BOI PROJECT REGISTRATION

PROCEDURES AND INCENTIVES

by

DOMINGO I. BAGAPORO
Director

ProjectEvaluationandRegistrationDept.,BOI
ENERGY INVESTMENT FORUM 2009
20 May 2009
Crown Regency Hotel, Fuente Osmena, Cebu City
BOI

PresentationOutline

BOIRegistration
IncentivesAvailmentofBOI
RegisteredFirms
InvestmentPrioritiesPlan
(IPP)

BOI

QualificationsforRegistration

1. CitizenofthePhilippines;oran
EntityorganizedunderPhilippinelaws,
atleast60%Filipinoowned**
2. ActivitymustbelistedintheInvestments
PrioritiesPlan(IPP)**
**exemptionsperQualification

BOI

QualificationsforRegistration
1.

CitizenofthePhilippines;oranEntityorganized

underPhilippinelaws,atleast60%Filipino
owned

**IfnotFilipino,thefollowingmustbe
compliedwith:
a) ProposestoengageinaPioneer
project;or
b) Commitstoexportatleast70%of
production.
BOI

**

QualificationsforRegistration

2. ActivitymustbelistedintheInvestments
PrioritiesPlan(IPP)

**Ifnotlisted,theprojectmustbe
exportoriented:
Filipino owned atleast 50% or
Foreign owned 70% ofitstotal
productionisforexport
BOI

TypeofProject/Status
TypeofProject:

New
Expansion
Modernization/Rehabilitation
Existing

ProjectStatus:

BOI

Pioneer
NonPioneer

ProjectStatus

WhatisaPioneerEnterprise?
1. Engagedinthemanufacture,processingor
productionofgoods,products,commoditiesorraw
materialsthat havenotbeen/notbeingproducedin
thePhilippinesonacommercialscale;or
2.

Whichusesadesign,formula,scheme,method,
processorsystemofproduction,whichis newand
untriedinthePhilippines;or

3.

Withmagnitudeofinvestmentasdeterminedbythe
Board.

BOI

EquityRequirement

9 Minimumequitytofinancetheprojectis25%
oftotalprojectcost
9 Thiscouldbeintheformofpaidupcapitalor
retainedearnings
9 Thisrequirementisapostregistration
condition

BOI

RequiredDocuments
1.

ProperlyaccomplishedApplicationForm

2.

ProjectStudy/ProjectReport

3.

CopyoftheSECCert.ofReg.,Articlesof
Incorporation/Partnership,andBylaws

4.

Bd.Res.authorizinganofficertotransact,execute,
andsigninbehalfoftheapplicantfirm

BOI

RequiredDocuments
5. ProofofpublicationoftheNoticeofthefilingof
Application
6. AFSandITRforthepast3yearsorfortheperiod
theapplicanthasbeeninoperationiflessthan3
years(forexistingfirms);orSwornStatementof
Assets&LiabilitiesofMajorStockholders(for
newcorporations)
7. Otherdocumentsthatmayberequiredbythe
specificactivityintheIPP

BOI

RegistrationProcess
1. Checklistingofapplicationdocument
2.PublicationoftheNOTICE
2. Officialfiling
3. Evaluationofapplication/project
4. PresentationtotheManCom/Boardfordecision
5. NotifyapplicantofBoardaction
6. Compliancewiththepreregistrationrequirements
7.IssuanceofCertificateofRegistration

BOI

Client presents documents to

Project Evaluation and Registration
Department (PERD) for check listing
Client prepares the
required documents

Application/
Registration
Procedures

Incomplete

Documents are checked by PERD for

completeness/ consistency of
information/ documents

Complete

- If not complete, Letter containing

deficiencies will be sent to firm

Client receives Order of

Payment and pays application
fee to the cashier

* Within 20 working
days from date of
official
filing/acceptance

Application (with complete info

& supporting documents) is
officially accepted by BOI; PERD
evaluates application & presents to
MANCOM *

Project is presented by PAG

to the Board

Denied

Approved
Client receives Notice of Approval & pre-registration
requirements; Client subsequently complies w/ preApproved
registration requirements (including payment of
regn fee) w/in 30 days/max of 90 days

Client waits for the release of the Certificate

of Registration

Client Receives Certificate of

Registration

BOI

Client receives
Notice
of Board Action

PreRegistrationRequirements
1.

