Ease of Doing Business Law in PH: 8 Things You Need to Know

The Ease of Doing Business (EODB) Law is now in effect after President Rodrigo Duterte signed the bill in late May. Also known as Republic Act 11032, the newly signed law aims to attract entrepreneurs to start a business in the Philippines.

EODB should be a welcome development for both Filipino and foreign investors who have been calling on the government to do something about the circuitous process of doing business in the country.

The passage of the law couldn’t have come at a better time since the Philippines registered the worst decline among the Asia Pacific region in the 2018 World Competitiveness Yearbook. It should also be noted that the law is an amendment of the Anti-Red Tape Act of 2007.

At its core, RA 11032 orders government agencies and local government units to eliminate unnecessary requirements and processes that tend to delay the establishment or expansion of businesses in the pipeline.

Here’s everything else you need to know about the framework and features of the monumental Ease of Doing Business Law:

Ease of Doing Business Law: 8 Salient Features You Need to Know

1. Reduced Processing Time

The time to process your transactions should not go beyond the prescribed number of days:

• Three (3) working days for simple transactions
• Seven (7) working days for complex transactions
• Twenty (20) working days for highly technical transactions

The law’s Implementing Rules and Regulations (IRR) will determine which transactions are simple, complex, or highly technical.

Local and national government agencies, government owned and controlled corporations (GOCCs), and government instrumentalities in the Philippines and abroad should abide by the standardized processing time. If an agency fails to approve or disapprove a business application within the given timeframe, the application is considered approved.

2. Simplified Steps for Securing Documentation Requirements

The issuance of local business licenses, clearances, permits, or authorizations will be faster and more efficient, thanks to the following measures:

• A unified business application form, which involves using a single form to obtain business permits and renewals. This means there would be fewer signatories who would green-light your business applications. In the past, business owners had to fill up multiple application forms with different government agencies.
• Automating LGUs’ system of issuance of business permits and licenses.
• Establishment of a Business One-Stop Shop (BOSS) – a single facility designated by the city or municipality which will house LGU offices related to zoning, business permit and licenses, and treasury as well as the Bureau of Fire Protection.
• Issuance of barangay clearances and permits at the city’s municipal office instead of the barangay/village.

3. Establishment of the Citizen’s Charter

All agencies should come up with a Citizen’s Charter, which is a useful reference for the public regarding policies and procedures of government offices handling business-related transactions. The Citizen’s Charter includes the following information:

• Checklist of requirements for a particular application or request
• Name/s of person/s responsible for the transaction
• Amount of fees to be paid
• Standard operating procedure (SOP) in obtaining a particular service
• Maximum time it takes to complete the process
• Procedure for filing complaints

4. Zero Contact Policy

Under this policy, no government employee or officer should have any form of contact with anyone who is applying or requesting to the agency. This provision in the EODB Law underscores the government’s drive against corruption in its ranks.

5. Setting Up of a Central Business Portal and Philippine Business Databank

The Department of Information and Communications Technology (DICT) is tasked to oversee online business applications through the establishment of a central business portal. The portal will link the systems of government offices on the national and local levels to make it easy for entrepreneurs and investors to register their business.

Meanwhile, the Philippine Business Databank will contain information about the validity, status, or existence of all registered business entities. This means that if you’re applying for business renewal, you’ll no longer have to submit the same documentation requirements from your original application since all information about your business is stored in the databank.

6. Interconnectivity Infrastructure Development

Through this provision, the government intends to fast-track the processing and approval of all business transactions related to telecommunication technologies, equipment, and services.

7. Creation of the Anti-Red Tape Authority (ARTA)

For the longest time, the Philippines has tried to eliminate the culture of red tape in government offices, with dismal success. Needless to say, this has prevented the country from having a business environment that will entice investors to start their business here.

Under the EODB Law, there will be a dedicated body who will enforce anti-red tape policies among government employees and officials. Through the ARTA, the government hopes to raise the country’s ranking in competitiveness and ease of doing business.

The Director General of the ARTA will also be part of the EODB/Anti-Red Tape Advisory Council, which will serve as the ARTA’s policy and advisory body.

8. Penalties

Erring government employees or officials who violate or fail to comply with any provision in the EODB Law will be penalized on their first and second offense. The penalty may range from administrative liability to criminal liability and fines.

Wrap-Up

In business, timing is crucial. Now that the new Ease of Doing Business Law is in place, you have the perfect opportunity to start your business or expand your business operations in the Philippines.

References:

https://www.philstar.com/headlines/2018/05/29/1819642/ease-doing-business-act-2018-signed

https://www.dti.gov.ph/businesses/ease-of-doing-business#ra-11032-ease-of-doing-business-and-efficient-government-service-delivery-act-of-2018

https://www.rappler.com/nation/203536-duterte-signs-ease-doing-business-act-philippines

https://businessmirror.com.ph/duterte-to-approve-ease-of-doing-business-bill/