In a stunning display of progress, the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE Act) which was signed into law by the President on 11 November 2024, has undoubtedly accelerated the influx of foreign investors into the Philippines, as demonstrated by the overwhelming enthusiasm and strong interest from Chinese businessmen who participated in the Philippine-China Investment Meeting in Chongqing, hosted by Philippine Economic Zone Authority (PEZA), marking the beginning of a new era of economic collaboration.[1]
The conventions held proved to be a resounding triumph, as affirmed by PEZA Director General Tereso Panga and as manifested by some Chinese companies he met during investment meetings in Xiamen, Chongqing, Shenzhen, and Dongguan. The C+1 (China Plus One) strategy has been reshaped into C+1+1 (or C+2), with the Philippines now standing as the new unrivaled ‘plus-one’ destination in ASEAN, drawing a wave of companies relocating from China. [2]
The Initial Signs of Success Following the Reduction of the CIT for RBEs to 20%
The transformative provisions of the CREATE MORE Act, which cut the Corporate Income Tax (CIT) for Registered Business Enterprises (RBEs) by 20%, not only supported local and small businesses but also encouraged foreign companies to reinvest in operations and innovation. In November 2024, Secretary Recto said:
“CREATE MORE will open the floodgates of more high-impact investments both from our international investors and domestic enterprises. This will not only attract new investments and grow existing businesses to make more money, but also enable us to create high-quality jobs, increase our people’s income, and reduce poverty. Through CREATE MORE, we will secure a brighter future for every Filipino.”
Among the exciting features of the law is a more competitive and generous incentive package, elevating the Philippines into an irresistible powerhouse, drawing global investors like never before:
- By offering tax relief for qualifying businesses;
- The option for RBEs to choose between Special Corporate Income Tax (SCIT) of 5% or the Enhanced Deductions Regime (EDR);
- Enhanced deductions for vital expenses;
- Clarifying value-added tax (VAT) Rules;
- Strengthening the governance and accountability;
- Research and development;
- Employee training;
- Labor-intensive projects will be allowed to apply for an extension for another five (5) or ten (10) years; and
- Making clear transitory rules for pre-CREATE registered business enterprises (RBEs)[3]
Growth Unlocked for both Businesses and the Filipino Labor Force
This monumental investment is projected to create, two thousand (2,000) new jobs, a signal of a new era for growth and innovation in the Philippines, especially because of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating Economy (CREATE MORE) Act and talent pool of the young, English-proficient workforce will be a draw for investors from China. Quoting the Philippine President Ferdinand R. Marcos, Jr.:
“As we open new doors for opportunity, we drive businesses to reinvest their capital, build upon the workforce, and initiate a ripple effect that will be felt across generations.”
How Abo Law Firm Can Help
At ABO Law Firm, we specialize in guiding both domestic and multinational companies through the complexities of Philippine Employment Law, including the enforcement of the Labor Code of the Philippines. Our team delivers comprehensive legal solutions, tailored to our clients’ needs, ranging from obtaining permits and fulfilling compliance obligations to drafting contracts and fostering partnerships with Filipino investors and business owners. We assist clients in negotiating contracts with Filipino investors and landowners, as well as registering for investment incentives with the Board of Investments, the Philippine Economic Zone Authority, and other Special Economic Zones. Additionally, we specialize in registering companies with relevant government agencies, including the Securities and Exchange Commission (SEC), the Department of Trade and Industry (DTI), and the Bureau of Internal Revenue (BIR).
With the igniting wave of enthusiasm among the Chinese and multinational firms eager to invest in the Philippines is expected to move full steam ahead. Contact us today for expert assistance and to ensure seamless and compliant business operations in navigating Philippine labor and employment regulations and Corporation laws.
Written by: Atty. Ricci Andrea Reyes
[1] Department of Finance. “Recto: CREATE MORE Law is a win-win for both businesses and the Filipino People. Last accessed on 31 March 2025.
[2] Philippine News Agency. “PH becoming the preferred hub of firms relocating from China – PEZA”. Last accessed on 24 March 2025.
[3] Presidential Communications Office. “PBBM Signs Law for More Jobs, Economic Growth.” Last accessed on 24 March 2025.
