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Guidelines on Investing in the Philippines



Pursuant to Article 29 of the Omnibus Investment Code of 1987, the attached 2006 Investment Priorities Plan (IPP) is hereby approved.

This Memorandum Order shall take effect fifteen (15) days after its publication in at least one newspaper of general circulation as required under Article 31 of the Omnibus Investments Code of 1987.

Done in the City of Manila, this 4th of April in the year of Our Lord, Two Thousand and Six.

By the President :

Executive Secretary

Part I


The description/coverage and the entitlement to incentives of the following listed activities shall be defined and clarified in the General Policies and Specific Guidelines to be issued by the Board of Investments (BOI).

All projects with sovereign guarantee and/or guaranteed rate of return shall not be entitled to income tax holiday (ITH).

Industry Cluster and modernization activities as well as the establishment and operation of Centers of Excellence are applicable to all listed activities except when specifically excluded.


a. Agribusiness

This covers the commercial production and commercial processing of agricultural and fishery products including their by-products and wastes.

b. Healthcare and Wellness Products and Services

This covers hospital services, medical and dental services, other human health and wellness products/services, retirement villages, medical zones and related services. This also covers the manufacture of drugs and medicines in accordance with the Philippine Drug Formulary of the Department of Health (DOH) , supplements limited to Vitamin A, iron and iodine for use in the Food Fortification Law, and herbal medicines.

c. Information and Communications Technology

This covers IT AND IT-enabled services and ICT support services.

d. Electronics

This covers all segments within the value-chain structure of the industry such as Original Design Manufacturing (ODM), electronics manufacturing services (EMS), the manufacture of electronic products (except home appliances), IC designs, the manufacture of parts and components of electronic products including the inputs for the manufacturer of such components, and the manufacture of production supplies (e.g., molds and dies, precision tools, etc.) used by the electronics industry. This also covers the establishment of test and other services facilities.

e. Motor Vehicle Products

This covers the production and/or manufacture of motor vehicle parts and components, and manufacture or assembly of motor vehicles provided that the activity includes and program for the development of motor vehicle parts and components.

f. Energy

This covers the exploration, development, and/or utilization of energy sources. This also covers activities using energy technologies leading to energy efficiency and conservation in accordance with the program of the Department of Energy (DOE).

g. Infrastructure

This covers the development of infrastructures, telecommunications, logistics, transport systems and mass housing. This also covers infrastructure projects under the BOT Law.

h. Tourism

This covers the development of tourism economic zones, tourist estates, eco-agri tourism facilities, and the establishment of tourist accommodation facilities. This also covers historico-cultural heritage projects and services provided by tourist operators as endorsed by the Department of Tourism (DOT).

i. Shipbuilding/Shipping a

This covers shipbuilding, ship repair, shipyard operations (excluding shipbreaking), and overseas, domestic and RORO shipping and terminal operations.

j. Jewelry

This covers the manufacture of fine jewelry and costume jewelry.

k. Fashion Garments

This covers the production of fashion garments as endorsed by the Department of Trade and Industry (DTI). Fashion garments essentially refer to wearing apparel for a specific season with a distinct style and color based on international trends.

l. Machinery and equipment, raw materials and intermediate inputs in support of the activities listed in the IPP b

This covers the fabrication of machinery and equipment and the production/manufacture of raw materials and intermediate inputs in support of the activities listed in the IPP.

a. The establishment and operation of Centers of Excellence is limited only to Shipping.

b. Industry cluster and modernization activities as well as the establishment and operation of Centers of Excellence are limited only to the fabrication of Machinery and Equipment.


All areas/activities, which as provided for under existing laws, specifically require their inclusion in the IPP.


P.D. 705 Industrial Tree Plantation

R.A. 7103 Iron and Steel

R.A. 7942 Exploration, mining, quarrying, and processing of Minerals c

R.A. 8047 Publication or printing of books or textbooks d

R.A. 8479 Refining, storage, marketing and distribution of petroleum products e

R.A. 9003 Ecological Solid Waste Management e

R.A. 9275 Clean Water Act d

R.A. 7277 Rehabilitation, Self-Development and Self-Reliance of Disabled Persons

R.A. 6957 Build, Operated and Transfer Law as amended by R.A. 7718 (For projects in excess of PhP 1B e

Activities covered under Bilateral Agreements


This covers the production/manufacture of non-traditional export products and services in support of exporters as identified under the Medium-Term Philippine Development Plan 2004-2010 (MTPDP) or the Philippine Export Development Plan 2005-2007 (PEDP).

