4 Omnibus Handouts

Registration of Enterprises:
THE OMNIBUS INVESTMENTS CODE OF 1987

(Executive Order No. 226) Qualifications:
1. If the applicant for incentives is a natural person or individual, he must be a citizen of the Philippines.
- Integrates the basic laws on investments, If the applicant is a partnership or any other association, it must be organized under Philippine laws and
BOARD OF INVESTMENTS at least sixty percent (60%) of its capital must be owned and held by Philippine nationals; or in case of a
clarifying and harmonizing their provisions to
encourage and guide domestic and foreign corporation or a cooperative, it is organized under Philippine laws and that at least sixty per cent (60%)
• The Board shall be responsible for the
investors. of the capital stock outstanding and entitled to vote is owned and held by Philippine nationals and at
regulation and promotion of investments least sixty per cent (60%) of the members of the Board of Directors are citizens of the Philippines.
in the Philippines as well as the
implementation of the provisions under *If it does not possess the required degree of ownership, the following must be established:
this Code.
proposes to engage in a pioneer project whose available measured capacity cannot
• composed of seven (7) governors: be readily and adequately filled by Philippine nationals; or, is exporting at least
the Secretary of DTI, seventy per cent (70%) of its total production
three (3) Undersecretaries of DTI
to be chosen by the President, obligates itself to attain the Philippine Nationality within thirty (30) years from the
and date of registration (a registered enterprise which exports one hundred percent
three (3) representatives from (100%) of its total production need not comply with this requirement)
other government agencies and
the private sector. that the pioneer it will engage in is not reserved by the Constitution or other laws of
the Philippines for Philippine citizens and corporations only
Qualifications of Governors:
o at least thirty (30) years old (2) The enterprise applicant is engaged or proposing to engage in either:
o of good moral character &
- a preferred project listed or authorized in the current Investment Priorities Plan within a
o of recognized competence in
different fields reasonable time to be fixed by the Board
*if preferred project not listed- at least fifty percent (50%) of its total production is for export or it
BOOK I is an existing producer which will export part of production;
INVESTMENTS WITH INCENTIVES
- the sale abroad of export products bought by it from one or more export producers;
Who can qualify for incentives under EO 226? - in rendering technical, professional or other services or in exporting television and motion pictures
Persons or entities that engage in the priority and musical recordings made or produced in the Philippines directly or through a registered trader.
areas of investment under the Investment
Priorities Plan may avail of the incentives (3) The applicant is capable of operating on a sound and efficient basis; and
provided under the Code upon registration with
the Board of Investments. (4) To install an adequate accounting system or to establish a separate corporation for each preferred
project undertaken
The following incentives are available to a BOI-registered enterprise:
1. Tax Exemptions 3. Additional Deductions form Taxable Income
a. Income Tax Holiday (ITH) a. 5-years additional deduction for labor expense,
equivalent of fifty percent (50%) of the wages of
o New projects with a pioneer status for six(6) years; additional skilled and unskilled workers in the direct
o New projects with a non-pioneer status for (4) years; labor force. This incentive shall be granted only if the
o Expansion projects for three (3) years, limited to incremental enterprise meets a prescribed capital to labor ratio and
sales revenue/volume as a general rule; shall not be availed simultaneously with ITH.
o New or expansion projects in less developed areas ("LDAs") 3 for
six (6) years, regardless of status; and, b. Registered enterprises locating in LDAs or in areas
o Modernization projects for three (3) years, limited to incremental deficient in infrastructure, public utilities and other
sales revenue/volume, as a general rule. facilities may deduct from taxable income an amount
equivalent to the expenses incurred in the development
b. A registered enterprise with a bonded manufacturing warehouse shall of necessary and major infrastructure works. This
be exempt from customs duties and national internal revenue taxes on its privilege is not granted to mining and forestry-related
importation of required supplies/spare parts for consigned equipment or projects.
those imported with incentives.
c. Exemption from wharfage dues and export tax, duty, impost and fees
4. Non-fiscal Incentives
for exports of non-traditional export products.
a. Employment of foreign nationals in supervisory,
d. For agricultural producers, exemption from the payment of all taxes
technical or advisory positions for five (5) years form
and duties on their importation of breeding stocks and genetic materials.
date of registration. The position of president, general
manager and treasurer of foreign-owned registered
enterprises or their equivalent shall however not be
subject to the foregoing limitations.
b. Simplification of customs producers for the

2. Tax Credits importation of equipment, spare parts, raw materials
and supplies and export of processed products.
a. For agricultural producers, tax credit equivalent to one hundred
percent (100%) of the value of national internal revenue taxes and c. Importation of consigned equipment for a period of 10
customs duties on domestic breeding stocks and genetic materials. years from date of registration, subject to posting of a
re-export bond.
b. Tax credit equivalent to the national internal revenue taxes and
duties paid on raw materials, supplies and semi-manufacture of export
products and forming part thereof.

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4 Omnibus Handouts

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Registration of Enterprises:

THE OMNIBUS INVESTMENTS CODE OF 1987

1. Tax Exemptions 3. Additional Deductions form Taxable Income

b. Simplification of customs producers for the

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