|
Omnibus Investment Code
of 1987 (EO 226) a amended is the law that grants incentives to
foreign investors. The incentives available to BOI registered
companies or enterprise are as follows:
Fiscal Incentives
• Income tax holiday.
From the start of commercial operations, newly
registered pioneer projects
are exempt from income taxes for six years,
non-pioneer firms for four years, and
expansion projects for three years
(for incremental sales revenue/volume).
New registered pioneer and
non-pioneer enterprises may avail of a bonus
year in each of the
following cases if:
• Indigenous raw materials used are at least 50% of the total cost
of raw
materials for the preceding
years
• The ratio of total imported and domestic capital equipment to
number of
workers does not exceed US$10,000 to one worker, or
• The net foreign exchange savings or earnings amount to at least
US$500,000 annually during the first three years of operation
• Additional deduction of labor expenses from taxable income
• Tax credit for taxes and duties on raw materials used in the
manufacture,
processing, or production of export products
• Additional deduction of necessary and major infrastructure
expenses from
taxable income
• Access to bonded manufacturing and warehouse system
• Exemption from taxes and duties on imported supplies and spare
parts
for consigned equipment
• Exemption from wharfage dues and any export tax, duty fee, and
impost
Non-fiscal Incentives
• Simplification of
customs procedures. Customs procedures are simplified
for the importation of
equipment, spare parts, raw materials, and supplies
and the export of products of BOI-registered
firms.
• Unrestricted use of consigned equipment. BOI-registered
enterprises’ use
of consigned equipment is unrestricted provided a re-export bond is
posted.
• Employment of foreign nationals. Foreign nationals may be employed
in
supervisory, technical, or advisory positions within five years from a
registered project's registration, extendible for limited periods to be
determined
by the BOI. The positions of president, general manager, and
treasurer, or their
equivalents, of foreign-owned registered firms may be
retained by foreign nationals for a
longer period.
Qualifications for BOI-Registered Enterprises
1. If a natural person,
he or she must be a Philippine citizen.
2. If a partnership or any other association, it must be organized
under
Philippine laws
and at least 60% of its capital is owned and controlled by
Philippine citizens.
3. If a corporation, it must be organized under Philippine laws and
at least
60% of the
capital stock outstanding and entitled to vote is owned and
held by
Philippine nationals, and at least 60% of the members of the
Board of
Directors are Philippine citizens. If the corporation does not
possess the
required degree of ownership by Philippine nationals, the
following circumstances must
be satisfactorily established:
- It proposes to engage in a pioneer project which cannot be readily
and
adequately filled
by Philippine nationals, or the applicant will export at
least 70% of its total production.
- It obligates itself to attain the status of a Philippine national
within 30
years from date of registration, but a registered enterprise which exports
100% of its total production need not comply with this requirement.
- The pioneer area that it will engage in is not within the
activities
reserved by the Constitution to Philippine citizens or corporations owned
and controlled by citizens.
- The business activity that the applicant will engage in is listed
under the
Investment Priorities Plan (IPP)
of the Philippines.
|