BoardResolutionAcceptingtheTermsand
Conditions
2. BoardofDirectors SwornStatement:Affirmingall
representationsmadebythefirm
3. CertificationofNonarrearages:applicantisnot
inarrearsinthepaymentofoutstanding
obligations,loans,tothegovernmentorany
governmentinstrumentality
4. Undertaking Commitmenttocomplywith
25%minimumequityrequirement
5.Paymentofregistrationfee
BOI

FEES
FilingFee:
ProjectCost(inmillionPhp)
Fee(Php)
4
1,510.00
>420
3,010.00
>2050
4,510.00
>50
6,010.00
RegistrationFee:
1/10of1%ofthetotalprojectcost(notlowerthanP3,000.00ornot
morethanP15,000.00)(forexistingprojects,afixedfeeof
P3,000.00)
MicroEnterprises exemptedfromfilingandregistrationfees
SmallEnterprises 25%ofapplicablefilingandregistrationfees
Note:MicroEnterprise:Notmorethan3,000,000*
SmallEnterprise:P 3,000,001 to P 15,000,000*
TotalAssetsexclusiveofthecostofland;and,
ProjectCostexclusiveofthecostofland
BOI

ElectronicFiling
ElectronicFilingofApplication

VisittheBOIwebsite(www.boi.gov.ph),clickInfo
Center,thenApplicationFormstodownload
applicationformandformatfortheprojectreport
ForwardthesedocumentstoPERD@boi.gov.ph and
indicatetheavailabilityofSECdocumentsand
FinancialStatements
Within48hours,PERDwillsendanemail
informingthat:

BOI

Information/documentsarecompleteandtherefore,
applicantmayproceedtopayfilingfee;or
Additionalinformation/documentsmustbesubmitted

BOIRegistrationProcedures
NOTICE
Notice is hereby given that

(Name of firm)____________________

is applying for registration with the Board of Investments (BOI) as_______________

(Activity and Status)________________________________________________
with a capacity of __________________________________________________
and with project /plant site located at ___________________________________

Any person with valid objection/s to, or pertinent comment on the abovementioned project may file his/her objection in writing, under oath, with the BOI
within three (3) days from the date of this publication.

DOMINGO I. BAGAPORO
Director, PERD

BOI

AssistancetoMicro&SmallEnterprises

Onedayprocessingofapplicationforregistration

Microenterprisesareexemptedfrompaymentof
application&registrationfees
Exemptionfromthe25%equityrequirement
PostingoftheNoticeofFilingofApplicationin
provincial,city,municipalorbarangayhallinlieuof
newspaper
Simplifiedreportorialrequirements
Simplifiedapplicationforincentivesavailment

BOI

IncentivesAvailmentof
BOIRegisteredFirms

BOI

BOIIncentives
1.
2.
3.
4.
5.
6.

IncomeTaxHoliday
Additionaldeductionforlaborexpense
Dutyfreeimportationofcapitalequipment
Unrestricteduseofconsignedequipment
Tax&dutyfreeimportationofsparepartsandsupplies
Tax&dutyfreeimportationofbreedingstocksandgenetic
materials
7. Taxcreditondomesticbreedingandgeneticmaterials
8. Taxcreditonrawmaterials&supplies
9. Additionaldeductionfrommajorinfrastructureworks
locatedinLDAs
10. Exemptionfromwharfagedues
11. Employmentofforeignnationals
12. ZeroRatedValueAddedTax

BOI

IncomeTaxHoliday

Full exemption from income taxes levied by the

National Government
Entitlement reckoned from start of operation
per timetable or actual start of operation
whichever comes first

BOI

IncomeTaxHoliday

BOI

Firmswhoseregisteredoperation/sis
locatedwithinNCRarenotentitledto
ITH,exceptintheff.cases:
1. Registeredoperation/sislocatedina
governmentindustrialestate
2. Projectsthatwillengageinservicetype
activitiesidentifiedintheIPP
3. Exportorientedprojects
4. Modernizationprojects
5. Microandsmallprojects
6. StrategicActivitiesasdefinedintheIPP

