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Philippines
Prepared by Lex Mundi member firm,
Romulo Mabanta Buenaventura Sayoc &
De Los Angeles
This guide is part of the Lex Mundi Guides to Doing Business series which
provides general information about legal and business infrastructures in
jurisdictions around the world. View the complete series at:
www.lexmundi.com/GuidestoDoingBusiness.
www.lexmundi.com
A G UIDE TO
D OING B USINESS IN THE P HILIPPINES
1 Introduction 1
2 The Foreign Investments Act 2
3 Modes of Doing Business 3
Domestic Subsidiary 3
Branch 4
Representative Office 5
Regional or Area Headquarters 6
Regional Operating Headquarters 6
Joint Venture 7
Purchase of Shares in an Existing 7
Corporation
Merger or Consolidation 8
Technology Transfer Arrangement 9
Management Contract 10
4 Incentives to Foreign Investment 11
Board of Investments 11
Special Economic Zones 15
Incentives in Other Laws 17
5 Relevant Laws 19
Exchange Controls 19
Taxation 19
Labor 21
Immigration 22
Anti-trust 23
Intellectual Property 23
E-commerce 24
Product Liability 24
Firm Background 25
Annexes
2
of educated, highly trainable, creative, English-
speaking, computer- literate persons and continually
Chapter 1: improving infrastructure have all contributed to making
Introduction the Philippines an attractive business location which
assures foreign investors a profitable return on their
Legal system investments.
A GU I D E T O DO I N G BU S I N E S S I N T H E PH I L I P P I N E S
advertising and public utilities, which are reserved In further qualifying the activities which are deemed
for Philippine nationals by the mandate of the doing business in the Philippines, the Supreme Court
Constitution and specific laws. List B includes those recently ruled that activities within Philippine
areas which are either defense-related, requiring jurisdiction that do not create earnings or profits to the
prior clearance and authorization from the foreign corporation do not constitute doing business in
Department of National Defense, or with the Philippines. (Cargill, Inc. v. Intra Strata Assurance
implications on public health and morals. Corporation, G.R. No. 168266. 15 March 2010)
The FIA has also clarified what would constitute If it is foreseen that a foreign entitys acts would
doing business in the Philippines. The FIA defines constitute doing business in the Philippines, then it is
the act of "doing business" to include: necessary that such entity to be licensed to do
business in the Philippines. Otherwise, an entity doing
a. soliciting orders; business in the Philippines without a license would be
b. service contracts; denied the right to sue in Philippine courts, although
c. opening offices, whether called liaison they would be subject to suit in the Philippines. The
offices or branches; purpose of the law in requiring entities doing business
d. appointing representatives or distributors in the country be licensed to do so, is to subject such
domiciled in the Philippines who in any entities to the jurisdiction of Philippine courts.
calendar year stay in the country for a Otherwise, a foreign entity doing business here
period of one hundred eighty (180) days because of its refusal or neglect to obtain the required
or more; authority to do business may successfully though
e. participating in the management, unfairly plead such neglect or illegal act so as to avoid
supervision or control of any domestic service and impugn the jurisdiction of local courts.
business, firm, entity or corporation in the (Avon Insurance PLC v. Court of Appeals, 278 SCRA
Philippines; and 312 [1997]).
f. any other act or acts that imply a
continuity of commercial dealing or The term "doing business", however, excludes:
arrangements, and contemplate to that
extent the acts or works, or the exercise a. mere investment as a shareholder by a foreign
of some of the functions normally incident entity in domestic corporations duly registered to
to, and in progressive prosecution of, do business;
commercial gain, or the purpose and b. exercise of such rights as an investor;
object of the business organization.
c. having a nominee or officer to represent its Chapter 3: Modes of Investment
interests in such corporation; and
d. appointing a representative or distributor
In order to be granted authority to do business in the
domiciled in the Philippines which
Philippines, a foreign entity has several options
transacts business in its own name and
owing to the various allowable modes of foreign
for its own account.
investment. It is important to note that mode of
investment has its own requirements,
The Implementing Rules and Regulations of the Act characteristics and features that may either be
further exclude from the definition of "doing business" viewed as an advantage or disadvantage,
the following: depending on the investors business goals and
growth plan.
a. publication of a general advertisement
through any print or broadcast media
The common forms of business entities used by
b. maintaining a stock of goods in the
foreign companies are the following: domestic
Philippines solely for the purpose of
subsidiary; branch; representative office;
having the same processed by another
regional headquarters; or regional operating
entity in the Philippines;
headquarters. Other forms of investment may be
c. consignment by a foreign entity of
done through a joint venture; purchase of shares
equipment with a local company to be
in an existing domestic corporation; merger or
used in the processing of products for
consolidation; technology transfer
export;
arrangements; or through a management
d. collecting information in the Philippines;
Contract with a domestic corporation.
and
e. performing services auxiliary to an
existing isolated contract of sale which are The following is a summary of the basic information
not on a continuing basis. needed for the different modes of doing business:
[Note that the tax rates and registration fees subsidiary any portion of its expenses since the
indicated are those applicable as of the date of this subsidiary is a separate and distinct entity from the
publication and are subject to change] parent company.
Tax on Remittance of Dividends. The remittance A foreign corporation may set up a branch in the
of dividends by a subsidiary to its foreign "parent" Philippines by obtaining a license to transact
corporation is, generally, taxed at 30%. This, business. A branch is an extension of the foreign
however, may be reduced to 15% where the corporation (i.e., incorporated and existing under
country in which the foreign "parent" corporation foreign laws), but may engage in exactly the same
either: (a) grants a tax sparing credit of 15% or (b) activities as its parent company. However, existing
does not at all impose any tax on such dividends nationality requirements with respect to certain
received.. industries must be observed. [See Annex A]
Expenses. For purposes of taxation, the parent Since a branch office is a mere extension of its
company of a subsidiary cannot pass on to its parent corporation, the branch does not have a
personality separate and distinct from its parent connected with the conduct of its trade or
company. A branch office may, therefore, conclude business in the Philippines, such income when
sales contracts with local entities in its own name, remitted to the head office abroad shall not be
and in general, engage in income-producing considered as branch profits and no branch
activities in the same manner as its parent profits tax is further required to be paid.
company. Further, the parent corporation may be
held responsible for any liability of the branch in Expenses. For purposes of taxation of the
excess of its investment. income of the branch office, the parent foreign
corporation can allocate to its branch a
Capital Requirement. The required minimum proportional part of its expenses, losses, interest
assigned capital is Two Hundred Thousand US payments and similar expenses relating to the
Dollars (US$200,000.00) (Republic Act No. 8179). conduct of business in the Philippines.
