. Table of Contents 3 6 12 22 27 31 Foreword Feature Article Easing Barriers to Entry Cover Story A Call for Unity In Focus 2022 World Business Outlook Survey Opinion Apprenticeship: The Da Vinci Formula Imprint
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Republic Act No. 11595 Republic Act No. 8762 Minimum Paid Up Capital* USD 500,000 / EUR 450,000 USD 2.5 Million / EUR 2.25 Million Minimum investment per retail store* USD 200,000 / EUR 185,000 USD 830,000 / EUR 765,000 Pre qualification of Foreign Retailers No longer required 5 year retailing branches 5 year track record in retailing Promotion of Locally Manufactured Products Encouraged but amount is not specified 10% 30% of the aggregate cost of the stock inventory *Approximate values
CREATE Law Old Law Exporters Domestic Exporters Domestic Income Tax Holiday Duration 4 7 years 4 7 years 4 6 years 4 6 years Option 1: ITH + 5% tax on Gross Income Earned (GIE) Special Corporate Income Tax (SCIT) / GIE Duration 14 17 years ITH: 7 years, GIE: 10 years Not Applicable Indefinite Indefinite Option 2: ITH + Enhanced Deductions (ED) Enhanced Deductions Duration 10 years 15 years None None ITH + Enhanced Deductions Duration 14 17 years ITH: 7 years, ED: 10 years 9 12 years ITH: 7 years, ED: 5 years None None CREATE Law Old Rate Domestic Corporations 25% 30% Minimum Corporate Income Tax for Domestic Corporations 1% 2% Domestic Corporations with Net Taxable Income not exceeding ₱5M 20% 30% Non-Profit Proprietary Educational Institutions and Hospitals 1% 10% Resident Foreign Corporations 25% 30% Minimum Corporate Income Tax for Resident Foreign Corporations 1% 2% Non Resident Foreign Corporations 25% 30% Regional Operating Headquarters 25% 10%
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A Catastrophic Pathway toward Recovery
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20% 20% 16% 13% 9% 19% 47% 28% 19% 27% 21% 29% 15% 14% 15% 32% 57% 34% 26% 34% 47% 55% 41% 44% 46% Business Situation Business Expectation Economic Development Investment Intentions Employment Intentions Spring 2020 Fall 2020 Spring 2021 Fall 2021 Spring 2022 u
32 26 27 26 38 34 40 27 24 17 10 33 47 41 21 51 53 51 56 49 53 50 48 49 47 25 33 32 42 42 17 21 22 18 13 13 10 25 27 36 65 34 21 17 37 -80 -60 -40 -20 0 20 40 60 80 100 120 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 Better Constant Worse Balance (better minus worse) q
78% 61% 26% 24% 16% 14% 14% 9% 9% 4% 4% 2% 5% Higher costs for energy, raw materials and inputs Supply chain and logistics disruptions Lack of raw
and inputs Reduciton in incoming orders Increase in trade barriers Loss of business partners, severance
Production stop / reduced production Increased legal certainty
in payment transactions None Increase in new orders Higher production Others 66% 53% 39% 24% 21% 20% 17% 15% 14% 9% 5% 3% 3%
materials
of business…
Obstacles
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Volume 2. Year 2022.
