You are on page 1of 10

OMNIBUS INVESTMENT CODE OF 1987

AND
FOREIGN INVESTMENTS ACT OF 1991
QUALIFIED PROPONENTS:

- Foreign Nationals
- Former Filipino Citizens (Natural-born)

PURPOSE:

Liberalize the entry of foreign investments (non-


cash assets) into the country.
Investment Rights (former Filipino):

1. Cooperatives
2. Rural Banks
3. Thrift banks and private development banks
4. Financing companies

-Sec. 9 of the amended Foreign Investments Act


Businesses Exclusive to Filipino Nationals:

1. List A - 60% / 40 % - Foreign Equity


Share

2. List B - - small and medium-sized


domestic market enterprise with paid-in
equity capital of less than US $200,000

-Sec. 8 of the amended Foreign Investments Act


AGENCY Type of Business Requirements

SEC Domestic corpo or Application form, AOI,


partnerships which are Name verification slip,
non-Philippine nationals Bank certificate of
deposit, ACR, ICR, SIRV,
VISA 13, etc

SEC Foreign Corpo at least US $30,000

BTRCP, DTI-NCR Single Proprietorships, - Refer RA 7042


Applications for Metro - Refer RA 1180
Manila

Provincial Extension Corporations/ - Refer RA 7042


Offices of the SEC Partnerships - Refer RA 1180

Provincial Offices of the Sole Proprietorships - Refer RA 7042


DTI - Refer RA 1180
Investment Priorities Plan (IPP) an annual plan of
priority industries and service areas that are encouraged
through the grant of fiscal and non-fiscal incentives.

Objective: - uplift the well-being of the poor and the marginalized


- enhance global competitiveness of Phil. Industries
- ensure sustainable development
- take advantage of global and international devt.

Requirement:

1. at least 50% of production is for exports (Filipino-owned)


2. at least 70% of production is for exports (foreign-owned)

- Omnibus Investments Code of 1987, as amended


FISCAL INCENTIVES

1. Income Tax Holiday (ITH)


- new projects with a pioneer status for 6 years
- new projects with a non-pioneer status for 4 years
- expansion projects for 3 years
new or expansion projects in less developed areas for 6
years regardless of status
- modernization projects for 3 years. Exemption is limited
to incremental sales revenue/ volume

2. Duty free importation of Capital Equipment


- 0% duty with corresponding 12% VAT until the
effectivity of EO 528 on 2011.
3. Duty free implementation of spare parts
- 0% duty with corresponding 12% VAT until the effectivity of EO 528
on 2011.

4. Exemption from taxes and duties on imported spare parts


- for export producers with customs bonded warehouse exporting at
least 70% of production.

5. Exemption from wharfage dues and export tax, duty, impost and fees
- exports of non-traditional export products are exempt from
wharfage dues and any export tax, impst and fees.

6. Tax and duty free importation on breeding stocks and genetic materials.

7. Tax Credits:
a. duty portion of domestic breeding stocks and genetic materials
b. for taxes on raw materials
8. Additional deductions from taxable income

a. Available for the first 5 years from registration,


additional deduction from the taxable income
equivalent to 50% of the wages of additional skilled
and unskilled workers in the direct labor force.
(deduction will be doubled in an LDA)

b. Additional deduction for necessary and major


infrastructure works.
NON-FISCAL INCENTIVES
1. Employment of foreign nationals
- may be employed in supervisory, technical or advisory
positions within 5 years from registration.

2. Simplification of customs procedures:


- importation of equipment, spare parts, raw materials, supplies
and exports of processed products

3. Unrestricted use of consigned equipment


- re-export bond is posted

4. Access to Bonded Manufacturing/Trading Warehouse System


- in all areas