This amount of required minimum assigned capital
may be reduced to One Hundred Thousand US Liabilities. A foreign corporation which does business
Dollars (US$100,000.00) if advanced technology as through a branch is liable for all damages and/or other
determined by the Philippine Department of Science liabilities which may be incurred by its branch.
and Technology is involved or the business directly Theoretically, the assets of the home office may be
employs at least fifty (50) employees. made to answer for the liabilities incurred by the
branch.
Taxes. Deposit of Securities. A branch is required by law
to deposit government securities with actual market
Corporate Income Tax Rate. A branch is value of at least One Hundred Thousand Philippine
taxed only on net income derived from Pesos (P 100,000.00) with the Securities and
Philippine sources at a rate of 30%. Exchange Commission (the "SEC"), within sixty (60)
days from the issuance of the SEC license to
transact business in the Philippines, and thereafter,
Minimum Corporate Income Tax. In lieu of the within six (6) months after each fiscal year of the
above-mentioned normal corporate income tax licensee, additional securities equivalent in market
rate, beginning the fourth (4th) year immediately value to two percent 2% of the amount by which the
following the year of the commencement of its gross income of the branch exceeds Five Million
operations, a branch will be subject to the Philippine Pesos (P5,000,000).
minimum corporate income tax (MC IT) of two
percent (2%) of gross income if such MCIT is Establishment and Registration Costs.
higher than the corporation's taxable income
computed using the 30% rate. The term gross a. Filing Fee: Equivalent to 1% of the actual
income is defined as (i) gross sales less sales inward remittance of the branch converted
returns, discounts and allowances and cost of into Philippine currency but not less than
goods sold, or (ii) gross receipts less sales P2,000.00.
returns, allowances, discounts and cost of
services. Any excess MCIT over the normal b. Legal research fee: 1% of the filing fee,
corporate income tax may be carried forward for but not less than Ten Philippines Pesos
the three (3) immediately succeeding taxable (P10.00);
years and credited against the normal corporate
income tax. The Secretary of Finance may c. For applications under the Foreign
suspend the imposition of the MCIT on any Investments Act: Additional Two
corporation which suffers losses on account of Thousand Philippine Pesos (P2,000.00)
prolonged labor dispute, because of force for applications under the Foreign
majeure, or because of legitimate business Investments Act; and
reverses.
d. Others: Minimal amount of fees for post
Tax on Branch Profit Remittance. The incorporation government permits such as
remittance of profits made by a branch to its head the mayor's permit, tax identification
office is subject to a tax of 15%, which shall be number, Value Added Tax and
based on the total profits applied or earmarked Withholding Tax Agent's Registration if
for remittance without any deduction for the tax applicable, BIR registration of books of
component thereof (except those activities which account.
are registered with the Philippine Economic Zone
Authority). However, if the branch receives C. Representative Office
income in the form of dividends, interest or
rentals, among others, which are not effectively A representative office promotes the products and/or
services of the Company it represents, but cannot Establishment and Registration Costs.
conclude contracts with local entities on behalf of its
parent Company. Such contracts must be directly a. Filing Fee: Equivalent to l/10 of 1% of the actual
entered into between the Company head office and inward remittance of the Company converted into
the local entity. Its activities are limited to the Philippine currency, but not less than Two
promotion and dissemination of information about Thousand Philippines Pesos (P2,000.00);
the Company's products and/or services.
b. Legal research fee: 1% of the filing fee, but not
By the nature of the activities allowed of a less than Ten Philippines Pesos (P1 0.00); and
representative office, it cannot derive income from
the Philippines. The test of whether an office is a c. Other Fees: Minimal amount of fees for post
representative office or not, is whether it derives incorporation government permits such as the
income from its operations. mayor's permit, tax identification number,
Bureau of Internal Revenue ("BIR")
Some of the acceptable activities of a representative registration, and registration of books of account
office are the following: and Certificate of Registration with the
a) dissemination of foreign market Department of Trade and Industry.
information;
b) promotion for export of Philippine products D. Regional or Area Headquarters
specially nontraditional products;
c) acting as a message centre or a The Regional or Area Headquarters of a
communication centre between interested multinational company is an administrative branch
parties and the head office; which principally acts as a supervision,
d) promotion of products presently being communications and coordination center for the
distributed in the Philippines; subsidiaries, branches or affiliates of a multinational
e) to render, assist and give technical know- company in the Asia-Pacific Region. It is not allowed
how and training to existing and future to do business or earn income from the host country,
customers of the Company's products; unlike a branch or subsidiary. Neither does it deal
f) to provide and facilitate better directly with the clients of the parent company,
communication and contact between its unlike a representative office, when it undertakes
head office and affiliated companies on one such activities as information dissemination and
hand and present and future customers on promotion of the company's products for export.
the other;
g) to inform potential customers of price Capital Requirement. The required minimum capital
quotations of the head office and affiliated is the amount of not less than Fifty Thousand US
companies; Dollars (US$50,000) or its equivalent in acceptable
h) to conduct and make surveys and studies of foreign currency.
the market, economic and financial
conditions in the Philippines; and Taxes. It will not be subject to income tax provided it
i) attend to the needs of end-users of its will not earn or derive income from the Philippines
products in the Philippines, advising them on and merely act as a supervisory, coordination and
the proper care and maintenance of their communication center for its affiliates, subsidiaries
equipment and to communicate to its head or branches in the Asia-Pacific Region and other
office problems that call for consultations. foreign markets. It is also exempted from the value-
added tax, local licenses, fees and dues, duties on
Capital Requirement. The amount initially to be importation of training materials
remitted is at least Thirty Thousand US Dollars
(US$30,000.00). Expenses. All its expenses are financed by the
head office or parent company. The foreign firm
Taxes. A representative office has no income from should remit into the Philippines the entire amount
operations and, therefore, has no income tax liability. necessary to cover the operations of its Regional
Headquarters in the Philippines but not less than
Expenses. No allocation can be made to the Fifty Thousand US Dollars ($50,000.00) annually or
representative office since the representative office its equivalent in acceptable foreign currencies.
obtains no income from the Philippines with which to
offset the expenses. All funds of the Regional Headquarters shall be
utilized for salaries and other emoluments, including
Deposit Of Securities. No deposit of securities fringe benefits of personnel, rental of offices,
with any entity is required. transportation expenses, communication fees and
similar costs for the maintenance of the regional
headquarters in the Philippines. Tax on Branch Profit Remittances. Any
income derived from Philippine sources by the
Liabilities. Its liabilities, like its expenses, are to be regional operating headquarters when remitted
shouldered by the Parent Company. to the parent company shall be subject to the
tax on branch profit remittances of 15% which
Deposit of Securities. No deposit of securities shall be based on the total profits applied or
with any entity is required. earmarked for remittance without any deduction
for the tax component thereof (except those
Establishment and Registration Costs. activities which are registered with the
a. Filing fee: Five Thousand Philippine Philippine Economic Zone Authority).
