Ho Chi Minh City Waives the Tax. Manila's Fee Window Is Still Open for Business.
Vietnam's tech hubs dangle years of tax relief while Cebu and Davao teams pay the Innovative Startup Act's fees and wait, so some redomicile before they ship.
A two-person team in Cebu building a logistics app can look at Ho Chi Minh City, where seed founders are offered a multi-year tax holiday, and do the math against Republic Act 11337 at home, where the promised incentives sit behind a stack of registration fees that come due first. That gap is the whole story, and founder communities in Cebu and Davao report weighing the move with their cap tables before they even have a product to sell.
The Break the Law Promised, and the Bill That Arrives First
The Innovative Startup Act reads well on paper. DOST, DTI, and DICT run programs meant to cut costs for young companies, and the law's benefits are real enough to quote in a pitch deck.
The trouble sits at the fee window. Founders describe registering under one agency, then getting billed by the office that processes the actual paperwork, so the incentive and the cost land in different rooms and the net saving thins out before anyone ships.
Vietnam Priced the Onboarding First
Ho Chi Minh City took the opposite approach and put the sweetener at the front. Advocacy groups and regional startup trackers describe seed-stage founders there being offered years of tax relief early, before revenue, which is exactly when a two-person team is deciding where to plant its holding company.
Da Nang has become the practical landing pad for Filipino teams making that call, with lower operating costs and a growing English-speaking developer pool. The pitch is simple: incorporate there, hire there, and let the tax clock start running in your favor from month one.
What Leaves Before the Product Does
The founders who move are not fleeing the market. They still sell to Filipino users, still hire Filipino engineers on paper, still fly home for family. The company itself, the entity that owns the code and books the revenue, is what redomiciles.
That matters because the entity is where the tax base lives, where the eventual acquisition or Series A closes, and where the jobs get counted. Advocacy organizations tracking capital formation have flagged this pattern across the region, and the Philippines keeps landing on the wrong side of the ledger.
The Fix Is Boring and Nobody Ships It
None of this needs a new law. It needs the incentives in RA 11337 to arrive before the fees, in the same office, on a timeline a founder without a lawyer can survive.
Until that happens, the calculation stays brutal in its simplicity. A Cebu team can pay to register at home and wait for a break that clears later, or it can incorporate in Vietnam and start banking the saving now, and more of them are choosing the second option before their first user ever downloads the app.
