A Start-ups Guide to Laws in the Philippines

A Start-ups Guide to Laws in the Philippines

Whether you’re a veteran business owner or a novice trying to get started, it’s important to know the laws of the land that you are operating in. Rules and regulations differ country to country and they might even change over time. So, keeping up-to-date is vital.

A Start-ups Guide to Laws in the Philippines

If the Philippines is where your business is headed, here are some of its laws and regulations that might impact your start-up.
Republic Act No. 10679
This act aims to help young entrepreneurs in the Philippines. Also called the “Youth Entrepreneurship Act”, it is a policy that, in essence, promotes the “sustained development of young Filipinos whose aptitude and skill in the field of finance and entrepreneurship shall be encouraged and honed through education and specialized training programs.” Basically, it’s a law to aid young people with the talent and determination to succeed in the field of business.
For a start-up in the Philippines, this Act makes finding collaborators and skilled staff higher.

Unintentional law breaking

The mobile app industry has become increasingly sophisticated and advanced. Long gone are the days when apps were mainly limited to productivity, social media or games. Some of the most useful apps we have now such as the marketplace app, Carousell; or the vehicle booking app, Grab, increase convenience and boost connectivity.

However, apps such as Uber and Tripid have ran into problems with the Philippine government as they are considered a public service app. In the Philippines, public services such as public transportation are required to be franchised, which runs contrary to the apps’ model of independent licensees. So, it’s important to know what you’re getting into to avoid a clash with the government.

Labor Code

The BOLE (Bureau of Labour and Employment) oversees the Labor Code, a legal framework of labour laws that governs employment and work relations. The basic policy is underlined in the Labor Code: “The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.”
There are some important things to take note of:
• Minimum wage laws vary from region to region, depending on productivity, growth rates, unemployment rates and other factors. Thus, working in a poorer sector might mean you have to pay less competitive rates. However, it can also mean it will be harder to find suitable talent. It’s important to look at the pros and cons before choosing a location for your start-up.
• For employees, the maximum work day is eight hours, excluding meal times. If overtime is needed, 25 per cent extra wage has to be given, 30 per cent if they work on public holidays.
• There is no mandatory retirement age for an employee. So, it can be stated in the contract. This can allow for additional flexibility allowing a capable employee to be retained for longer.

Knowing these laws can save you from being bound by red tape or, worse, getting into trouble. For a smooth start to your Philippines venture, acquaint yourself with them.