Pesos (P5,000.00); and
Expenses. Assuming that it is earning income
b. Legal research fee: 1% of the filing fee, but from its operations as a regional operating
not less than Ten Philippine Pesos (P1 0.00); headquarters, income from such operations shall
and finance the regional operating headquarters.
However, if there is no sufficient income, its
c. Board of Investments requirement of expenses may be financed by the multinational
annual inward remittance: at least Fifty company.
Thousand U.S. Dollars (US$50,000.00) for
operating expenses. Liabilities. Its liabilities, like its expenses, are to be
shouldered by the multinational company.
E. Regional Operating Headquarters
Deposit of Securities. No deposit of securities
A regional operating headquarters of a multinational with any entity is required.
company is a branch office established in the
Philippines engaged in any one of the following Establishment and Registration Costs.
services: general administration and planning;
business planning and coordination; sourcing and a. Filing fee: 1% of the actual remittance,
procurement of raw materials and components; but not less than 1% of the Philippine
corporate finance advisory services; marketing control currency equivalent of Two Hundred
and sales promotion; training and personnel Thousand US Dollars (US$200,000.00);
management; logistic services; research and and
development services and product development;
technical support and maintenance; data processing b. Legal research fee: 1% of the filing fee,
and communication; and business development. It but not less than Ten Philippine Pesos (P
refers to a foreign business entity which is allowed to 10.00).
derive income in the Philippines by performing
qualifying services to its affiliates, subsidiaries or F. Joint Venture
branches in the Philippines, in the Asia-Pacific Region
and in other foreign markets. A foreign corporation can enter into a joint venture
with a domestic corporation by forming a domestic
Regional operating headquarters are prohibited from corporation. A joint venture means a cooperative
offering qualifying services to entities other than their arrangement of corporations, whether foreign or
affiliates, branches or subsidiaries, as declared in their domestic, to jointly perform a single, specific
registration with the Securities and Exchange undertaking or project with each of the partners
Commission nor shall they be allowed to directly and contributing to the performance. However, existing
indirectly solicit or market goods and services whether nationality requirements with respect to certain
on behalf of their mother company, branches, industries must be observed. (See Table A)
affiliates, subsidiaries or any other company.
Capital Requirement. If foreign interest exceeds forty
Capital Requirement. The required minimum capital percent (40%) of the outstanding capital stock of the
is the amount of not less than Two Hundred Thousand joint venture corporation, the required minimum paid-
US Dollars (US$200,000) or its equivalent in up capital is Two Hundred Thousand US Dollars
acceptable foreign currency. (US$200,000.00). (Republic Act No. 8179). This
amount of required minimum paid-up capital may be
Taxes. reduced to One Hundred Thousand US Dollars (US$
100,000-00) if advanced technology as determined by
Tax on Income of ROHQ. Regional operating the Philippine Department of Science and Technology
headquarters shall pay a tax of ten percent (10%) is involved or the business directly employs at least
of their taxable income. fifty (50) employees. The minimum paid up capital of
US$200,000.00 does not apply to enterprises that of the value of the stock sold, regardless of any
export sixty percent (60%) or more of its output or gain or loss.
domestic purchases.
Tax-Free Exchanges. Where a person
Taxes. exchanges his property for stock in a
Corporate Income Tax. The joint venture corporation resulting in that person alone, or
company is taxed on income derived from together with others, not exceeding four,
sources within and without the Philippines at the gaining control of the corporation, it is
rate of 30%, or the MCIT, whichever is higher. considered a tax-free exchange.
Tax on Dividends. The foreign corporation Tax on Dividends. The foreign corporation
holding shares of stock in the joint venture holding shares of stock in the domestic
company, shall be considered as a non-resident corporation, shall be considered as a non-resident
foreign corporation not doing business in the foreign corporation not doing business in the
Philippines. Dividends received by such foreign Philippines. Dividends received by such foreign
corporation are generally taxed at 30%. This, corporation are generally taxed at 30%. This,
however, may be reduced to 15% where the however, may be reduced to 15% where the
country in which the non-resident foreign country in which the non-resident foreign
corporation is domiciled either: (a) grants a tax corporation is domiciled either: (a) grants a tax
sparing credit of 15%, or (b) does not at all sparing credit of 15%, or (b) does not at all impose
impose any tax on such dividends received. any tax on such dividends received.
A tax sparing credit is granted when the laws of Deposit of Securities. No deposit of securities
the country of domicile of the foreign parent with any entity is required.
corporation consider the parent corporation to
have paid the difference between the normal and Establishment and Registration Costs.
the preferential rates. This may also be available
if there exists a tax treaty between the country of For Original Issues of Shares. A documentary
the foreign parent corporation and the stamp tax equivalent to One Philippine Peso
Philippines. Likewise, the reduced rate of 15% is (P1.00) on each Two Hundred Philippine Pesos
applied when the laws of the country of domicile (P200.00) or fractional part thereof, of the par
of the foreign parent corporation do not tax at all value, of such shares of stock shall be collected on
any dividends received original issues of shares.
Liabilities. The surviving or newly-formed f. Others: Minimal amount of fees for post
corporation formed bears the liabilities. incorporation government permits such as
the mayor's permit, tax identification number,
Deposit of Securities. No deposit of securities with Value Added Tax and Withholding Tax
any entity is required. Agent's Registration if applicable, BIR
registration of books of account and
Establishment and Registration Costs. The articles Certificate of Registration with the Bureau of
of merger or consolidation must be submitted to the Domestic Trade.
