The Philippine Board of Investments One Window Network (BOI-OWN) is a cloud-based web portal and mobile application system that promotes full transparency and accountability through the Customer Relation Management (CRM) application/system which offers online investment facilitation of investor’s Pre-investment and Post investment queries and concerns, request for inbound missions and joint venture facilitation. The investors can easily track and monitor their concerns anytime and anywhere as they will receive email or SMS notification for every action/activity that will be undertaken by the designated account officers. The CRM application/system through the Investment Ombudsman will observe and monitor the prescribed time frame within which to act on submitted issues and concerns pursuant to Republic Act (R.A.) No. 9485 or the Anti-Red Tape Act (ARTA) of 2007 and/or R.A. No. 6713 or the Code of Ethics and Ethical Standards of Public Officials and Employees. In addition, the BOI-OWN will serve as the central repository of all investment and business-related services and information on the Investment Promotion Unit Network (IPUnetwork) and partner government agencies. A window for investors to directly lodge complaint with or request assistance from the Investment Ombudsman or the Civil Service Commission (CSC) on queries and concerns not acted as prescribed under R.A. No. 9485 and R.A. No. 6713 or refused to acted upon by concerned government agencies is provided.
Foreign investment policies, requirements, and incentives
significant employment opportunities relative to the amount of the capital
being invested, improve productivity of resources, increase volume and
value of exports, and provide a foundation for the future development of
Investment-related rules have been liberalized to facilitate entry of foreign
investments. This thrust is expected to continue.
may be allowed in all areas of investment except financial institutions
and those included in the Ninth Regular Foreign Investment Negative List
which took effect on 29 October 2012. This list includes:
Areas reserved to Filipinos by mandate of the Constitution and special laws such as but not limited to:
a. Mass media except recording, practice of licensed professions, retail
trade with paid-up capital of less than US$2.5 million, cooperatives,
and small scale mining, etc. where foreign ownership is prohibited; and
b. Private radio communications network, private recruitment,
advertising, ownership of land, operation and management of public
utilities, etc. where only minority foreign ownership is allowed.
Areas that are security and defense related; those with adverse effects on
public health and morals; and for the protection of small-and medium scale enterprises, i.e., domestic market enterprises with paid-in capital of
less than the equivalent of US$200,000 and domestic market enterprises
which involve advanced technology or employ at least 50 Filipino direct
employees, with paid-in capital of less than the equivalent US$100,000.
An enterprise registered with the BOI pursuant to the 1987 Omnibus Investments Code (Executive Order or EO 226) is entitled to, among others, the following incentives subject to certain terms and conditions:
i. Income tax holiday (ITH) for six years for pioneer firms and generally four years for non-pioneer firms. If a non-pioneer firm is located in a less developed area, it shall generally be entitled to six years ITH. Firms locating within Metro Manila shall not be granted ITH unless they are:
- Within a government industrial estate;
- Service-type projects with no manufacturing facilities;
- Power generating plants; or
- Exporters with expansion projects.
ii. Tax credit on raw materials, supplies, and semi-manufactured products
iii. Additional deduction from taxable income for labor expense (cannot
be simultaneously enjoyed with the ITH incentive)
iv. Duty-free importation of capital equipment, spare parts and
accessories until 10 May 2017
v. Additional deduction from taxable income for necessary and major
infrastructure works (cannot be simultaneously enjoyed with the ITH
Certain non-fiscal incentives are also available to registered enterprises,
among which are: employment of foreign nationals; guaranteed
repatriation of foreign investments and earnings thereon; and importation
of consigned equipment for an unlimited period subject to posting of a reexport bond.
B. PEZA Incentives
The Special Economic Zone Act of 1995, as amended, mandates the PEZA
to operate, administer, manage, and develop Special Economic Zones or ecozones. Business enterprises operating within ecozones shall be entitled to the ITH incentives mentioned above. PEZA-registered exporters likewise enjoy tax and duty exemption on importations of capital equipment, raw materials, and other merchandise directly needed in their registered operations. Moreover, after availment of the ITH incentive, PEZA-registered enterprises shall be subject to a final tax at a preferential rate of 5% of their gross income earned, in lieu of all other taxes, local and national. Information Technology (IT) companies are entitled to similar incentives if they are registered locators in an IT ecozone.
