INDUSTRY & INVESTMENTS BUILDING

385 Sen Gil Puyat Avenue, Makati City, Philippines 1200 Tel Nos.: (632) 897-6682 / (632) 809-9308 / (632) 895-3640

www.boi.gov.ph

Usual Business Permits to Obtain 1. Barangay Clearance 4. Building Permit 2. Locational Clearance 5. Mayor’s Permit 3. Business Permit

and other permits needed depending on the nature of business

Step 04: Special Business Permits/Certificates Concerned Agency: Concerned National Government Unit Sample Special Business Permits/Certificates/Endorsements

1. Environmental Compliance Certificate For: Project status whether Critical, Non-critical or Certificate of Non-coverage Address: DENR Compound, Visayas Ave, Diliman, Lungsod Quezon, 1116 Kalakhang Maynila Number: (+632) 376-5541 Website: www.emb.gov.ph

2. Endorsement from Department of Energy (For BOI registration) For: Energy related projects Address: Energy Center, Rizal Drive,Bonifacio Global City, Taguig City, Number: (+632) 479-2900 Website: https://www.doe.gov.ph/

3. Department of Labor and Employment (DOLE) For: Companies with 50 or more workers, they are required to register with DOLE, under the Bureau of Local Employment which administers the registration of establishments. Address: Bureau of Local Employment 6th Floor, BF Condominium cor. Solana & Soriano St., Intramuros, Manila 1002 Number: (+632) 528-0087 Website: www.ble.dole.gov.ph Employment of foreign nationals requires Alien Employment Permit (AEP) from DOLE

4. Bangko Sentral ng Pilipinas For: For banks, financing companies, pawnshops, money changers, and other financial institutions. Address: A. Mabini St. cor. P. Ocampo St., Malate Manila 1004 Number: (632) 708-7701 Website: www.bsp.gov.ph

5. Land Transportation Office For: All land vehicle registration, permits and license (drivers) Address: LTO Compound, East Avenue, Quezon City 1100 Number: (+632) 922-9061 Website: www.lto.gov.ph

6. Other agencies involved depends on the company’s proposed project

Step 05: Incentives (Optional) Concerned Agency: There are 19 Investment Promotion Agencies mandated to grant incentives subject to qualifications and requirements.

Board of Investments Address: 385 Sen. Gil Puyat Avenue, Makati City 1200 Number: (+632) 897-6682 Website: www.boi.gov.ph Location specific (Ecozones and Freeport Zones)

Aurora Pacific Economic Zone and Freeport Area The Freeport Area of Bataan (FAB)

Bases Conversion and Development Authority (BCDA) Cagayan Economic Zone Authority (CEZA) Clark Development Corporation (CDC) The Clark International Airport Corporation The John Hay Management Corporation The Mindanao Development Authority (MinDa) Philippine Economic Zone Authority (PEZA)

The Philippine Retirement Authority (PRA) The Phividec Industrial Authority Poro Point Management Corporation Regional Board of Investments – Autonomous Region of Muslim Mindanao (ARMM) Subic Bay Metropolitan Authority (SBMA) Subic Clark Alliance for Development Council (SCAD) Tourism Infrastructure and Enterprise Zone Authority (TIEZA) Tourism Promotions Board (TPD) Zamboanga City Special Economic Zone Authority

Step 01: Business Name/ Business License For a Filipino National – Business Name Registration For a Foreign National – Proper Visa, Business Name Registration Business Name Registration

A. Sole Proprietorship Concerned Agency: Department of Trade and Industry (DTI) Address: 2F Metro House Bldg., 345 Sen. Gil Puyat Ave., Makati City Number: (+632) 811-8293/32 Website: https://bnrs.dti.gov.ph/web/guest/home

B. Partnership and Corporation Concerned Agency: Securities and Exchange Commission (SEC) Address: Secretariat Building, PICC Complex Roxas Boulevard, Metro Manila, Philippines Number: (+632) 818-0921/1119 Website: http://www.sec.gov.ph/

Visas A. Concerned Agency: Bureau of Immigration

Address: Magallanes Dr., Intramuros, Manila, 1002 Metro Manila Number: (+632) 527-5656/527-3248 Website: http://immigration.gov.ph/

Special Visas B. Special Investor’s Resident Visa (SIRV)

Concerned Agency: Board of Investments Address: 385 Sen. Gil Puyat Avenue, Makati City 1200 Number: (+632) 896-5167/895-3641 (Incentives Service) Website: www.boi.gov.ph (not qualified for a foreign sole proprietorship)

C. Special Resident Retirees Visa (SRRV) Concerned Agency: Philippine Retirement Authority 29th Flr., Citibank Center, 8741 Paseo de Roxas, cor. Makati Ave. Number: (+632) 848-1412 Website: https://pra.gov.ph/

Step 02: Employer-Employee Compliance (Mandatory) 1. Tax Payer Identification Number (TIN)