SEC for approval and issuance of the certificate of
merger or consolidation. The following must be paid: I. Technology Transfer Arrangement
a. Filing Fee: 1/5 of 1% of the equity of the A foreign corporation may enter into a technology
absorbed corporation/s, but not less than transfer arrangement. Technology Transfer
Three Thousand Philippine Pesos Arrangements refer to contracts or agreements
(P3,000.00). entered into involving the:
i. In merger: in case of simultaneous
filing of application for Increase of a. transfer of systematic knowledge for the
the Authorized Capital Stock by the manufacture of a product or the
surviving corporation, the filing fee application of a process;
for increase in capital stock (1/5 of
1% of the increase in capital stock or b. rendering of a service, including
the subscription price of the management contracts;
subscribed capital stock whichever is c. transfer, assignment or licensing of all forms
higher, but not less than One of intellectual property rights, including
Thousand Philippine Pesos licensing of computer software, except
[P1,000.00]) or the filing fee for computer software developed for mass
Merger (Filing fee of 1/5 of 1% of the market. (Sec. 4.2, Intellectual Property
equity of the absorbed corporation/s, Code).
but not less than Three Thousand
Philippine Pesos [P3,000.00]) Provisions of technology transfer contracts should not
whichever is higher; have adverse effects on competition and trade, must
provide for effective quality control by the licensor
ii. In consolidation: where the total over the product or service covered by the contract,
equity of the constituent corporations and must allow continued access to improvements in
is different from the authorized the transferred technology.
capital stock of the consolidated
Technology transfer agreements are no longer Domestic enterprises engaging in wholly or partially
required to be registered with the Documentation, nationalized activities cannot enter into a management
Information, and Technology Transfer Bureau if they contract with a foreign corporation.
comply with the provisions of, and/or include the
stipulations/ conditions required by Sections 87 and 88 Taxes. The foreign corporation shall be subject to
of the Intellectual Property Code. Otherwise, the 30% income tax rate, as a foreign corporation doing
agreements will be considered unenforceable. Non- business in the Philippines (that is, a branch), or the
complying agreements, however, may be allowed MCIT, whichever is higher.
registration under exceptional circumstances provided
in Section 91. Expenses. The foreign corporation shall be liable for
its own expenses and not for the expenses of the
Taxes. Taxes shall be imposed upon the royalty domestic corporation.
payments received by the foreign corporation entering
into the Technology Transfer Arrangement. A foreign Liabilities. The foreign corporation will bear its own
corporation not doing business in the Philippines shall liabilities. It is shielded from the risk of the failure of
generally pay a tax equivalent to 30% of the gross the domestic corporation.
income received during the year from all sources
within the Philippines, royalty payments being included Deposit of Securities. No deposit of securities with
therein. This tax may be pared down to as low as any entity is required.
10%, depending on whether or not there is an existing
tax treaty between the Philippines and another state of Establishment and Registration Costs. This is a
which the foreign corporation is a resident, as defined private contract. There will be no filing, license or
in the tax treaty. registration fees due. However, the existence of the
The royalties shall likewise be subject to a value- management contract must be disclosed.
added tax to be withheld by the payor of such
royalties. At present, the rate of the value-added tax is
twelve percent (12%).
Chapter 4: Incentives to Foreign
Expenses. No allocation of expenses can be made Investment
since there is no local entity deriving income from the
Philippines. I. Board of Investments
Liabilities. The foreign corporation is shielded from the The Omnibus Investment Code of 1987 is the general
risk of failure of the domestic corporation. It does not law that provides the most comprehensive listing of
assume the risk that the domestic corporation might incentives available to qualified business enterprises.
fail. Even if the domestic corporation is not profitable, Under the Omnibus Investment Code, the Board of
it would have to pay royalties for the technology being Investments (BOI) publishes an annual Investment
supplied to it. Deposit of Securities. No deposit of Priorities Plan (IPP) which contains a list of promoted
securities with any entity is required. areas of investments eligible for government
incentives.
Establishment and Registration Costs. The
following are costs to be incurred by the Licensee in The 2010 IPP [See Annex B] was formulated to
cases where technology transfer arrangements are to generate more investments and more jobs in the
be registered with the Intellectual Property Office agriculture, industry and services sectors that are
(IPO): geared up to optimize the opportunities from the
Filing fee: Two Thousand Five Hundred Philippine global economic recovery and the implementation of
Pesos (P2,500.) plus 1% legal research fund paid to international engagements.. Its theme, Maximizing
the Intellectual Property Office ; and Opportunities of a Stronger Philippine Economy,
Registration fee: Two Thousand Five Hundred reflects the strategic solutions and programs to sustain
Philippine Pesos (P2,500.) plus 1% legal research a strong and responsive republic that the
fund. administration advocates. It is also made more
significant as it promotes investments in green
J. Management Contract business initiatives that also address the climte
change challenge towards a Green Philippines.
A foreign corporation may also choose to enter into a
management contract with a domestic corporation. Like previous IPPs, the 2010 IPP continues to support
Under a management contract, the foreign corporation globally competitive economic activities, build up the
shall undertake to manage all or substantially all of the capabilities of small and medium enterprises (SME) to
business of a domestic corporation. It may be entered generate jobs, provide food, deliver basic services,
into for a period of only five years for any one term. and spur countryside development. In its bid to meet
the demands of globalization and trade liberalization, Qualification for BOI Incentives:
the 2005 IPP presents a list of priority economic
activities that address the challenges of building a To qualify for the incentives, an enterprise intending to
strong republic. It also enhances the scope and engage in a preferred area of investment listed in the
coverage of some areas, in support of the programs of current IPP must be registered with the BOI. The
other government agencies. enterprises applying must either be owned by a citizen
of the Philippines or be a juridical entity sixty percent
The 2005 IPP classifies Priority Investment Areas (60%) of whose capital is owned or controlled by
under the following: Preferred Activities, , citizens of the Philippines. If the applicant is a
Mandatory List, Export Activities and the ARMM corporation, sixty percent (60%) of the capital stock
List. outstanding and entitled to vote must be owned by
Philippine nationals, as defined in the law, and at least
The Preferred Activities is divided into a sixty percent (60%) of the board of directors must be
Contingency List and the Regular List. The Filipino citizens. The ownership percentage is waived
Contingency List is unique in the 2010 FIA, as it under the following conditions:
covers existing projects and/or activities
affected by the global economic crisis that will at a. the enterprise proposes to engage in a
least retain investments or increase its current pioneer project which is not among the
number of workers. The Contingency List also areas reserved by the Constitution and
covers new projects of micro and small the laws of the Philippines for Philippine
enterprises. Enterprises registered under this citizens or corporations wholly owned and
list may be entitled to an Income Tax Holiday. controlled by such citizens; or
Other Preferred Activities covers other export Yet, even if the enterprise is not engaged in an area of
activities, industry cluster, and modernization activity listed under the IPP, the enterprise may still
activities. qualify for incentives so long as: (1) (if Filipino-owned)
Mandatory Inclusions covers all areas or activities at least fifty percent (50%) of its production is for
where the inclusion in the IPP and/or the grant of exports, or (2) (if a majority foreign owned
incentives under the Omnibus Investments Code is enterprise) at least seventy percent (70%) of its
mandated by law. New laws which require inclusion production is for exports.
