Mandate

The Philippine Board of Investments (BOI) is an attached agency of the Department of

Trade and Industry in charge of investment regulation and promotion in the Philippines. The BOI
is responsible for encouraging both domestic and foreign investors to invest in desirable areas
of activities by formulating and implementing investment promotion strategies, as well as
supervising and administering investment incentives to registered enterprises.
Enabling Law

 Executive Order No. 226: The Omnibus Investments Code of 1987

 Signed by President Corazon Aquino on July 16, 1987
 Laid down policy for domestic and foreign investment, to be supervised by the
Board of Investments created under the Order.
Incumbent Chairman

 Ramon M. Lopez, DTI Secretary and BOI Chairman

Who can qualify for incentives under EO 226?

 Qualified proponents who will invest in priority areas of activity listed in the Investment
Priorities Plan (IPP) can qualify for incentives
What is the Investment Priorities Plan (IPP)?

 A plan prepared annually by the Board of Investments containing a listing of specific

activities that can qualify for incentives under the code.
 The priority areas include: preferred activities; export activities; special laws; and
BARMM list.
 The 2020 Investment Priorities Plan
o President Rodrigo Duterte, through Memorandum Order No. 50, has approved
the 2020 Investment Priorities Plan (IPP).
o Includes qualified activities relating to the Covid-19 pandemic response and the
“Balik Probinsya” program.
o Has a validity of three years (2020-2023) subject to annual review
What are the pioneer enterprises?
A preferred area of investments may be declared Pioneer if the activity:

 Involves the manufacturing or processing (not merely assembly or packaging) of goods

or raw materials that have not been produced in the Philippines on a commercial scale;
or
 Uses a design, formula, scheme, method, process or system of production or
transformation of any element or raw material or finished good which is new and untried;
or
 Engages in agricultural activities/services essential to the achievement of the country’s
self-sufficiency program; or
 Produces non-conventional fuels or manufactures equipment which utilize non-
conventional sources of energy; or
 Conforms to other specific criteria as provided for in the annually drawn investments
Priorities Plan

Incentives and Benefits of BOI Registration in the Philippines

Fiscal Incentives
Tax Exemption
1) Income Tax Holiday (ITH)
a) BOI registered enterprises shall be exempt from the payment of income tax
reckoned from the approved target or actual date of commercial operations,
whichever comes first, but in no case earlier than the date of registration, as
follows:
 Six (6) years for new projects granted pioneer status;
 Six (6) years for projects located in Less Developed Areas (LDAs),
regardless of status (pioneer or non-pioneer) or type of projects (new or
expansion);
 Four (4) years for new projects granted non-pioneer status; and
 Three (3) years for expansion and modernization projects. (As a general
rule, ITH shall be limited only to incremental sales given a specified base
year.)
b) New registered pioneer and non-pioneer enterprises, expansion enterprises
granted pioneer incentives and those located in LDAs may be granted one (1)
bonus year of ITH incentive for each of the following criterion:
 Capital Equipment to Labor Ratio Criterion
 Net Foreign Exchange Earnings/Savings Criterion
 Indigenous Raw Material Cost Criterion
In no case shall a registered firm avail of ITH for a period exceeding eight (8) years
2) Duty free importation of capital equipment, spare parts and accessories, subject to
conditions
 registered enterprise with a bonded manufacturing warehouse
  exempt from customs duties and national internal revenue taxes on its
importation of required supplies/spare parts for consigned equipment or those
imported with incentives
 availment period shall not exceed ten (10) years from date of registration.