Concerned Agency: Bureau of Internal Revenue (BIR) Address: BIR National Office Bldg., BIR Road, Diliman, Quezon City, Philippines Number: (+632) 981-7003 Website: https://www.bir.gov.ph

2. Social Security System Concerned Agency: Social Security System (SSS) Address: SSS Building East Avenue, Diliman, Quezon City, Philippines Number: (+632) 920-6401 Website: https://www.sss.gov.ph

3. Health Insurance System Concerned Agency: Philippine Health Insurance System (PHIC) Address: Citystate Centre, 709 Shaw Blvd., 1603 Pasig City, Philippines Number: (+632) 441-7444 Website: https://www.philhealth.gov.ph

4. Home Development Mutual Fund (HDMF) Concerned Agency: Pag-IBIG Address: 2nd Floor, JELP Building, 409 Addition Hills, Shaw Boulevard, Mandaluyong City. Number: (+632) 724-4244 Website: http://www.pagibigfund.gov.ph

Step 03: Local Business Permits (Mandatory) Concerned Agency: Local Government Unit

Address: Municipality/Barangay of the Actual Business Location Usual Business Permits to Obtain

Inside Economic Zones Aurora Pacific Economic Zone and Freeport Area The Freeport Area of Bataan (FAB) Bases Conversion and Development Authority (BCDA) Cagayan Economic Zone Authority (CEZA) Clark Development Corporation (CDC) The Clark International Airport Corporation The John Hay Management Corporation The Mindanao Development Authority (MinDa) Philippine Economic Zone Authority (PEZA) The Philippine Retirement Authority (PRA) The Phividec Industrial Authority Poro Point Management Corporation

Regional Board of Investments – Autonomous Region of Muslim Mindanao (ARMM) Subic Bay Metropolitan Authority (SBMA) Subic Clark Alliance for Development Council (SCAD) The Philippine Retirement Authority (PRA) The Phividec Industrial Authority Poro Point Management Corporation Regional Board of Investments – Autonomous Region of Muslim Mindanao (ARMM) Subic Bay Metropolitan Authority (SBMA) Subic Clark Alliance for Development Council (SCAD) Tourism Infrastructure and Enterprise Zone Authority (TIEZA) Tourism Promotions Board (TPD) Zamboanga City Special Economic Zone Authority

The government is committed to sustaining the robust outlook on the economy as it takes a proactive role in stepping up investment to a whole new level. This brochure will guide you on the procedures and the applicable laws that will assist you in doing business in the Philippines. We invite you to explore opportunities for investments in key areas of the economy.

1. Who are qualified to invest in the Philippines?

Anyone, regardless of their nationality, is welcome to do business and invest in the country, in almost areas of economic activities.

2. Is it possible for foreigners to invest up to 100% capital in a domestic entity?

Yes, it is possible to do so if it meets the following conditions:

a. Under the Foreign Investments Act of 1991 (Republic Act 70142 as amended by RA 8179), foreign investors are allowed to invest 100% equity if the proposed activity he intends to venture in is not among those listed in the FINL (Foreign Investments Negative List).

The FINL is a shortlist of investment areas and activities which may be opened to foreign investors and/or reserved Filipino nationals.

Downloadable Link: http://www.boi.gov.ph/files/laws/FOREIGN%20INVESTMENT%20NEGATIVE%20LIST%20TEN.pdf

b. If the paid-up capital domestic market enterprise is at least US $ 200, 000.00 which may be lowered to US $ 100,000.00 if the following conditions are met:

I. Introduction of advanced technology;

Concerned Agency: Department of Science and Technology Address: DOST-NCR Bldg, DOST Compound, Gen. Santos Ave., Bicutan, Taguig City, Philippines Number: (+632) 837-2071 Website: www.dost.gov.ph

Or

II. Employment of at least 50 direct employees.

Concerned Agency: Department of Labor and Employment Address: Regional office where business is located Number: (+632) 527-8000

Address: Regional office where business is located Number: (+632) 527-8000 Website: www.dole.gov.ph

3. What are the business entry options in the Philippines?

Sole Proprietorship

A business entity formed by an individual who has full control/authority. Partnership A business entity formed by two or more persons (indefinite number) who bind themselves with the intention of dividing profits among themselves. Corporation A business entity formed by at least 5 to 15 incorporators each of whom must hold at least one share in the company. Domestic Subsidiary A corporation at least 51% owned by the parent company, and organized under Philippine Laws. Representative Office or liaison office deals directly with the clients of the parent company, does not derive income from the host country and is fully subsidized by its head office with limited activities: information dissemination and promotion of the company’s products as well as quality control of products. Branch Office of a foreign company carries out the business activities of the head office and derives income from the host country Regional Headquarters A multinational company engaged in international trading with regional headquarter in the country undertakes activities limited to acting as supervisory, communication and coordinating center exclusively for its subsidiaries, affiliates and branches in the Asia-Pacific Region and other foreign markets. Regional Operating Headquarters A multinational company engaged in international trading with Regional Operating Headquarter in the country render services exclusively to its subsidiaries, affiliates and branches in the Asia-Pacific Region and other foreign markets. 4.) What are the possible incentives schemes available for an investor?

