How the CREATE Act Drives Digital Growth and Offshoring for NZ Firms

1. How the CREATE Act Drives Digital Growth and Offshoring for NZ Firms In today’s fast-paced digital economy, New Zealand businesses face mounting pressure to innovate while maintaining cost efficiency. Offshoring to the Philippines has emerged as a strategic solution, offering unparalleled access to a skilled workforce and advanced technological expertise. The CREATE Act (Corporate Recovery and Tax Incentives for Enterprises) has further elevated the Philippines as a premier offshoring destination by providing generous tax breaks and simplified compliance processes. This legislation unlocks New Zealand companies' potential to reduce operational costs while channelling resources into cutting-edge digital transformation initiatives. The Philippines’ robust IT-BPO sector, combined with its government-backed incentives, provides a unique value proposition for New Zealand firms striving to remain competitive in a global market. With over 700,000 skilled graduates entering the workforce annually and a thriving ecosystem of technological infrastructure, the Philippines enables businesses to achieve scalable growth. By integrating offshore talent into their operations, New Zealand companies can not only optimise efficiency but

2. also position themselves as leaders in innovation within the interconnected global economy. How the CREATE Act Aligns with New Zealand’s Digital Transformation Goals 1. Bridging Innovation and Incentives: A Strategic Partnership For New Zealand businesses navigating an increasingly competitive global market, offshoring to the Philippines offers a strategic partnership that blends innovation with economic incentives. The Philippines’ vibrant business process outsourcing (BPO) sector, supported by government-backed incentives like the CREATE Act, provides New Zealand firms access to cost-efficient services and cutting-edge expertise. This legislation offers tax breaks and simplified compliance for businesses operating in priority sectors, including IT and professional services, making the Philippines a prime destination for outsourcing partnerships, By leveraging these benefits, New Zealand companies can allocate resources to themselves for sustainable growth in the digital economy. innovation-focused initiatives, positioning The Philippines’ focus on fostering a digitally skilled workforce further strengthens its appeal as an outsourcing hub. According to industry reports, the country produces over 700,000 university graduates annually, many specialising in technology, engineering, and business disciplines. This robust talent pipeline enables New Zealand businesses to access a diverse range of expertise, from software development to financial services,

3. at a fraction of local labour costs. Moreover, the cultural compatibility and time zone alignment between the two nations facilitate seamless collaboration. Industry experts predict that as New Zealand companies continue to prioritise cost-efficiency and innovation, partnerships with Philippine outsourcing providers will play a pivotal role in enhancing their global competitiveness. 2. Accelerating Technology Adoption Through Offshore Collaboration The growing demand for rapid technology adoption has become a driving force behind New Zealand businesses increasingly turning to offshore to the Philippines as a strategic solution. The Philippines’ IT-BPO sector, valued at $30.9 billion in 2022 according to the Philippine Statistics Authority (PSA), underscored its status as a global outsourcing hub, particularly in IT services and software development. With a talent pool of over 700,000 skilled IT professionals, the country offers specialised expertise essential for advancing digital transformation. By leveraging Philippine-based teams, New Zealand firms can accelerate their technology adoption timelines, accessing cost-efficient yet highly skilled resources to meet evolving industry demands. The CREATE Act further amplifies this advantage, offering tax incentives that make offshore investments in technology more viable for New Zealand companies. Recent McKinsey insights reveal that organisations engaging in offshore collaborations often experience expedited digital transformation, gaining expertise in areas such as artificial intelligence, cloud computing, and data analytics. Notably, the Philippines IT-BPO industry has sustained annual growth of 8%, with roles like data scientists and software developers seeing demand spikes of 10-15% in recent years. These trends signify a thriving ecosystem primed for partnerships that drive technological progress without compromising quality or efficiency. Aligning with the Philippines’ burgeoning IT sector through offshoring not only equips New Zealand businesses with critical technical capabilities but also fosters a competitive edge in the global digital economy. Beyond cost savings, offshoring to the Philippines has emerged as a catalyst for innovation, enabling companies to harness cutting-edge solutions while benefiting from government-backed incentives. This synergy positions New Zealand firms to lead in adopting transformative technologies, ensuring long-term resilience and success in an increasingly interconnected world.