A. Manufacture of Export Products/Services

This covers the production/manufacture of non-traditional export products and services with capability to export at least 50% of its output, if Filipino-owned or at least 70%, if foreign-owned. To qualify for incentives, industrial goods for export should have undergone manufacturing; mineral products for exports should have undergone processing. Production of industrial goods involving simple processing covering any or a combination of activities such as but no limited to cleaning, sorting, cutting, shredding, pulverizing, grinding, crushing, compacting, dissolving and filtration are excluded.

c. Also covers cement manufacturing, which incentives shall be limited to those provided under E.O. 226.

d. Industry Cluster and the establishment and operation of Centers of Excellence are not applicable.

e. Industry Cluster is not applicable.

Exports of mineral products without processing shall not be entitled to ITH, e.g., mineral production without processing such as (i) quarrying and mining only (ii) mining of direct shipping ore, (iii), minor processing as cleaning, sorting or size reduction.

Export of recycled materials with no or with simple processing involving any or a combination of activities such as but not limited to cleaning, sorting, cutting, shredding, pulverizing, grinding, crushing, compacting, dissolving, and filtration shall not qualify for registration for purposes of incentives.

The BOI may, if national interest requires, withhold registration of an export product including industry inputs that are in short supply domestically.

B. Activities in Support to Exporters - this covers the following :

1. Services comprising a portion of the manufacturing process;

2. Sub-assembly of parts/components of the final export product;

3. Fabrication of parts/components of final products wherein the raw materials are provided by the direct exporter;

4. Product testing and inspection; and,

5. Repair and maintenance.


This covers activities of existing investors that are encouraged for retention, either to maintain, expand or diversify their operations in the country. Activities under the R.E.D. Program shall be subject to minimum investment requirements and other conditions as defined and clarified in the General Policies and Specific Guidelines to be issued by the BOI.

RETENTION projects are the existing activities that are encouraged for continued operation in the Philippines. Retention projects may only be granted non-fiscal incentives;

EXPANSION projects are existing activities that are encouraged to increase existing capacities within the country; and,

DIVERSIFICATION projects are new activities of existing investors that are distinct from existing operations.

Trading and other activities enumerated under Article 11 of E.O. 226 are excluded.


This refers to projects from other countries relocating to the Philippines that shall be subject to minimum investment requirements and other conditions as defined and clarified in the General Policies and Specific Guidelines to be issued by the BOI.

Trading and other activities enumerated under Article 11 of E.O. 226 are excluded.


The ARMM List covers priority activities, which have been independently identified by the Regional Board of Investments of the ARMM (RBOI-ARMM) in accordance with E.O. 458. The RBOI-ARMM can grant registration and administer incentives to activities in the IPP, provided these are located in ARMM and subject to the General Policies and Specific Guidelines.


1. Export Trader and Service Exporters

2. Support Activities for exporters


1. Processed Food

a. Production and processing of Halal Meat and Halal foods

b. Leguminous and other vegetable-based protein (textured, palletized or liquid)

c. Spices Processing (e.g., hot pepper, black pepper, ginger, etc.)

d. Note: May be integrated with plantation

e. Vegetable Oils (e.g. peanut oil, rice bran oil, sunflower and soybean oil)

f. Production of Food Crops

g. Note : Maybe integrated with post-harvest processing and other vegetables (such as Tomatoes)

h. Integrated Coconut Processing and plantation

i. Seaweeds Production and Processing

j. Cassave Processing and other root crops

k. Note : Maybe integrated with plantation

l. Fruit Processing (e.g. durian, mangosteen, jack fruit, marang, banana, mango, passion guava, calamansi, and guyabanos) and plantation

m. Aquaculture (Fish Production and Processing) such as, but not limited to :