in the list include the Renewable Energy Act of 2008
and the Tourism Act of 2009. A. Fiscal Incentives
Export Activities covers (i) manufacture of export Pursuant to Book I of the Omnibus Investments
products; (ii) export services, and (iii) activities in Code, BOI registered enterprises are given a
support of exporters. number of incentives in the form of tax exemptions
and concessions. These include:
The ARMM List covers priority areas determined by the
regional Board of Investments (RBOI) of the 1. Income Tax Holiday (ITH)
Autonomous Region of Muslim Mindanao (ARMM) in
accordance with E.O. 458. Economic activities listed in a) BOI registered enterprises shall be exempt
the ARMM shall be entitled to incentives only when from the payment of income taxes reckoned
said activities are undertaken within the ARMM region. from the scheduled start of commercial
operations as follows:
i. New projects with a pioneer status: for six application for registration, or
(6) years; b) Export to new markets, i.e., to a
ii. New projects with a non-pioneer status: country where there has been no
for four (4) years; recorded import of a specific export
iii. Expansion projects: for three (3) years. As a product in any of the two (2) years
general rule, exemption is limited to preceding the filing of the
incremental sales revenue/ volume; application for registration.
iv. New or expansion projects in less
developed areas: for six (6) years, ii. Mining Activities
regardless of status; and
v. Modernization projects: for three (3) Under the 2010 IPP, mining activities are
years. As a general rule, exemption is entitled to the ITH only in certain cases:
limited to incremental sales revenue/
volume. a) Exploration and development of
mineral resources including those
b) Criteria for Additional Period of Availment: covered by mineral agreements
may qualify for pioneer status.
For new registered firms, the Income Tax Holiday However, these activities are not
incentive may be extended for an extra year for each entitled to Income Tax Holiday
of the following cases, but in no case to exceed the (ITH).
total period of eight (8) years for pioneer registered
enterprises: b) For mining, quarrying and
processing of metallic and non-
i. If the ratio of the total imported and domestic metallic minerals (except those
capital equipment to the number of workers involving riverbed operations, cave
for the project does not exceed US$10,000 to mining and beach mining):
one (1) worker.
(1) Mining and/or quarrying
ii. It the average cost of indigenous raw integrated with mineral
materials used in the manufacture of the processing* (e.g., flotation)
registered product is at least fifty (50%) shall be entitled to ITH.
percent of the total cost of raw materials for Production of direct shipping
the preceding years prior to the extension ore is not entitled to ITH.
unless the Board (BOI) prescribes a higher (2) Mineral processing* without
percentage. mining or quarrying shall be
entitled to full incentives.
iii. If the net foreign exchange savings or (3) Mining and processing of
earnings amount to at least US$500,000.00 aggregates is not entitled to
annually during the first three (3) years of ITH.
operation to be determined by the Board (4) Marble processing projects,
(BOI) at the end of such three-year period: whether or not integrated with
Provided, That the foreign exchange savings mining and quarrying, must
criterion shall apply as a general rule, to export at least fifty percent
registered firms whose products are totally (50%) of production, if Filipino-
imported into the country at the time of owned or at least seventy
registration percent (70%), if foreign-
owned.
and duly indicated as imports substituting in (5) Mineral processing projects
the firm's certificate of registration. must locate outside the
National Capital Region.
c) The income tax holiday is limited in the following
cases: Note: *Simple processing such as sorting,
crushing, washing, drying and other similar
i. Export traders may be entitled to the ITH activities, is not entitled to ITH. Provided
only on their income derived from the that reduction to powder/granular size (e.g.
following: grinding), classification and/or chemical
a) Export of new products, i.e., those washing/scrubbing of non-metallic minerals
which have not been exported in may be granted ITH.
excess of US$100,000 in any of the
two (2) years preceding the filing of
Projects of foreign-owned corporations with availed simultaneously with ITH. This additional
approved Financial or Technical Assistance deduction shall be doubled if the activity is located in
Agreements (FTAAs) or Mineral Processing an LDA.
Permits (MPPs) are qualified for pioneer
status, with full ITH incentive. Provided 8) Additional deduction for necessary and major
further, that FTAA and MPP projects infrastructure works.
covered under Art. 17, Title 1 of E.O. 226,
as amended, or located in less-developed Registered enterprises locating in LDAs or in areas
areas shall be granted full incentives. deficient in infrastructure, public utilities and other
facilities may deduct from taxable income an amount
2) Exemption from taxes and duties on imported equivalent to the expenses incurred in the
spare parts development of necessary and major infrastructure
works. This privilege, however, is not granted to
A registered enterprise with a bonded mining and forestry-re late d projects as they would
manufacturing warehouse shall be exempt from naturally be located in certain areas to be near their
customs duties and national internal revenue taxes sources of raw materials.
on its importation of required supplies/spare parts for
consigned equipment or those imported with B. Non-fiscal Incentives
incentives.
All investors and enterprises are entitled to the basic
3) Exemption from wharfage dues and export rights and guarantees provided in the Philippine
tax, duty, impost and fees. Constitution. Among other rights recognized by the
government of the Philippines are the following:
All enterprises registered under the IPP will be given
a ten-year period from date of registration to avail of a. the right to repatriate the entire proceeds of the
the exemption from wharfage dues and any export liquidation of the investments in the currency in which
tax, impost and fees on its non-traditional export the investment was originally made at the exchange
products. rate prevailing at the time of repatriation;
4) Tax exemption for agricultural producers of Note that foreign investments duly
breeding stocks and genetic materials within ten registered with the Bangko Sentral ng
(10) years from the date of registration or commercial Pilipinas (BSP) shall be entitled to full
operation. and immediate capital
repatriation and dividends and profit
5) Tax credit on tax and duty portion of domestic remittance privileges without prior BSP
breeding stocks and genetic materials. approval.