C. Other incentives
Three other special economic zones were created under three separate
special laws. These are the Cagayan Special Economic Zone, the
Zamboanga City Special Economic Zone, and the Aurora Special Economic
Zone. In 2009, Congress passed a law converting the previously established
Bataan Economic Zone to the Freeport Area of Bataan. In 2010, the Aurora
Economic Zone has been expanded and developed to become the Aurora
Pacific Economic and Freeport Zone. Business enterprises locating in these
ecozones are granted incentives similar to those granted to PEZA ecozone
enterprises. Enterprises operating within declared freeports/special economic zones under Republic Act (RA) 7227, as amended by RA 9400 (i.e., Subic Bay Freeport, Clark Freeport, Morong Freeport, John Hay Freeport, and Poro Point Freeport) shall, in lieu of paying other taxes, pay a final tax of 5% of gross income provided their income from the domestic market, i.e., sales to customers located within the customs territory or outside the ecozone, shall not exceed 30% of their income from all sources.
In general, investment incentives are not transferable. However, investment incentives are attached to the registered project and subject to certain qualifications, may be carried over from one owner to the next, at the discretion of the incentives giving body. Tax credit certificates may be transferred subject to certain conditions.
Registration requirements, application
procedures, and approval
procedures, and approval
proposed foreign investment must be made in any of the following:
a. Preferred areas of investment listed in the current Investment
Priorities Plan (IPP). A preferred area may be declared pioneer if it:
i. Engages in the manufacture, processing, or production (not
merely in the assembly or packaging) of goods, products,
commodities, or raw materials that have not been or are not
being produced in the Philippines on a commercial scale;
ii. Uses a design, formula, scheme, method, process, or system of
production or transformation of any element, substance, or raw
materials into another raw material or finished good which is
new and untried in the Philippines;
iii. Engages in the pursuit of agricultural, forestry, and mining
activities and/or services including the industrial aspects of
food processing whenever appropriate, pre-determined by
the concerned IPA to be feasible and highly essential to the
attainment of the national goal in relation to a declared specific
national food and agricultural program for self sufficiency and
other social benefits of the project; or
iv. Produces non-conventional fuels or manufactures equipment
which utilize non-conventional sources of energy or uses or
converts to coal or other non-conventional fuels of sources
of energy in its production, manufacturing, or processing
Pioneer status under any of the foregoing instances shall be subject to the
condition that the final product involves or will involve substantial use
and processing of domestic raw materials, whenever available; taking into
account the risks and raw magnitude of investment.
b. Enterprises engaged in preferred non-pioneer areas and exporting at
least 70% of their output.
c. Projects in less-developed areas provided that the activities in all of the
above cases are not reserved for Philippine nationals under the Foreign
Investment Negative List (FINL).
On the other hand, the projects that may qualify for registration with
PEZA or other IPAs are those that involve manufacturing for export and
the domestic market, free trade, tourism, agri-industrial export, bio-fuel
manufacturing, information technology, utilities, facilities enterprises, and
logistics service enterprises providing warehousing and trading operations
in the ecozones and development and operation of ecozones.
2. What possible obstacles would our application meet?
The obstacles normally encountered in the filing of applications include
non-compliance with the criteria set by the BOI, misinterpretation of the
coverage of activities listed in the IPP, failure to submit the required project
feasibility study and other supporting documents, and possible opposition
from sectors or enterprises which might be adversely affected by the
proposed project. The BOI requires publication of the notice of application
and conducts hearings if objections to the application are received.
For PEZA or other IPA applicants, the usual problem consists of noncompliance
with some of the criteria set by PEZA or other IPAs and failure
to submit required documents and information.
approval once all requirements are complied with?
Under EO 226, applications filed with the BOI shall be considered
automatically approved if not acted upon by the BOI Board within 20
working days after they have been officially accepted, subject to the usual
terms and conditions.
