Investment Incentives under the Omnibus Investment Code of 1987 or Executive Order (EO) No.

226

The Omnibus Investment Code which is being implemented by the Board of Investments (BOI) provides for the comprehensive investment
incentives both for the local and foreign enterprises engaged in activities listed in the Preferred Areas of Investment under the government’s
Investment Priorities Plan (IPP). To qualify for the incentives such enterprise must be registered with the Board of Investments (BOI).

Qualification of a Registered
Enterprise
To be entitled to registration
under the IPP, an applicant must
satisfy the Board with the
following requirements:
1. If the applicant is a;
Natural Person
 He is a citizen of the
Philippines
Partnership
or any other association
 It is organized under
Philippine laws and that
at least sixty percent
(60%) of its capital is
owned and controlled by
citizens of the Philippines
Corporation/Cooperative
 It is organized under
Philippine laws; and
 At least sixty per cent
(60%) of the capital stock
outstanding and entitled
Preferred Areas of Investment
that may be entitled to
incentives
I. Preferred activities
1. All Qualified Manufacturing
Activities including Agro-
Processing
 Manufacture of industrial
goods and processing of
agricultural and fishery
products
 Manufacture of modular
housing components and
machinery and
equipment
2. Agriculture, Fishery and
Forestry
3. Strategic Services
 Integrated Circuits
Design
 Creative
Industries/Knowledge-
Based Services
 Maintenance, Repair,
and Overhaul (MRO) of
Aircraft
Incentives to Registered Basic Rights and Guarantees
Enterprise
I. Tax Incentives
a) Income tax holiday
 Pioneer Firms- income
tax exemption for six
years from the start of
commercial operations
 Non-pioneer firms- four
years from the start of
commercial operations
 Expanding firms - income
taxes exemption
proportionate to their
expansion for a period of
three years from the
start of commercial
operations of the
expansion.
The income tax holiday may be
extended for not more than eight
years.
 Right to repatriate the
entire proceeds of the
liquidation of the
investment
 Right to remit earnings
from the investment
 Right to remit at the
exchange rate prevailing
to meet principal and
interest
payments on foreign
obligations
 Freedom from
expropriation without
just compensation
 to vote is owned and
held by Philippine
nationals; and
 At least sixty per cent
(60%) of the members of
the Board of Directors
are citizens of the
Philippines.
Foreign Enterprise
 If it does not possess the
required degree of
ownership as mentioned
above by Philippine
nationals, the following
circumstances must be
satisfactorily established:
a) That it proposes to
engage in a pioneer
projects1 as defined in
Article 17 of this Code,
which, considering the
 Charging/Refueling
Stations for Alternative
Energy Vehicles
 Industrial Waste
Treatment
 Telecommunications
 State-of-the-art
Engineering,
Procurement, and
Construction
4. Healthcare Services including
Drug Rehabilitation Centers
5. Mass Housing (Development
of mass housing units based
on a price ceiling of
PhP2,000,000)
 Except for in-city low-
cost housing projects for
lease, only mass housing
projects outside Metro
b) Tax exemption
 Exemption from taxes
and duties on spare parts
and consumable supplies
imported by a registered
enterprise
 Exemption from taxes
and duties on machinery,
equipment, spare parts
and accessories imported
by new and expanding
registered enterprises
 Exemptions from taxes
and duties on the
importation of breeding
stocks and genetic
materials within 10 years
from the date of
registration or
commercial operation
 Exemption from
wharfage duties and any