· Frozen fish
· Chilled fish
· Canned fish
· Abalone
· Crab fattening
· Eel production
· Squid processing
· Carp and Tilapia Production and Processing
· Tropical Fish Production and Processing
· Shrimps/Prawn
· Lapu-lapu (Grouper) and other marine products

n. Corn Flour Mill (Integrated with plantation)

o. Young Corn Production

Note: May include processing/canning

p. Mushrooms Culture and Processing

q. Sweet Potato Plantation and Processing

r. Crocodile Farming and Processing

2. Cutflower Production

3. Pearl Culture and processing

4. Industrial Tree Plantation ( include Rubber, Rattan, Bamboo, etc.) and wood processing (cement wood board and fiberboard) reconstructed veneer

5. Shipbuilding/ Ship breaking/ Ship repair and Watercraft

6. Abaca Pulp Plantation and Processing

7. Palm Oil Plantation/Processing/refining and germinated oil palm seeds

8. Coffee Processing (Maybe integrated with plantation)

9. Particle Board (use of agri-based waste material such as rice straw, wood waste,etc.)

10. Activated Carbon Manufacturing (use of coconut shell,wood based,etc)

11. Feeds Production (animal feeds and feeds for aquaculture)

12. Tobacco Plantation and Processing

13. Production of Beverage Crops (but not limited to)

a. Cacao Beans

b. Coffee beans (Arabia variety)

14. Production of Plantation Crops and other Medical Herbs/Essential oil Plants (including flower extracts)

15. Production of Livestock and Poultry (including Dairy Products)

a. Beef (including cow-calf and feedlot operations)

b. Carabao (water buffalo) production

c. Goats and Sheep

d. Frozen semen and embryos

Note: includes natural method and artificial Insemination and embryo transfer technology

16. Bricks and Roofing Tiles production

17. Quality seeds and seedlings of fruit trees and other planting materials propagated asexually or by tissue culture

18. Sugarcane plantation, processing and Refineries

19. Sericulture

20. Mosquito oil processing


1. Pharmaceuticals
a. Antibiotics
· Penicillin
· Streptomycin
· Tetracycline
· Soft gelatin Capsule
b. Medical Devices
· Prosthetics
· Diagnostic
c. Other pharmaceuticals, herbal medicines
2. Textile and Textile Products
a. Yarns and fabrics
b. Hand-woven textiles
c. Specialty fabrics
d. Tires cord fabric

Note: Must be integrated with weaving and dipping units,

e. Ramie ( degumed, staple fiber, combed tops, noel slivers)
f. Fish nets
g. Fabrics made of indigenous raw materials
h. Silk reeling
3. Fertilizer ( organic and inorganic)
a. Solid waste materials
4. Mining (Exploration and development of Mineral Resources)
a. Mining and quarrying of Metallic and Non Metallic

Minerals (including small scale as defined under P.D. 1899, but to exclude river beds in operations)

b. Processing of Minerals (such as beneficiary and other Metallurgical methods)

5. Cement- At least 1.0 million MTPY capacity ( Clinker based)


1. Rubber Products such as:
a. High pressure and hydraulic rubber hoses
b. Rubber bolts
c. Industrial rubber rollers
d. Rubber tires
2. Leather Products


1. Public utilities (with developmental route of the five provinces and one city of the ARMM and other adjacent Cities and Provinces
a. Common Carriers (land, air and water transport facilities)
b. Electrical Transmission/ distribution
c. Water Supply Facilities/Waterways and sewerage systems
d. Buses/ cargo trucks
e. Other specialized mass transport system
f. Power generation like hydro power, Geothermal and natural gas

2. Telecommunication with International Gateways

3. Tourism

a. Tourism Estate

Subject to guidelines developed jointly by the Board of Investments-ARMM and Department of Tourism (DOT)

b. Tourist Accommodation Facilities

· Hotels
· Resorts
· Other tourist accommodation facilities such as apartel, pension houses, tourist inns, and others

c. Tourist Transport Facilities

· Air
· Water
· Tourist Buses and taxi/van

Note: Endorse by the DOT

New and expansion projects may be registered

4. Industrial Service Facilities

This will cover the following activities :

a. Common Centers

· Testing and Quality Control Laboratories
· Training and Demonstration Centers
· Tool Shops and Similar Facilities
· Metal casting
- Foundry
- Die casting
- Powder
· Metal working
- Die and mold
- Electroplating
- Forging
- Machining
- Heat Treatment
- Brass making
· Furniture
- Kiln Drying
-Treatment and processing facilities
· Ceramics
- Kiln
- Glazing
· Food Processing
- Bottling and Canning of Distilled Water
-Industrial salt
- Vapor Heat Treatment
- Slaughter house/abattoir
· Automotive Battery Plate Manufacturing