3) Exemption from wharfage dues and export tax, duty, impost, and fees
 all enterprises registered under the IPP
 exemption from wharfage dues and any export tax, impost, and fees on its
non-traditional export products.
 ten (10) year period from the date of registration to avail the exemption
4) Tax and duty-free importation of breeding stocks and genetic materials
 agricultural production and processing projects
 exempt from the payment of all taxes and duties on their importation of
breeding stocks and genetic materials
 ten (10) years from the date of registration or commercial operations.
Tax Credits
1) Tax credit on the purchase of domestic breeding stocks and genetic materials
 tax credit equivalent to 100% of the value of national internal revenue taxes
and customs duties that would have been waived on the purchase of local
breeding stocks and genetic materials
 within ten (10) years from the date of registration or commercial operations.
2) Tax credit on raw materials and supplies
 Tax credit equivalent to the national internal revenue taxes and duties paid on
raw materials, supplies, and semi-manufactured products used in the
manufacture of export products and forming part thereof.
Additional Deductions from Taxable Income
1) Additional deduction for labor expense (ADLE)
 for the first five (5) years from date of registration
 additional deduction from taxable income equivalent to 50% of the wages of
additional skilled and unskilled workers in the direct labor force
 If activity is located in LDA: additional deduction shall be doubled or become
100%
o not granted to mining and forestry-related projects
2) Additional deduction for necessary and major infrastructure work
 registered enterprise locating in LDAs or in areas deficient in infrastructure
public utilities, and other facilities
 deduct from taxable income an amount equivalent to the expenses incurred
in the development of necessary and major infrastructure works
Non-Fiscal Incentives
1) Employment of Foreign Nationals
  allowed to employ foreign nationals in supervisory, technical, or advisory
positions for five (5) years from the date of registration for five (5) years from
the date of registration
 not subject to such limitation: position of president, general manager, and
treasurer of foreign-owned registered enterprises or their equivalent
2) Simplification of customs procedures for importation of equipment, spare parts, raw
materials, and supplies and exports of processed products
3) Importation of consigned equipment for a period of ten (10) years from the date of
registration, subject to posting of a re-export bond.
4) The privilege to operate a bonded manufacturing/trading warehouse subject to
Customs rules and regulations.

BOI Eligibility Requirements

Wholly Filipino-owned enterprises

Wholly Filipino-owned enterprises are eligible to register for BOI incentives if they
engage or propose to engage in an activity listed in the current IPP. They are allowed to engage
in any domestic-oriented activity included in the IPP regardless if it is classified as a pioneer
project or not.
Domestic foreign corporations (those that are 100% foreign-owned)
Domestic foreign corporations can avail of incentives if they engage in pioneer projects
and satisfy any of these qualifying requirements:

 at least 70% of services or products are for export, or

 proposed projects are to be undertaken in areas that are listed as less-developed
areas (LDAs) by the BOI
These enterprises are obliged to attain 60% Filipino ownership within thirty (30) years
from registration unless they export or are planning to export 100% of their production. For
enterprises that intend to engage in non-pioneer projects, foreign ownership is limited to 40%,
unless the enterprise will export more than 70% of its annual production.
Requirements for Registering with BOI
1. SEC Certificate of Registration – including Articles of Incorporation and By-Laws for
Domestic Corporations, Partnerships, Branch Offices, Representative Offices, and Regional
Headquarters; or DTI Certificate of Registration for Sole Proprietorships
2. Audited Financial Statement (feasibility report that contains projected financial reports for
the next five (5) years) and Income Tax Return (for the past three (3) years if applicable)
3. Board Resolution of a duly authorized company representative/signatory
4. Accomplished BOI Application Form 501 (has various versions per industry sector) and
Project Report (a report that contains activities listed or are related to those listed in the IPP)

BOI Registration Process

1. File BOI Application Form 501 along with supporting documents and filing fee
2. Prepare Evaluation Report (including Publication of Notice of Filing of Application and plant
visit)
3. Present to the BOI Management Committee
4. Receive confirmation and letter advice from the BOI Governing Board regarding Board
Action
5. Letter advice to Applicant of Board Action
6. If approved, send letter of approval and comply with pre-registration requirements
7. Pay Registration Fee
8. Secure Certificate of Registration from BOI
The usual processing time is ten (10) to twenty (20) working days – depending on the type
of business entity you plan to register, the nature of your proposed activities, and the time it
takes for BOI’s Management Committee to review your application.

BOI Inclusive Innovation Industrial Strategy