A. Incentives offered under the Omnibus Investments Code of 1987 (E. O. 226):

1. Income Tax Holiday (ITH) a. Six (6) years for projects with pioneer status and for projects located in a Less Developed Area (LDA); b. Four (4) years for new projects with non-pioneer status; c. Three (3) years for expansion/ modernization projects

2. Duty exemption on imported capital equipment, spare parts, and accessories; 3. Exemption from wharfage dues and any export tax, duty impost and fees; 4. Tax exemption on breeding stocks and genetic materials; 5. Tax credit on imported raw materials

6. Tax and duty importation of consigned equipment; 7. Additional deduction for labor expense; 8. Employment of foreign nationals; 9. Simplification of customs procedures; 10. Access to bonded manufacturing warehouse. B. Other Incentives offered under Special Laws:

Renewable Energy Act of 2008 (R.A. No. 9513) 1. Income tax holiday (7 years); 2. Duty-free importation of RE machinery, equipment and materials; 3. Net Operating Loss Carry-Over (NOLCO); 4. Corporate tax rate of 10% after ITH; 5. Accelerated depreciation; 6. VAT-zero rate on sale of fuel or power generated; 7. Cash incentive for missionary electrification; 8. Tax exemption of carbon credits; 9. Tax credit on domestic capital equipment and services. Philippine Mining Act of 1995 (R.A. No. 7942) 1. Exemption from real property tax and other taxes or assessments of pollution control devices; 2. Income tax-carry forward of losses; 3. Income tax-accelerated depreciation Downstream Oil Industry Deregulation Act of 1998 (R.A. No. 8479) 1. Income Tax Holiday (5 years); 2. Additional deduction for labor expenses; 3. Minimum tax and duty of three percent (3%) and value-added tax (VAT) on imported capital equipment; 4. Tax credit on domestic capital equipment; 5. Exemption from contractor’s tax; 6. Unrestricted use of consigned equipment; 7. Exemption from the real property tax on production equipment or machineries; 8. Exemption from taxes and duties on imported spare parts. 9. Such other applicable incentives under Article 39 of Executive Order No. 226 Revised Forestry Reform Code of the of the Philippines (P.D. No. 705) Book Publishing Industry Development Act (R.A. No. 8047) Magna Carta for Disabled Persons (R.A. No. 7277) Tourism Act of 2009 (R.A. No. 9593) 5.) What are the protections to investments available to investors?

I. Per amended Omnibus Investments Code of 1987, all investors are entitled to the basic rights and guarantees provided in the Constitution. Among the other rights recognized by the Government of the Philippines are the following:

a.) Repatriation of Investment

Foreign investors have the right to repatriate the entire proceeds of the liquidation of the investment in the currency in which the investment was originally made at the exchange rate prevailing at the time of repatriation as long as it is registered with Bangko Sentral ng Pilipinas (BSP).

Bangko Sentral ng Pilipinas A Mabini St. cor. P. Ocampo St., Malate Manila, Philippines Landline: (+632) 708-7701 Email: bspmail@bsp.gov.ph

b.) Remittance of Earnings

In the case of foreign investments, investor has the right to remit earnings from the investments in the currency in which the investment was originally made and the exchange rate prevailing at the time of remittance.

c.) Foreign Loans and Contracts

Foreign investors have the right to remit, at the exchange rate prevailing at the time of remittance, such sums as may be necessary to meet the payment of interest and the principal on foreign loans and foreign obligations arising from technological assistance contracts.

d.) Freedom from Expropriation

There shall be no expropriation by the government of the property represented by the investments or of the property of enterprises except for public use or in the interest on national welfare and defense and upon payment of just compensation, In such cases, foreign investors or registered enterprises shall have the right to remit sums received as compensation the expropriated property in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance.

e.) Right to Requisition of Investment

There shall be no requisition of the property presented by the investment or of the property of enterprises, except in the event of war or national emergency and only for the duration. Just compensation for the requisitioned property may be remitted in the currency in which the investment was originally made and the exchange rate prevailing at the time of remittance

II. In addition, under the ASEAN Comprehensive Investment Agreement with other countries, investors are accorded the following, among others:

a.) Free Transaction of Capital

The Philippine allows all transfers to investment to be made freely and without delay into and out of its territory, subject to compliance with certain requirements imposed by laws and regulations.

b.) National Treatment

The Philippines treats all investments equally whether made by foreign or local investors to the extent allowed by Philippine laws.

c.) Fair and Equitable Treatments

The Philippines affords to investments fair and equitable treatment and full protection and security accordance with customary international law.