Note: The following criteria must be met

v The project will serve the common needs of the industry in the locality and;
v The project will improve the relative status and comparative advantages of the industry

b. Development of Retirement Villages

· Shall include Health and Medical facilities including amenities required by the Philippine Retirement Authority (PRA) .
· Subject to the guidelines to be approved by BOI-ARMM in consultation with the PRA, the Department of Health (DOH), the Regional Planning and Development Office and other concerned agencies.

5. Petrochemical Complex
6. Industrial Gases (such as oxygen and nitrogen)
7. Miscellaneous Chemical Products
a. Biotechnological/Biosynthetic Chemicals
b. Essential oils
c. Fine Chemicals


1. Engineering Products
a. Motor Vehicle parts and components
b. Automobile parts and assembly
c. Modern offset printing

2. Electronics and Telecommunication Products

Note : Listed below are potential tourist destination which need further exploration and evaluation for intensified promotions, development and marketing.

Nucleus Gateway Satellite Destination








Under Book I of the Omnibus Investments Code, an investor may enjoy
certain benefits and incentives, provided he invests in preferred areas of
investments found in the current Investment Priorities Plan (IPP).

The IPP, issued annually by the Board of Investments (BOI), is a list of promoted areas
of investments eligible for government incentives in consultation with related government agencies and private sector.

An enterprise may still be entitled to incentives even if the activity is not listed in the IPP
so long as:

1. at least 50% of production is for exports, if Filipino-owned enterprise,; and

2. at least 70% of production is for exports, if majority foreign-owned enterprise
(more than 40% foreign equity),

The BOI in certain instances as indicated in the IPP may completely or partially limit the
incentives available to export products.

Fiscal incentives include the following:

Income Tax Holiday
Exemption From Taxes And Duties On Imported Spare Parts
Exemption From Wharfage Dues And Export Tax, Duty, Impost And Fees
Tax Exemption On BreedingStocks And Genetic Materials
Tax Credits
Additional Deductions from Taxable Income.

A. Income Tax Holiday (ITH)

1. BOI-registered enterprise shall be exempt from the payment of income taxes reckoned from the scheduled start of commercial operations, as follows:

a. New projects with a pioneer status for six (6) years;
b. New projects with a non-pioneer status for four (4) years;
c. Expansion projects for three (3) years. As a general rule, exemption is limited to
incremental sales revenue/volume;
d. New or expansion projects in less developed areas (LDAs) for six (6) years regardless of status;
e. Modernization projects for three (3) years. As a general rule, exemption is limited to incremental sales revenue/volume.

2. The ITH is limited in the following cases:
Export traders may be entitled to the ITH only on their income derived from the following:

Export of new products, i.e. those which have not been exported in excess of US$100,000 in any of the two (2) years preceding the filing of application for registration, or
Export to new markets, i.e., to a country where there has been no recorded import of a specific export product in any of the two (2) years preceding the filing of the application for registration.

Mining Activities

The exploration and development of mineral resources are not entitled to an ITH;
Mining and/or quarrying without mineral processing is not entitled to an ITH;
Mining and processing of aggregates is not entitles to ITH.

3. New registered pioneer and non-pioneer enterprises and those located in LDAs may avail themselves of a bonus year in each of the following cases: the indigenous raw materials used in the manufacture of the registered product must at least be fifty percent (50%) of the total cost of raw materials for the preceding years prior to the extension unless the Board prescribes a higher percentage; or the ratio of total imported and domestic capital equipment to the number of workers for the project does not exceed US$10,000 to one (1) worker; or the net foreign exchange savings or earnings amount to at least US$500,000 annually during the first three (3) years of operation. In no case shall the registered pioneer firm avail of the ITH for a period exceeding eight (8) years.