IncomeTaxHoliday
PeriodofEntitlement
EligibleEnterprises

No.of
Years

New&Pioneer

New&NonPioneer

Expanding

ProjectslocatedinLessDevelopedAreas

Modernizing

R.A.8479

BOI

IncomeTaxHoliday
CriteriaforITHBonusYear(anyofthe
ff.):
RatioofCostofCapitalEquipmentofless
thanUS$10,000to1DirectLabor
CostofIndigenousRawMaterialsisat
least50%ofTotalCostofRawMaterials
NetFOREXofatleastUS$500,000annually
forthefirst3yearsofoperation

BOI

IncomeTaxHoliday
FilingApplication
1monthfromthefilingoftheAnnualIncomeTax
Return(ITR)withBIRorfromthelastday
prescribedbylawforsuchfilingwhichevercomes
later(nopenalty)
Within6months(withpenalty)
Beyond6months(forfeitureofITH)
ForcompanieswithtentativeITRs:
One(1)monthfromthefilingofthefinalITR;or
Withinone(1)monthafterthelapseofthetwo(2)year
periodwithinwhichtofilethefinalITR

BOI

IncomeTaxHoliday
Penaltiesforlatefilingofapplication
Withinthe31st and180th dayfromdateoffilingofthe
annualITRwiththeBIRorfromthelastday
prescribedbylawforthefilingofITR
Penalty=amountofITHx1%butnotlessthanP500.00nor
morethanP2.0million
After6months:
Penalty=ForfeitureofITHforthetaxableyear

BOI

AdditionalDeductionforLabor
Expense
50%ofIncrementalDirectLaborCostDeductible
fromTaxableIncomeforthefirstfive(5)yearsfrom
registration
100%iflocatedinLessDevelopedAreasexceptthose
inminingandforestrysectors
Theratioofimportedanddomesticcapital
equipmenttothenumberofworkersdoesnotexceed
US$10,000to1worker
NosimultaneousavailmentwithITH
Forexportproducers,compliancewithexport
commitment(70%formajorityforeignowned
firms,50%formajorityFilipinoownedfirms)
BOI

DutyfreeImportationofCapital
Equipment
Dutyfreeimportationofcapitalequipment,
spareparts&suppliesforunderEO528
CovereditemsarethoseclassifiedunderAHTN
Chapters40,59,68,69,70,73,76,82,83,84,85,
87,89,90,91&96
ForfirmsregisteredwithBOIonorafter06June
2004asNeworExpanding/Modernizing.
AvailableuntilJune6,2009(forthosecovered
byEO313;untilJune16,2011(forthosecovered
byEO528)
BOI

DutyfreeImportationofCapital
Equipment
Conditionsforavailment:
Thecapitalequipment,sparepartsandsuppliesto
beimportedarenotmanufactureddomesticallyin
sufficientquantity,ofcomparablequalityandat
reasonableprices
Theyarereasonablyneededandwillbeused
exclusivelybytheenterpriseinitsregistered
activity
Theratedcapacityoftheequipmentiswithinthe
registeredcapacitysubjecttoreasonableallowance
Postingofaperformancebond
Whenperformancebondislifted

BOI

UnrestrictedUseofConsigned
EquipmentunderReexportBond
Machinery,equipmentandsparepartsconsigned
toanyBOIregisteredfirmshallnotbesubjectto
restrictionsastoperiodofuse
Entitlementtoapplywiththisincentivewillnot
exceed10yearsfromthedateofregistration
Sparepartsmaybeimportedseparately
Nonproductionequipmentsuchaspower
generationsets,transformers,compressors&
boilersetc.,areincluded
Importdocumentsshouldindicateimportationis
onconsignedbasis
BOI

TaxandDutyfreeImportationof
SpareParts&Supplies
Exemptionfromcustomsdutiesandnational
internalrevenuetaxesforimportationof
requiredsuppliesandspareparts
Availmentperiodnottoexceed10yearsfrom
dateofregistration
TaxandDutyExemptionCertificateisissued