1
"Pioneer enterprise" shall mean a registered enterprise (1) engaged in the manufacture, processing or production, and 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 or (2)
which 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 goods which is new and untried in the Philippines or (3) engaged 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 Board, in consultation with the appropriate
Department, 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 (4) which 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 or sources of energy in its production, manufacturing or processing
operations. Provided, That the final product in any of the foregoing instances, involves or will involve substantial use and processing of domestic raw materials,
whenever available; taking into account the risks and magnitude of investment: Provided, further, That the foregoing definitions shall not in any way limit the
rights and incentives granted to less-developed area enterprises provided under Title V, Book I, hereof.
 nature and extent of
capital requirements,
processes, technical skills
and relative business
risks involved, is in the
opinion of the Board of
such a nature that the
available measured
capacity thereof cannot
be readily and
adequately filled by
Philippine nationals; or, if
the applicant is exporting
at least seventy per cent
(70%) of is total
production, the export
requirement herein
provided may be reduced
in meritorious cases
under such conditions
and/or limited incentives
as the Board may
determine;
b) That it obligates itself to
attain the status of a
Philippine national, as
defined in Article 15,
within thirty (30) years
from the date of
registration or with such
longer period as the
Board may require taking
into account the export
Manila may qualify for export tax, duty, impost
registration. and fees on exports by a
registered enterprise of
6. Infrastructure and Logistics, its non-traditional export
including Local Government products
Unit Public-Private  Exemption from local
Partnership (LGU-PPP) taxes for six years from
Projects the date of registration
 Airports and seaports for pioneer enterprises,
 Air, land and water and four years for non-
transport pioneer enterprises
 Liquefied natural gas
(LNG) storage and
regasification facilities
 Pipeline projects for oil
and gas
 Bulk water treatment
and supply
 Training facilities
 Testing laboratories
 Domestic Industrial
Zones
 PPP projects
7. Innovation Drivers
 Research and
development (R&D)
activities
 Conduct of clinical trials
 Establishment of Centers
of Excellence, innovation
centers, business
incubation hubs and
fabrication
 potential of the project:
Provided, That a
registered enterprise
which exports one
hundred percent (100%)
of its total production
need not comply with
this requirement;
c) That the pioneer it will
engage in is one that is
not within the activities
reserved by the
Constitution or other
laws of the Philippines to
the Philippine citizens or
corporations owned and
controlled by Philippine
citizens;
2. The applicant is
proposing to engage in a
preferred project listed
or authorized in the
current Investment
Priorities Plan within a
reasonable time to be
fixed by the Board or,
if not so listed, at least
fifty percent (50%) of its
total production is for
export or it is an existing
producer which will
export part of production
laboratories/co-working
spaces
 Commercialization of
new and emerging
technologies and
products of the
Department of Science
and Technology (DOST)
or government-funded
R&D
8. Inclusive Business Models
 Business activities of
medium and large
enterprises (MLEs) in
agribusiness and tourism
sectors that provide
business opportunities to
micro and small
enterprises (MSEs) as
part of their value chains.
9. Environment or Climate
Change-Related Projects
 Manufacture/assembly
of goods and
establishment of energy
efficiency-related
facilities
 Green ship recycling
based on international
standards
 Establishment of
privately-owned
 under such conditions materials recovery
and/or limited incentives facility
as the Board may
determine; or that the 10. Energy
enterprise is engaged or  Power generation
proposing to engage in projects utilizing
the sale abroad of export conventional fuels
products bought by it
from one or more export II. Export activities
producers; or the
enterprise in engaged or 1. Production and manufacture
proposing to engage in of export products
rendering technical, 2. Services exports
professional or other 3. Activities in Support of
services or in exporting Exporters
television and motion
pictures and musical III. Special laws
recordings made or
produced in the 1. Industrial Tree Plantation
Philippines, either (Presidential Decree (PD) No.
directly or through a 705 – Revised Forestry Code
registered trader. of the Philippines)
2. Mining (Republic Act (RA) No.
3. The applicant is capable 7942 – Philippine Mining Act
of operating on a sound of 1995) - limited to capital
and efficient basis of equipment incentive
contributing to the 3. Publication or Printing of
national development of Books/Textbooks (RA No.
the preferred area in 8047 - Book Publishing
particular and of the Industry Development Act)
national economy in 4. Refining, Storage, Marketing
general; and and Distribution of
Petroleum Products (RA No.
8479 - Downstream Oil
4. If the applicant is Industry Deregulation Act of
engaged or proposes to 1998)
engage in undertakings 5. Rehabilitation, Self-
or activities other than Development and Self-
preferred projects, it has Reliance of Persons with
installed or undertakes to Disability (RA No.7277-
install an accounting Magna Carta for Persons with
system adequate to Disability)
identify the investments, 6. Renewable Energy (RA No.
revenues, costs, and 9513 – Renewable Energy Act
profits or losses of each of 2008)
preferred project 7. Tourism (RA No. 9593 –
undertaken by the Tourism Act of 2009)
enterprise separately
from the aggregate
investment, revenues, IV. ARMM list
costs and profits or
losses of the whole The 2017-2019 ARMM List
enterprise or to establish contains the following
a separate corporation priority investment areas:
for each preferred
project if the Board 1. Export Activities
should so require to 2. Agriculture, Agri-
facilitate proper business/Aquaculture and
implementation of this Fishery
Code. 3. Basic Industries
4. Infrastructure and Services
5. Industrial Service Facilities
6. Engineering Industries
7. Logistics
8. BIMP-EAGA Trade and
Investment Enterprises
9. Tourism
10. Health and Education
Services and Facilities
11. Halal Industry
12. Banking, Non-Bank Financial
Institutions and Facilities
13. Energy