B. Exemption From Taxes And Duties On Imported Spare Parts
A registered enterprise with a bonded manufacturing warehouse shall be 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.

C. Exemption From Wharfage Dues And Export Tax, Duty, Impost And Fees
All enterprises registered under the IPP will be given a ten (10) year period from the date of registration to avail of the exemption from wharfage dues and any export tax, impost and fees on its non-traditional export products.

D. Tax Exemption On BreedingStocks And Genetic Materials
Agricultural producers will be exempted from the payment of all taxes and duties on their importation of breeding stocks and genetic materials within ten (10) years from the date of registration or commercial operation.

E. Tax Credits

1. Tax credit on tax and duty portion of domestic breeding stocks and genetic materials. A tax credit equivalent to one hundred percent (100%) of the value of national internal revenue taxes and customs duties on local breeding stocks within ten (10) years from date of registration or commercial operation for agricultural producers.

2. Tax credit on raw materials and supplies A 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 shall be granted to a registered enterprise.

F. Additional Deductions from Taxable Income.

1. Additional deduction for labor expense (ADLE) For the first five (5) years from registration, a registered enterprise shall be allowed an additional deduction from taxable income equivalent to fifty percent (50%) of the wages of additional skilled and unskilled workers in the direct labor force. The incentive shall be granted only if the enterprise meets a prescribed capital to labor ratio and shall not be availed simultaneously with ITH. This additional deduction shall be doubled if the activity is located in an LDA.

2. Additional deduction for necessary and major infrastructure works. Registered enterprises locating in LDAs or in areas deficient in infrastructure, public utilities and other facilities may deduct from taxable income an amount equivalent to the expenses incurred in the development of necessary and major infrastructure works. The privilege, however, is not granted to mining and forestry-related projects as they would naturally be located in certain areas to be near their sources of raw materials.

Non-fiscal incentives are as follows:

Employment Of Foreign Nationals

A registered enterprise may be allowed to employ foreign nationals in supervisory, technical or advisory positions for five (5) years from 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.

Simplification of customs procedures for the importation of equipment, spare parts, raw materials and supplies and exports of processed products.

Importation of consigned equipment for a period of 10 years from date of registration, subject to posting of a re-export bond.

The privilege to operate a bonded manufacturing/trading warehouse subject to Customs rules and regulations.


Guidelines in the Filing of Application for Registration under Book 1 of the Omnibus Investments Code of 1987 Executive Order No. 226


A. An application is considered officially filed upon submission of the complete
set of documents (prescribed application form duly accomplished, project report
and such other documents which may be required and upon payment of the required
filing fee).

B. Required number of copies
1. For enterprises wishing to register with the Board of Investments:
i. Two (2) copies of BOI Application Form No. 501
ii. Two (2) copies of project report and supporting documents
2. For existing enterprises covered by rationalization, rehabilitation
and/or modernization programs:
Application requirement is to be determined on a sector by sector basis
at the time of implementing each program.


1. Filing Fees for Application for Registration

a) Book I
1. Project cost not exceeding P4 million.........................P 1,500.00
2. Project cost exceeding P4 million
but not over P20 million..............................................P 3,000.00
3. Project costs exceeding P20 million
but not over P50 million..............................................P 4,500.00
4. Project costs exceeding P50 million ......................... P 6,000.00

2. Fee for Certificate of Registration ..........................1/10 of 1% of project cost
but not less than P 3,000.00
and Not to exceed to P 15,000.00

* Additional P 10.00 per P.D. 200 as amended by P.D. 1856


1. Official filing of a duly accomplished BOI Form No. 501 complete with supporting
documents and payment of filing fee;
2. Evaluation of application and preparation of an evaluation report (including
Publication of Notice of Filing of Application, referral to the private sector
and plant visit, if necessary);
3. Presentation to the BOI Management Committee;
4. Confirmation by the BOI Executive Board;
5. Preparation of letter advising applicant of the Board Action
5.1 If approved, Industry Group prepares a letter of approval including
pre-registration requirements;
5.2 If denied, Industry Group sends denial letter;
6. If applicant requests for waiver on pre-registration requirements:
6.1 Industry Group prepares memorandum to the Board
6.2 Board Confirmation
6.2.1 If request is given due course, step no.8 takes place;
6.2.2 If request is denied, step no. 7 takes place;
7. Applicant complies with the pre-registration requirements;
8. Preparation and issuance of Certificate of Registration upon payment by applicant
of Registration Fee;
9. Release of Certificate of Registration.