In the case of PEZA, the processing and evaluation by the appropriate
department usually takes about two weeks. The decision on the project is
made during the bimonthly meetings of the PEZA Board.
As to the other IPAs, processing of applications including the approval
of their respective Boards, take a period of 15 to 30 working days from
submission of all documentary requirements.
to the approval letter issued by the BOI/PEZA/other IPAs upon approval
of the application for registration. The general conditions include certain
management, financial, operational, and marketing restrictions which
must be properly complied with so as to avoid grounds for cancellation
of registration. The specific terms and conditions which may include
nationality, operational, and reporting requirements vary depending upon
the nature of the business enterprise.
the type of the proposed project and the period set by the proponent in the
feasibility study with the approval of the BOI/PEZA/IPAs. Generally, the
project must be commenced within one year from approval date, but may
be extended under applicable qualifying circumstances.
Securities and Exchange Commisions Registration and Requirements Approval
licensing, regulation, and supervision of all corporations and partnerships
organized in the Philippines, including foreign corporations licensed to
engage in business or to establish branch offices in the Philippines.
Registration with the SEC grants the entity with the corporate franchise or
juridical personality to operate and transact business in the Philippines.
approval of the application with the BOI/PEZA and other IPAs would be
conditional on the affirmative completion of the SEC processes.
working days from official acceptance of the application.
number of directors must be at least five but not more than 15. Hence, if
there are five directors, at least three must be residents.
be subscribed and at least 25% of the subscription must be paid. However,
subscriptions by alien individuals or foreign entities must generally be fully
paid, except in cases where the law provides for the specific amount of
Bangko Sentral ng Pilipinas
Regulations on Foreign Investments
required to be declared upon physical entry into the country. Funds
remitted outside the banking system cannot be registered as foreign equity
investment with the SEC and Bangko Sentral ng Pilipinas or BSP.
the repatriation of capital and the remittance of dividends, profits, and
earnings can be made using foreign exchange sourced from the banking
system. Otherwise, BSP registration is not necessary.
investment to Philippine pesos for purposes of registration with the BSP.
investments are not regulated. Foreign investors are free to remit dividends and profits from their own foreign exchange sourced from outside the domestic banking system. However, if the foreign exchange will be sourced from the local banking system, there is a need for the foreign investments to have prior registration with the BSP (refer also to item 3 above).
Authorized Agent Banks (AABs) are authorized to sell and to remit the
equivalent foreign exchange at the exchange rate prevailing at the time of
actual remittance (representing sales/divestment proceeds or dividends/
profit of duly registered foreign investment) upon presentation of the
Bangko Sentral Registration Document (BSRD) and other applicable
Bangko Sentral ng Pilipinas
Rules on foreign exchange (fx) transactions
Second, there must be evidence of receipt of the funds/assets by the local investee/beneficiary/or the local seller/issuer of the investment instruments,such as a Sworn Certification on such receipt and issuance of shares in consideration thereof (for investment in stock corporations); stockbroker purchase invoice or subscription agreement (for PSE-listed shares); accredited dealer Confirmation of Sale (for government securities); Certificate of Time Deposit (for peso time deposits with tenor of 90 days or longer); and contract/certificate of investment (for peso-denominated debt instruments). (For the complete registration procedure and documentation requirement, you may refer to the Appendix 10 of the FX Manual.)
All applications for registration of FDIs that are to be filed directly with the BSP, through the IOD, shall be supported by a duly accomplished application form (Annex W of the FX Manual).
The provision is applicable to FPIs [item nos. 13 of Section 35 of the FX Manual] that have been registered by custodian banks. For foreign investments registered by the BSP, prior approval must be obtained for the remittance of the excess peso funds.
