The Department of Trade and Industry, through the Bureau of Investments (BOI), annually comes up with an Investments Priorities Plan (IPP), which lists investment areas and activities eligible for special incentives. The incentives aim to attract investors into putting upor continuing to operatea business related to the listed activities, with special emphasis given to investments in regions that are considered “less developed.”
The latest IPP went into effect in 2014 and was the first to be adopted for a span of three years. Unless amended, the activities in this IPP will remain incentivized up to 2016.
These activities encompass four broad sectors, four specific activities, and export activities.
The four sectors are:
· Manufacturing
· Agribusiness and fishery
· Services
· Infrastructure and logistics
The four specific activities are:
· Energy
· Housing
· Hospitals
· Private-Public Partnerships (PPP) projects
Export activities include the manufacturing of products for export, services exports, and activities supporting these exports.
Incentives include:
· tax holidays
· opportunities for tax reduction
· exemptions from certain duties and taxes
· less stringent employment and customs processes
Businesses or entities entitled to these incentives have to be registered with the BOI.
Who are qualified for BOI registration?
In general, the following are the qualifications for BOI registration:
· Filipino citizen or a Philippine entity with at least 60% Filipino ownership
· Engaged in an activity listed in the IPP
However, there are exceptions to both these criteria, as follows:
· Non-Filipino citizens or entities may qualify if they engage in a pioneer project or if they export at least 70% of their production
· Activities not included in the IPP preferred list may qualify if:
For Filipino-owned companies – at least 50% of the products are exported
For foreign-owned companies – at least 70% of the products are exported
What are the required documents for BOI registration?
· Accomplished and notarized application form
· Project Report which includes information on conformance to IPP standards and projected financial statements for five years
· Copy of the SEC Cert. of Reg., Articles of Incorporation/Partnership, and By‐laws
· Board resolution authorizing an officer to transact, execute, and sign on behalf of the applicant firm
· Proof of publication of the “Notice of the filing of Application”
· For existing firms: copies of Audited Financial Statement and Income Tax Return for the past 3 years or, if company has been existing less than three years, for the duration of its existence.
For new firms: Sworn Statement of Assets & Liabilities of Major Stockholders (for new corporations)
· Other documents required under the specific IPP activity
In registering a business with the BOI, requirements also vary depending on the nature of business (whether single proprietorship, partnership or corporation) and business ownership (whether Filipino or foreign-owned). The breakdown of Filipino and foreign ownership is also taken into account in application requirements.
As for export companies operating within the Philippine Economic Zone Authority (PEZA) ecozones, these need to present specific sets of documents for registration.
Filing fees need to be paid along with the submission of the required documents.
