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- Category: investing in the philippines
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Foreign ownership of up to 100% is allowed for export enterprises. Export enterprises are defined as those businesses wherein at least 60% of output is exported.
For domestic market enterprises, foreign ownership is allowed up to 100%, except for specific areas listed under the Foreign Investments Negative List. Under the Negative List, investment is limited to up to 40%.
Basic rights are guaranteed under the Philippine constitution. These include:
a) Right to repatriate the proceeds of the liquidation of investments.
b) Right to freedom from expropriation without payment of just compensation.
c) Right to remit earnings from the investments.
d) Right to remit foreign exchange as may be necessary to meet principal and interest payments on foreign obligations.
e) Right to non-requisition of investment without just compensation.
- Foreign Investments Negative List
- Limited By Constitution and Specific Laws
- No Foreign Equity
- Mass Media
Services involving Licensed Professionals:
- Medical and Allied Professions
- Customs Broker
- Marine Deck Officer
- Marine Engine Officer
- Master Plumbing
- Sugar Technology
- Social Work
- Retail Trade
- Private Security Agencies
- Small-scale Mining
- Utilization of Marine Resources (except deep sea fishing)
- Rice and Corn Industry.
Up to 25% Foreign Equity
- Recruitment agencies
- Contracts for locally-funded public works
Up to 30% Foreign Equity
Up to 40% Foreign Equity
- Exploration and development of natural resources
- Land ownership
- Public utilities
- Educational institutions
- Financing companies
Limited for Reasons of Security,Defense, Health, Morals, and Protection of Local Small and Medium-Scale Enterprises
Up to 40% Foreign Equity
- Firearms, explosives, telescopic and sniper devices
- Guns, weapons, ammunition, armaments, missiles, military equipment
- Dangerous drugs
- Sauna and steam bathhouses, massage clinics
- Gambling enterprises with capital of less than US$500,000
- Export enterprises with equity of less than US$500,000 that utilize the depletion of natural resources
Special Investment Areas
Enterprises must be registered with the Board of Investments (BOI) and must engage in activities targeted in the Investment Priorities Plan (IPP) in order to enjoy certain benefits and incentives such as tax exemptions and concessions.
Priority investment areas in the IPP include the following:
- export activities;
- agriculture, food, and forestry-based industries;
- basic industries such as iron, steel, cement, mining, chemicals, petroleum, natural fibers, leather;
- engineering industries such as machinery and equipment, aluminum rods, shipbuilding;
- infrastructure and services such as power generation, transportation, telecommunications, industrial estates;
- tourism such as tourism estates, hotels, resorts, and other tourist accommodations, tourist buses;
- socialized housing;
- health products and services;
- modernization and rehabilitation programs;
- environmental conservation and protection;
- science and technology-oriented research and development.
Incentive Policies for Registered Firms
Enterprises registered with the BOI and engaging in activities under the IPP can enjoy the following incentives:
- tax and duty free importation of capital equipment;
- tax credit on domestic capital equipment;
- income tax holiday of four to six years, total period not to exceed eight years;
- additional deduction for labor expense;
- tax and duty free importation of breeding stocks and genetic materials for agricultural producers;
- tax credit on domestic breeding stocks;
- simplified customs procedures for imports and exports;
- unrestricted use of consigned equipment provided a re-export bond is posted;
- employment of foreign nationals in supervisory, technical, or advisory positions;
- tax credit for taxes and duties paid on materials and supplies used in export production;
- access to bonded warehousing systems;
- exemption from wharfage dues and any export taxes and duties.
- exemption from tax and duties of imported spare parts and supplies used for export production.