A tax credit equivalent to one hundred percent b. the right to remit, at the exchange rate prevailing at
(100%) of the value of national internal revenue the time of remittance, such as may be necessary
taxes and customs duties on local breeding stocks to meet the payment of interest and the principal on
within ten (10) years from date of registration or foreign loans and foreign obligations arising from
commercial operation for agricultural producers. technological assistance contracts;
6) Tax credit on raw materials and supplies. Note that upon presentation of the
Bangko Sentral Registration Document
A tax credit equivalent to the national internal revenue (as proof that the foreign investment
taxes and duties on raw materials, supplies and semi- was duly registered with the BSP) with
manufactured products used in the manufacture of authorized agent banks (AABs), an
export products and forming part thereof shall be investor may buy and remit the
granted to a registered enterprise. equivalent foreign exchange at the
exchange rate at the time of actual
7) Additional deduction for labor expense. remittance, to remit sales, divestment
proceeds or dividends, or profit.
For the first five (5) years from registration, a
registered enterprise shall be allowed an additional c. protection from expropriation of property
deduction from taxable income equivalent to fifty represented by investments, except for public use or
percent (50%) of the wages of additional skilled and in the interest of national welfare and defense and
unskilled workers in the direct labor force. This only upon payment of just compensation, which may
incentive shall be granted only if the enterprise meets be remitted in the currency in which the investment
a prescribed capital to labor ratio and shall not be was originally made and at the exchange rate
prevailing at the time of remittance; project (new or expansion).
2. Additional deductions from taxable income
d. protection from requisition of property equivalent to 100% of expenses incurred in the
represented by the investment, except in the event of development of necessary and major
war or national emergency and only upon payment of infrastructure facilities.
just compensation, which may be remitted in the
currency in which the investment was originally made D. Incentives for Regional Headquarters (RHQs)
and at the exchange rate prevailing at the time of and Regional Operating Headquarters
remittance;
The applicable taxes and incentives available to
Other non-fiscal incentives provided under the RHQs and ROHQs are:
Omnibus Investments Code include:
Corporate Income Tax and VAT
a. Employment of foreign nationals in RHQs are exempt from income tax and VAT,
supervisory, technical or advisory positions for while their purchase of goods and services
five (5) years from date of registration, The and lease of goods and property are zero-
position of president, general manager and rated.
treasurer of foreign-owned registered enterprises
or their equivalent shall however not be subject to ROHQs enjoy a 10% preferential rate on
the foregoing limitations. taxable income, are subject to 12% VAT,
and shall pay branch profit taxes if it remits
Foreign nationals under employment contract income derived from Philippine sources.
within the purview of this incentive, their spouses
and unmarried children under twenty-one (21) 2. RHQs and ROHQs are granted the
years of age, who are not excluded by Section 29 following incentives:
of Commonwealth Act Numbered 613, as
amended, shall be permitted to enter and reside a. Exemption from all kinds of local
in the Philippines during the period of taxes, fees and charges, except for
employment of such foreign nationals. real property tax on land
improvements and equipment;
A registered enterprise shall train Filipinos as b. Tax and duty free importation of
understudies of foreign nationals in training materials and equipment;
administrative, supervisory and technical skills and
and shall submit annual reports on such training c. Importation of new motor vehicles
to the Board. subject to the payment of
b. corresponding taxes and duties.
c. Simplification of customs procedures for the
importation of equipment, spare parts, raw 3. Expatriates of RHQs and ROHQs are entitled to the
materials, and supplies and exports of following incentives:
processed products.
a. Multiple entry visa, including those of
d. Importation of consigned equipment for a spouse and unmarried children below age 21;
period of 10 years from date of registration, A non-immigrant visa shall be issued
subject to posting of a re-export bond. within 72 hours upon submission of all
required documents.
e. The privilege to operate a bonded The multiple entry visa is valid for a
manufacturing/trading warehouse subject to period of three (3) years and
Customs rules and regulations. extendible for another three years
upon submission to the Bureau of
C. Additional Incentives for Locating Project in Immigration of a sworn certification by
Less Developed Areas a responsible officer of the
RHQ/ROHQ that its license to operate
Additional incentives for BOI registered enterprises remains valid and that it complied with
locating in a Less Developed Area (LDA), whether all requirements stipulated under
proposed or in an existing venture geared for relevant Philippine laws.
expansion, include:
b. Withholding tax of 15% on
1. Six (6) year income tax holiday regardless of compensation income applicable to
status (pioneer or non-pioneer) or type of both alien and Filipino executives
holding managerial and technical commerce within the ECOZONE.
positions;
In its website, the PEZA reports that as of 31 May
Enterprises that locate in any of the four 2010, there are 217 economic zones operating in
government ecozones in the country are allowed various provinces and regions throughout the
one hundred (100%) foreign ownership, provided Philippines. Of the 217, 7 are Agro-Industrial
the total production of firms situated inside the Economic Zones, 134 are IT Parks/Centers, 65
zones must be entirely for export. In certain Manufacturing Economic Zones, 2 are Medical
instances, and subject to the approval of PEZA, Tourism Parks/Centers and 9 are Tourism Economic
thirty percent (30%) of production may be sold in Zones.
the domestic market.
Projects registered under PEZA may still avail of BOI
c. Travel tax exemption issued by the incentives provided there is no double enjoyment of
Philippine Tourism Authority (PTA) upon the same or similar incentives.
recommendation of the Board of
Investments (BOI) during the expatriates Investment Incentives for Ecozone
assignment in the country; and Developers/Operators
Enterprises which earn at least fifty percent (50%) of Under Bangko Sentral ng Pilipinas (BSP) Circular
their normal operating revenues from the sale of No. 1389, foreign investments are required to be
products or services outside the Philippines for registered with the BSP if the foreign exchange is to be
foreign currency shall be entitled to incentives aside sourced from the Philippine banking system..
from those granted under the Omnibus Investments
Code and those granted to enterprises in the If foreign investments are not registered with the BSP,
ecozones or in the Subic Free-Port, as follows: the Philippine company and/or the foreign investor
cannot use the Philippine banking system to convert
a. exemption from the requirement of advance any profits and earnings from Philippine Pesos into
payment of customs duties upon the opening of a other currencies or service the repatriation of capital
letter of credit; outside the Philippines. They can, however, source its
foreign exchange outside the Philippine banking
b. tax credits for increases in current year's export system (i.e., foreign exchange dealers). The foregoing
revenues. The following tax credits are available: is subject to the power of BSP, with the approval of
the President of the Philippines, to restrict the
First 5% increase in 2.5% tax credit availability of foreign exchange during an exchange
annual export revenue crisis, when an exchange crisis is imminent or in times
Next 5% increase 5% tax credit of national emergency.