The BOI also coordinates an inter-agency Investment Promotion Unit (IPU) network for investment after care. The BSP is a member of the IPU.
a. peso-denominated government securities;
b. PSE-listed securities of residents;
c. peso time deposits with tenor of at least 90 days;
d. non-resident investments in equities issued by non-residents previously listed in an international exchange and subsequently uplifted/transferred to PSE; and
e. non-resident investments in PSE-listed equity securities issued by
IPO registration of technology transfer
agreements, taxation of royalties and
agreements, taxation of royalties and
for said fees are covered by a technology transfer agreement (TTA) which
conforms with the mandatory and restrictive provisions of the Intellectual
Property Code (IPC). Compliance of the TTA with the IPC requirements
will not require the registration of the TTA with the Documentation,
Information and Technology Transfer Bureau (DITTB) of the Intellectual
Property Office (IPO).
The non-conformity of the TTA with the IPC shall generally render the
TTA unenforceable. However, in certain exceptional and meritorious cases
provided under the IPC, non-compliance with the IPC is allowed subject to
prior approval of the TTA by the IPO.
The IPC provides certain restrictions in the terms and conditions of the TTA
particularly those that will adversely affect free competition and trade. It
also prescribes certain mandatory provisions that should be included in the
tax and 12% value added tax when payable to a non-resident foreign
corporation. However, the tax rates for the royalties payable to residents of
foreign countries with which the Philippines has a tax treaty vary according
to the terms of the respective treaties.
maintaining offices, advertising, commission, etc. are allowed provided
they are duly supported by documents and that these costs are incurred in
connection with the regular course of trade or business of the local paying
involving the following: transfer of systematic knowledge for the
manufacture of a product or the application of a process; rendering of a
service, including management contracts; and the transfer, assignment, or
licensing of all forms of intellectual property rights, including licensing of
computer software, except computer software developed for mass market.
compliance, the DITTB conducts a summary evaluation of the TTA. If the
TTA conforms with the Prohibited Clauses and Mandatory Provisions of the IPC, the DITTB issues a Certificate of Compliance. Otherwise, the DITTB notifies the parties of any violation and requires them to comply with the IPC if they wish to obtain a Certificate of Compliance.
fees, or similar payments to a foreign company, net of the applicable taxes,
may be made through AABs without need of BSP approval.
The following documents may be required by the AABs to prove the
legitimacy of the transaction: (a) copy of contract/agreement; (b)
statement/computation of the royalty/copyright/patent/licensing fee; and
(c) proof of payment of withholding tax or tax exemption or entitlement to
preferential tax treatment, as the case may be.
Immigration Office FAQs
Investment Ombudsman FAQs
- 15 (2), (3) RAA 6770; Sec.A 13 Art. XI, 1987 Constitution
- Sec. 26 (1), RAA 6770; Rule IV, AO No. 07, as amended
- Office Order No. 327 & 337, series of 2014
- To assist in attaining the national goal of inclusive growth and poverty reduction;
- To encourage local and foreign investments in the country and improve global competitiveness; and;
- To expedite resolution investor issues and concerns through prompt action on investors’s grievances and speedy resolution of investor’s complaints.
- Grievance-handling or public assistance; and
- Delay in the delivery of frontline services relating to the establishment or conduct of business;
- Issuance of licenses, permits and certificates in relation to business to any person not qualified or legally entitled;
- Solicitation,demand or request by government official in exchange for the issuance of licenses, permits and certificates, the release of shipments and cargoes, as well as the arbitrary assessment of fees for the conduct of business; and
- Any other delay or refusal to comply with the referral or directive of the Investment Ombudsman team
- By telephone call;
- By calling parties to conference;
- By personal visit if the grievance requires immediate action;
- Thru other courses of action deemed necessary, appropriate and proper to expeditiously resolve the grievance.
OMBA Luzon: Investment Ombudsman, Office of the Deputy Ombudsman for Luzon, 3rd Floor, Ombudsman Building, North Triangle Agham Road, Diliman, Quezon City, 1101
OMB Visayas: Investment Ombudsman, Office of the Deputy Ombudsman for Visayas, Department of Agriculture RO7 Compound, M. Velez St. Guadalupe, Cebu City, 6000
OMB Mindanao: Investment Ombudsman, Office of the Deputy Ombudsman for Mindanao, 4th Floor HAC Building Alvarez Street, Davao City, 8000