1. Copy of Applicant's Articles of Incorporation/Partnership and By-Laws,SEC
Certificate of Registration;
For new project this maybe submitted as part of pre-registration requirements.
For existing project whose existing operation is registered with the Board,
this requirement is waived.

2. Copy of company Audited Financial Statements (AFS) and Income Tax Return (ITR)
for the past three (3) years or for the period the applicant has been in operation
if less than three (3) years.

For domestic existing and expanding projects whose existing operations are not
registered with the Board,this must be submitted, unless waived by the Board.

3. Copy of company's Board Resolution authorizing officer to sign in behalf of
applicant enterprise.
All applicants are required to submit this.

4. Project Report:
4.1 For activities listed in the IPP (New)
4.2 For activities listed in the IPP (Expansion, Different Product Line)
4.3 For activities listed in the IPP (Expansion, same Product Line)
4.4 Existing Projects Projection required may vary from one industry to another.
Please inquire with respective industry group.

NOTE: Proofs of financial capacity (Sworn Statement of Assets and Liabilities and
latest Income Tax Return) of Principal stockholder may be required only for
new projects and on a case-to-case basis.

Board Resolution No. 240 S. 91

WHEREAS, it has come to the attention of the Board that certain consultation, agents,
representatives of enterprises enjoying fiscal and non-fiscal incentives under investment
and investment-related laws have intentionally or through gross negligence committed acts
resulting in violations of the provisions of said investment laws and the implementing
rules thereof.

WHEREAS. Enterprises which have violated the terms and conditions of registration,
the provisions of their law or registration and the rules and regulations thereof have
invariably raised the defense that said violations were committed by their consultants,
agents or representatives; without their knowledge or consent.

NOW, THEREFORE, for and in consideration of the foregoing premises, the Board hereby
adopts the following resolution:

RESOLVED, as it is hereby RESOLVED that it is the policy of the Board to repress acts
of consultations,agents, representatives or other persons which tend to defraud the
government by blacking and/or disqualifying said consultants, agents or representatives
from further dealing with the BOI if they are found to have committed any of the
following acts:

a) Persuading, including or influencing any BOI staff to perform any act constituting
a violation of any investment related law and the rules and regulations and policies
duly promulgated by the Board;
b) Intentional or grossly negligent making of a material misstatement in the application
for registration or enjoyment of incentives under laws being implemented by the BOI;
c) Intentional or grossly negligent making of a material misstatement in the annual reports,
audited financial statements, income tax returns and/or other reports required to be
submitted to BOI;
d) Fraudulent tampering, falsification, and/or misrepresentation of any material fact
in any document required by the BOI to be submitted as supporting document in connection with or relative to the application for registration and/or application for enjoyment of incentives under any incentive law being implemented by BOI.

Provided, that nothing herein shall be construed as to exculpate any enterprises from any
liability or penalty for the violation of any provision of the investment laws and the terms
and conditions of its registration whether or not the violation thereof can be traced to the
enterprise itself or its consultant, agent or representative.



The Special Investor's Resident Visa (SIRV), issued pursuant to the provisions of the Omnibus Investments Code of 1987, as amended and these implementing rules and regulations, shall entitle the holder to reside in the Philippines for an indefinite period as long as the required qualifications and investments are maintained as provided for in Article 74 of the Code.

The visa when issued by the Philippine Embassy or Consulate shall be issued with the following notation: Special Investor's Resident Visa under the Omnibus Investments Code of 1987

For further information, please log on to www.boi.gov.ph

Board of Investments
385 Sen. Gil Puyat Ave., Makati City 1200, Philippines
Phone Number : (632) 890-9332 / 890-9303 / 890-3538 / 890-1332 / 895-3641
Fax Number : (632) 895-3512
E-mail :[email protected]


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