Next 5% increase 5% tax credit
For increases in excess of 10% tax credit II. Taxation
15%
A. Basis of Taxation:
c. support in export financing, guarantee and
insurance from the Export Financing Programme On Income of Domestic and Resident Foreign
operated under the Export Financing Institution. Corporations:
C. Foreign Investors Lease Act Corporate Income Tax. As a rule, a domestic
corporation is liable to pay income tax at the rate of
Any foreign investor is allowed to lease private lands thirty percent (30%) based on its worldwide net
for a period of fifty (50) years, renewable for twenty- income. A resident foreign corporation is generally
five (25) years, as long as the leased land is used taxed at the same rate, but based on its net income
solely for the purposes of or in connection with the derived from sources within the Philippines. A foreign
investment, such as the establishment of industrial corporation is considered a resident when it is
estates, factories, assembly or processing plants, engaged in trade or business in the Philippines and is
agro-industrial enterprises, land development for licensed by the SEC to engage in trade or business in
tourism, industrial or commercial use, and similar the Philippines.
priority productive endeavors.
b. Minimum Corporate Income Tax (MCIT): This g. Percentage Tax: This is a business tax
is imposed on domestic and resident foreign imposed on persons or entities who sell or
corporations at the rate of 2% of gross income lease goods, properties or services in the
beginning on the fourth taxable year immediately course of trade or business whose gross
following the taxable year in which such annual sales or receipts do not exceed
corporation commenced business operations, Php550,000.00 and are not VAT-registered.
whenever the amount of MCIT is greater than the Percentage tax is at 3% based on gross
normal tax due (based on the rate of 30%) from quarterly sales/receipt.
such corporation.
h. Withholding Tax on Compensation is the
c. Fringe Benefits Tax: Fringe benefits paid to tax withheld from individuals receiving purely
managerial and supervisory employees are compensation income.
subject to a fringe benefit tax of 32% based on Withholding tax on compensation ranges
grossed-up monetary value of the benefits. The from 5% to 35%.
grossed-up monetary value of the fringe benefit
shall be determined by dividing the actual i. Expanded Withholding Tax is a kind of
monetary value of the fringe benefit by sixty-five withholding tax which is prescribed only for
percent (65%), and seventy percent (70%). certain payors and is creditable against the
income tax due of the payee for the taxable
d. Capital Gains Tax: This is a tax imposed on the quarter year. Withholding tax rates vary
gains presumed to have been realized by the depending on the nature of the income
seller from the sale, exchange, or other paid.
disposition of capital assets located in the
Philippines, including pacto de retro sales and C. Other Relevant Taxes
other forms of conditional sale.
Dividends paid to foreign corporate shareholders.
Capital gains tax for sale of real property: Six The remittance of dividends by a domestic corporation
percent (6%) of fair market value or selling price, to its foreign "parent" corporation is, generally, taxed
whichever is higher. at 35%. This, however, may be reduced to 15% where
the country in which the foreign "parent" corporation
Capital gains tax for sale of shares of stocks either: (a) grants a tax sparing credit of 20%, or (b)
not traded in the stock exchange: Five does not at all impose any tax on such dividends
percent (5%) based on the first Php100,000.00 received.
net capital gain, and ten percent (10%) for net
capital gain in excess of Php100,000.00. The rate of withholding tax on dividends is subject to
further reduction under an applicable tax treaty.
Percentage tax on the sale of shares of stocks Dividends received from foreign companies.
traded in the stock exchange: Dividends received from foreign corporations shall be
one half of one percent (1/2 of 1%) of subject to income tax. For resident foreign
gross selling price corporations who are only taxed on sources within
the Philippines, Section 42(A)(2)(b) of the Tax Code
e. Documentary Stamp Tax (DST): This is a of 1997 provides that dividends received from a
tax on documents, instruments, loan foreign corporation shall be treated as income from
agreements and papers evidencing the sources within the Philippines unless less than fifty
acceptance, assignment, sale or transfer of per cent (50%) of the gross income of such foreign
an obligation, rights, or property incident corporation for the three year period ending with the
thereto. DST rates vary depending on the close of its taxable year preceding the declaration of
such dividends was derived from sources within the establishment of a domestic industry.
Philippines.
g. Marking duty is a duty imposed on imported
Interest paid to foreign corporate shareholders. articles that are not properly marked as to the
Under Section 28(B) of the Tax Code, as amended, country of origin of such articles in accordance
interest paid to non-resident foreign corporation is with the requirements set down by the Code.
subject to 35% final withholding tax, unless a lower
treaty rate applies. However, if interest is on foreign h. Discriminatory duty is imposed on imported
loans, a final withholding tax of 20% shall apply articles whenever their country of origin imposes
(Section 28(b)(5)(a)), unless reduced by an any unreasonable charge or limitation which is
applicable treaty. not equally enforced upon the like articles of
every foreign country, or discriminates against
IP royalties. Payments for royalties are subject to the the commerce of the Philippines.
following taxes:
At present, only certain planted trees are imposed
a. If paid to a domestic corporation 20% with an export duty. As a rule, exports by an export
(Section 27(d)(1)) producer registered with the Board of Investments of
b. If paid to a resident foreign corporation 20% its non-traditional registered export product shall be
(Section 28(A)(7)(a)) exempted from any export tax, duty, impost and fee,
c. If paid to a non-resident foreign corporation - including wharfage fee.
35% (Section 28(B)(1)), unless reduced by a
tax treaty F. Tax Treaties
D. Transfer Pricing The Philippines has entered into tax treaties with
approximately 38 countries, including the United
Under Section 50 of the 1997 Tax Code, as States.
amended, the Commissioner of Internal Revenue has
the power to allocate income and expenses between III. Labor
or among controlled groups of companies in order to
prevent the avoidance of taxes. It places a controlled Philippine labor laws generally cover the
taxpayer in tax parity with an uncontrolled taxpayer employment of individuals who render services in
by determining the arm's-length price of inter- the Philippines, regardless of the place where the
company transactions. individuals were actually or first employed. The
Pursuant to such provision, the Bureau of Internal Philippine Overseas Employees Association
Revenue has issued RAMO 1-98 which provides for regulates the deployment of Filipinos abroad.
audit guidelines and procedures in the examination of
interrelated group of companies. A written contract is not a specific requirement under
the law to establish an employer-employee
E. Imports/Exports relationship. Other terms that govern the
employment relationship include any applicable
Imports are subject to import duties based on the collective bargaining agreement, wage orders issued
various rates prescribed under the tariff and customs by the Department of Labor, and other laws as well
code. In addition, there are special duties imposed in as implementing rules and directives from the
the following instances: Department of Labor.
e. Anti-dumping duty is a special duty imposed on Constitution provides that employees have a right to
the importation of articles into the Philippines at participate in policy and decision-making processes
less than its normal value when destined for affecting their rights and benefits as may be provided
domestic consumption in the by law.
exporting country. The rate of duty is equivalent
to the difference between the export price and the Security of Tenure
normal value of such articles.