BOI

EmploymentofForeignNationals
Specialnonimmigrantmultipleentryvisagiventoforeign
nationals
supervisory,technicaloradvisorypositionsnottoexceed
five(5)yearsfromdateofregistrationofthefirm
positionsofpresident,treasurerandgeneralmanager
mayberetainedbyforeignnationalsbeyond5yearsfor
atleast40%foreignownedfirms
Extendibletospouseandunmarriedchildrenunder21years
ofage
Mustsubmitreporton2Filipinounderstudies
Option:SpecialInvestorsResidentVisaforIndefinitePeriod
withUS$75,000investmentinsharesofstocksofBOI
registeredfirms
BOI

EmploymentofForeignNationals
Filingofapplication
Fornewlyhired: beforeassumptionofduty
Forextension: atleast1mo.before
expirationdateofexistingemployment
authority

ProcessingPeriod
New:3workingdays
Renewal:2workingdays
BOI

2008INVESTMENTPRIORITIES
PLAN
I.PREFERREDACTIVITIES
B.Infrastructure
Xxx
2.Powergenerationprojectsasspecifiedin
thePowerDevelopmentPlanthatmay
qualifyforregistrationare:
a.Thoseutilizingindigenousand
renewableenergysourcessuchas
biomass,wastetoenergyconversion,
solar,wind,geothermal,hydroand
tidal;
BOI

2008INVESTMENTPRIORITIES
PLAN
2.Powergenerationprojectsxxx
b.Otherenergysourcesadopting
environmentallyfriendly
technologiesexceptoilfiredpower
generatingplants;
c.Powergenerationprojectsunder
SmallPowerUtilitiesGroup(SPUG);
and

BOI

2008INVESTMENTPRIORITIES
PLAN
2.Powergenerationprojectsxxx
d.ThoseundertheNationalPower
Corporation(NPC)privatizationplan
subjecttoNoteI.11.
Note I.11: Privatized projects paying income
taxes prior to or at the time of privatization
except those prequalified before the effectivity
ofthe2008IPPwithITHfactoredininthebids
shallnotbeentitledtoITH.)

Only income from sale of electricity

generated from the plant shall be
entitledtoITH.
BOI

2008INVESTMENTPRIORITIES
PLAN
The following may qualify for pioneer
status:
Power generation projects using
renewableenergysources;or
Power projects that cost at least the
Philippine Peso equivalent of US$1
millionpermegawatt.

BOI

2008INVESTMENTPRIORITIES
PLAN
Newpowergenerationprojects,applied
during the effectivity of this IPP, to be
undertaken by the same BOIregistered
firm or an entity with the same
stockholders
or
interlocking
stockholders to the extent of 50%
ownership shall be entitled to the
diminishing ITH rate of exemption as
follows:
1.Firstproject 100%
2.Succeedingprojects 5%reduction
foreverysucceedingprojectbutthe
rateofITHexemptionshallnotbe
lessthan70%.
BOI

2008INVESTMENTPRIORITIES
PLAN
I.PREFERREDACTIVITIES
B.Infrastructure
Xxx
7.ProjectsundertheBOTLaw
Application for registration must
include
an
endorsement
from
concerned government agency or
corporation or LGU, a copy of supply
contract, and other relevant supporting
documents.

BOI

2008INVESTMENTPRIORITIES
PLAN
I.PREFERREDACTIVITIES
B.Infrastructure
Xxx
7.ProjectsundertheBOTLaw
Ingeneral,BOTprojectswithsovereign
guarantee
and/or
government
guaranteed rates of return are not
entitledtoITH.
BOT projects that cost at least PhP1.0
billion may be granted pioneer status
forregistrationpurposesonly.
BOI

InvestmentPrioritiesPlan(IPP)
Comparison20082009 (Proposed)
PowerGenerationprojects
Whomayqualifyforregistration?
PioneerStatus

PipelineProjectsforOilandGas
ProjectsUndertheBOTLaw

BOI

InvestmentPrioritiesPlan(IPP)
Comparison20082009 (Proposed)
2008 IPP
I.Preferred Activities
C.Infrastructure
1. Power

Generation
Projects as specified in the
Power Development Plan that
may qualify for registration are:

a.