4. 3. The CREATE Act’s Impact on Cost-Effective Digital Solutions The CREATE Act has been instrumental in making offshoring to the Philippines a financially advantageous strategy for New Zealand businesses. By offering tax incentives and streamlining regulatory frameworks, the act reduces the operational costs for foreign companies engaging in offshoring. For industries seeking digital solutions, this legislative initiative strengthens the Philippines’ position as a premier offshoring destination, enabling New Zealand firms to optimise operations while accessing high-quality expertise in emerging technologies. This framework offers substantial benefits, including up to 10 years of tax holidays for eligible companies, providing New Zealand businesses with the opportunity to reinvest savings into their digital growth strategies. Sectors such as IT, cloud computing, software development, and digital marketing particularly benefit from this model, with cost savings of up to 30% compared to local hiring, according to Deloitte. These financial advantages are often channelled into scaling advanced technologies and streamlining processes, helping businesses achieve greater operational efficiency while maintaining competitive pricing. Beyond cost savings, the CREATE Act redefines offshoring to the Philippines as a gateway to digital transformation. Access to the Philippines’ highly skilled talent and cutting-edge infrastructure empowers New technologies such as AI, blockchain, and data analytics seamlessly into their workflows. This synergy fosters innovation and enhances operational agility, positioning businesses Zealand businesses to integrate

5. to thrive in a competitive, technology-driven global market. The CREATE Act thus not only drives cost efficiency but also facilitates a transformative partnership that propels New Zealand firms toward sustained growth and innovation. 4. Strengthening New Zealand’s Competitive Edge in the Digital Economy As New Zealand businesses strive to strengthen their position in the global digital economy, outsourcing to the Philippines has emerged as a strategic lever for growth and innovation. The Philippines’ rapidly expanding digital infrastructure and highly skilled workforce make it an attractive partner for New Zealand companies looking to scale operations, reduce costs, and enhance their technological capabilities. With over 1.3 million professionals employed in the country’s IT and business process outsourcing (BPO) industry, according to the Philippine Statistics Authority, the Philippines offers a vast talent pool transformations. By leveraging the cost-effective nature of outsourcing, New Zealand firms can redirect resources into high-value activities such as innovation, research and development, and customer experience, which are essential for staying competitive in an increasingly digitised global marketplace. capable of supporting diverse digital Offshoring to the Philippines also allows New Zealand businesses to tap into a culture of adaptability and rapid technology adoption. The Philippine workforce is highly proficient in the latest digital tools and methodologies, making them well-positioned to drive digital solutions such as cloud computing, AI, and data analytics. By integrating offshore teams into their operations, New Zealand companies can accelerate digital transformation while focusing on their core competencies. This integration not only boosts operational efficiency but also supports long-term strategic goals by providing access to cutting-edge technologies at a fraction of the cost of local talent. Industry experts predict that outsourcing to the Philippines will continue to play a crucial role in New Zealand’s digital growth, particularly in sectors like finance, engineering, and marketing, where technological advancements are critical for maintaining a competitive edge. 5. Building Resilience through Strategic Offshore Partnerships In today’s dynamic global market, resilience is an essential component of business success. For New Zealand companies, offshoring to the Philippines offers a strategic path to operational agility and continuity. The Philippines’ robust outsourcing sector, employing over 1.3 million professionals, provides a skilled and adaptable workforce capable of addressing evolving business needs. This talent pool, combined with cost-efficient solutions, allows businesses to scale operations seamlessly while maintaining quality. The cultural compatibility and strong work ethic of the Philippine

6. workforce further enhance collaboration, ensuring that offshore teams integrate effectively with New Zealand’s business processes. The CREATE Act strengthens these benefits by reducing tax burdens and simplifying compliance, enabling New Zealand firms to reinvest savings into core operations and long-term growth. Offshore partnerships in the Philippines have demonstrated their value in supporting industries like IT and customer service, particularly in periods of high demand or economic uncertainty. By leveraging this synergy, New Zealand companies can enhance their resilience, prioritising innovation and adaptability in a competitive global environment. Offshoring to the Philippines, therefore, is not merely a cost-saving measure but a strategic advantage in building sustainable success. Leveraging the CREATE Act for Innovation and Growth in Digital Transformation The CREATE Act has reshaped the landscape of offshoring to the Philippines, empowering New Zealand businesses to pursue digital transformation with a strategic edge. Beyond its tax incentives and simplified compliance measures, the act serves as a gateway for companies to invest in innovation while reducing operational costs. By collaborating with the Philippines’ digitally skilled workforce and leveraging its cutting-edge IT infrastructure, New Zealand firms can achieve a seamless integration of advanced technologies, driving productivity and enhancing competitiveness on the global stage. What sets the CREATE Act apart is its role in fostering long-term growth and adaptability. Offshoring to the Philippines, bolstered by this legislation, enables businesses to cultivate resilience in an ever-evolving market. The act supports not only immediate-cost efficiency but also the strategic alignment of resources toward innovation-focused objectives. This partnership positions New Zealand firms to harness transformative solutions, ensuring they remain at the forefront of the digital economy for years to come.