OMNIBUS INVESTMENT CODE OF 1987

AND
FOREIGN INVESTMENTS ACT OF
1991
WHAT YOU NEED TO KNOW

Omnibus Investment Code of 1987

-encourage private Filipino and foreign investments in :

industry, agriculture, forestry, mining, tourism and other sectors of the economy which shall provide significant employment opportunities relative to the amount of the capital being
invested resulting in increased volume and value of exports for the economy.

QUALIFIED PROPONENTS:

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

PURPOSE:

Liberalize the entry of foreign investments (non-

cash assets) into the country.

ENTERPRISE COVERED:
- Domestic Market Enterprise
- Export Enterprise
Investment Rights (former Filipino):

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

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

 APPLICATION FOR REGISTRATION

AGENCY Type of Business Requirements

SEC Domestic corpo or Application form,

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

SEC Foreign Corpo at least US

$30,000
BTRCP, DTI-NCR Single - Refer RA 7042
Proprietorships, - Refer RA 1180
Applications for
Metro Manila

Provincial Extension Corporations/ - Refer RA 7042

Offices of the SEC Partnerships - Refer RA 1180

Provincial Offices of Sole Proprietorships - Refer RA 7042

the 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)


FISCAL INCENTIVES

1. Income Tax Holiday (ITH)

- new projects with a pioneer status for 6 years
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

THE END