Employees who have attained regular status, i.e. an
employee who has been engaged to perform activities
f. Countervailing duty is a special duty imposed
which are usually necessary or desirable in the usual
on imported articles which are granted any kind
trade or business of the employer, or has rendered at
or form of subsidy by the government in the
least one year of service, are entitled to security of
country of origin or exportation, the importation of
tenure and cannot be terminated except for just or
which has caused or threatens to cause material
authorized causes.
injury to a domestic industry or has materially
retarded the growth or prevents the
The just causes for dismissal are: serious misconduct Work in the Philippines
or willful disobedience by the employee of the lawful
orders of his employer or representative in connection Under labor laws, foreign nationals who shall be
with his work; gross and habitual neglect by the working in the Philippines, are required to apply for
employee of his duties; fraud or willful breach by the an Alien Employment Permit. (AEP), subject to
employee of the trust reposed in him by his employer certain exceptions. The AEP is issued after a
or duly authorized representative; commission of a determination by the Department of Labor &
crime or offense by the employee against the person of Employment (DOLE) that there is no person in the
his employer or any immediate member of his family or Philippines who is competent, able and willing at the
his duly authorized representative; or other causes time of the application to perform the services for
analogous to the foregoing. The authorized causes for which the alien shall be employed.
dismissal are the installation of labor saving devices,
redundancy, retrenchment to prevent losses, or the As a general rule, AEPs are approved and released
closing of operation of the establishment. within a period of three (3) to four (4) weeks from the
date of application.
The normal consequences of a finding that an
employee has been illegally dismissed are that the IV. Immigration
employee is entitled to reinstated to his former position
without loss of seniority rights and payment of Entry Visa
backwages. However, in case reinstatement is no
longer possible due to strained relations, the Courts Foreign nationals may come to the Philippines for
may order the payment of separation benefits in lieu of reasons of business, pleasure or health with a
reinstatement in addition to backwages. temporary visitor's visa. This visa allows stays for
periods of 59 days, extendable for a maximum of one
Redundancy is deemed to exist when the services of year. To extend their stay, visitors must register with
an employee are in excess of what is reasonably the Bureau of Immigration or with the office of the
demanded by the actual requirements of the company. municipal or city treasurer in areas outside Manila.
There are no specific regulations for redundancies. Executive Order No. 408 allows foreign nationals,
Although in case of termination of an employee due to except those of specifically restricted nationalities, to
redundancy, the terminated employee is entitled to stay in the Philippines for up to 21 days without a
separation pay of one (1) month pay or to at least one visa.
(1) month pay for every year of service, whichever is
higher. Work Permits
The Firm is composed of 75 lawyers - all of whom B. Healthcare and Wellness Products and
speak English fluently and majority of whom have Services
received training and graduate degrees from
universities abroad. The Firm offers a full range of This covers hospital services, medical and
legal services with wide experience in the fields of dental services, other human health and
corporate and business laws, taxation, energy, wellness services (including services in the
infrastructure, securities, foreign investments, banking, field of nursing care, rehabilitation and
finance, litigation, intellectual property and aviation recuperation, spas), retirement villages and
and admiralty. related services located either in identified
medical zones1 1 or outside Metro Manila
Partners and associates of the Firm are also active when catering mainly to foreigners and
members and officers of business and civic non-residents. This also covers the
associations such as the Makati Business Club, the manufacture of drugs and medicines in
Management Association of the Philippines, the accordance with the Philippine Drug
American Chamber of Commerce, the Philippine-U.S.
Business Council, the Philippine-U.K. Business
Council, Philippine-Japan Business Council, 1
Medical zones are selected areas declared by the
Philippine-Korea Business Council, the Philippine- President upon the recommendation of the Board of
Singapore Business Council, Philippine Thailand Investments, which are developed into centers for
Business Council, APEC Business Forum, Pacific professional health care provided by physicians and
Basin Economic Council, Asian Neighbors' Forum, the nurses, for the treatment of inpatients and diagnosis
various chapters of the Rotary Club, as well as of and/or therapy of outpatients, inclusive of emergency
professional organizations such as the Inter-Pacific medical services, with large numbers of beds for
Bar Association, International Business Association, intensive care and long-term care, facilities for surgery
Union Internationale des Avocats Asean Law and childbirth, bioassay laboratories, trauma centers,
Association, Tax Management Association of the childrens hospitals, seniors hospitals, and hospitals
Philippines, Asian Patent Attorneys Association, for dealing with specific medical needs. It shall include
International Association for the Protection of affiliation with universities for medical research and
Intellectual Property, Intellectual Property Association the training of medical personnel.
Formulary of the Department of Health services involving post harvest facilities,
(DOH), supplements limited to Vitamin A, grains-highway facilities, cold storage, blast
iron and iodine for use in the Food freezing, vapor heat treatment (VHT), and ice
Fortification Law, and herbal medicines. plants in less developed areas (LDA); air and
land transport; multi-modal passenger and/or
C. Information and Communications cargo terminals; pipeline operations; toxic and
Technology hazardous waste (THW) management; and
water supply, treatment, and distribution. This
This covers IT and IT-enabled services and also covers infrastructure projects under the
ICT support services located either outside BOT Law.
Metro Manila or in identified IT hubs.
H. Tourism
D. Electronics This covers the establishment of tourism
This covers all segments within the value- economic zones, tourist accommodation
chain structure of the industry such as facilities, tourist estates, and eco-agri tourism
Original Design Manufacturing (ODM), facilities. This also covers historicocultural
electronics manufacturing services (EMS), heritage projects and services provided by
the manufacture of electronic products tourist operators as endorsed by the
(except home appliances), IC design, the Department of Tourism (DOT).
manufacture of parts and components of
electronic products including the inputs for the I. Shipbuilding/Shipping
manufacture of such components, and the This covers shipbuilding, ship repair, shipyard
manufacture of production supplies (e.g., operations (excluding shipbreaking), and
molds and dies, precision tools, etc.) used by overseas, domestic and RORO Shipping and
the electronics industry. This also covers the terminal operations.
establishment and operation of Centers of
Excellence, test and other service facilities J. Jewelry
catering to the electronic industry. This covers the manufacture of fine jewelry
and costume jewelry.