BOI

Those
utilizing
indigenous
and
renewable
energy
sources
such
as
biomass, waste to
energy
conversion,
solar,
wind,
geothermal,
hydro
and tidal;

2009 IPP (Proposed)

B.Regular List
2.Infrastructure
d.Power

Generation

Projects
This covers the following:

1) Those utilizing renewable

energy sources such as
biomass,
solar,
wind,
geothermal,
hydro
and
tidal[1];

[1] Power generation projects using renewable energy

shall be deleted from this list upon effectivity of the
Rules and Regulations to implement R.A. 9513 or
otherwise known as the Renewable Energy Act of
2008.

InvestmentPrioritiesPlan(IPP)
Comparison20082009 (Proposed)
b.

c.

d.

2008 IPP
Other
energy
sources
adopting
environmentallyfriendly technologies except
oil-fired power generating
plants;
Power generation projects
under Small Power Utilities
Group (SPUG); and

Those under the National

Power
Corporation
(NPC)
privatization plan subject to
Note I.11.
Note I.11: Privatized projects paying income taxes
prior to or at the time of privatization except those
prequalified before the effectivity of the 2008 IPP
withITHfactoredininthebidsshallnotbeentitled
toITH.)

BOI

2009 IPP (Proposed)

(2)
Other
energy
sources
adopting
environmentallyfriendly technologies;

(3)Power
generating
plants
located in missionary areas;
and
(4)

Those under the Power

Sector Asset and Liabilities
Management
(PSALM)
privatization plan.

InvestmentPrioritiesPlan(IPP)
Comparison20082009 (Proposed)
The following may qualify for PIONEER status:
2009 IPP (Proposed)

2008 IPP

Power generation projects

using renewable energy
sources; or

Power projects that cost at

least the Philippine Peso
equivalent of US$1 million
per megawatt.

BOI

Power generation projects

using renewable energy
sources; or
Power generating plants
located
in
missionary
areas;

Projects that cost at least the

Philippine Peso equivalent
of
US$1
million
per
megawatt may be granted
pioneer status but with
non-pioneer incentives.

InvestmentPrioritiesPlan(IPP)
Comparison20082009 (Proposed)
2008 IPP
New power generation projects,
applied during the effectivity of this
IPP, to be undertaken by the same
BOI-registered firm or an entity with
the
same
stockholders
or
interlocking stockholders to the
extent of 50% ownership shall be
entitled to the diminishing ITH rate
of exemption as follows:
1. First project 100%
2. Succeeding
projects

5%
reduction for every succeeding
project but the rate of ITH
exemption shall not be less than
70%

BOI

2009 IPP (Proposed)

Only income from sale of electricity

generated from the plant shall
be entitled to ITH.

InvestmentPrioritiesPlan(IPP)
Comparison20082009 (Proposed)
Pipeline Projects for Oil and Gas
2009 IPP (Proposed)

2008 IPP

Application for registration

on the establishment of
infrastructure for transport of
petroleum products and
natural gas, petrochemical,
and similar products, must
include proof of filing of an
application for Authority to
Operate Pipeline System
with the DOE.

BOI

Application for registration

on the establishment of
infrastructure for transport of
petroleum products and
natural gas, petrochemical,
and similar products, must
include proof of filing of an
application for Authority to
Operate Pipeline System
with the DOE.

InvestmentPrioritiesPlan(IPP)
Comparison20082009 (Proposed)
Projects Under the BOT Law

2008 IPP
Application for registration must
include an endorsement from
concerned government agency
or corporation or LGU, a copy of
supply contract, and other
relevant supporting documents.

In general, BOT projects with

sovereign guarantee and/or
government guaranteed rates of
return are not entitled to ITH.

BOT projects that cost at least

PhP1.0 billion may be granted
pioneer status for registration
purposes only.

BOI

2009 IPP (Proposed)

Application for registration must
include an endorsement from
concerned government agency
or corporation or LGU, a copy of
supply contract, and other
relevant supporting documents.

BOT projects that cost at least

PhP1.0 billion may be granted
pioneer status but with nonpioneer incentives.

ExecutiveOrderNo.661
DatedSeptember10,2007
DirectingtheLGUsinareasnearoradjacent
togeothermalproducingsitesinAlbay,
Laguna,Leyte,NegrosOriental,Sorsogon,
NorthCotabato,andNegrosOccidental to
developEconomicZones.

BOI

ExecutiveOrderNo.661
Forpurposesof:
Addressing the need for a more reliable,
economical, competitive, and efficient power
supply to provide quality electricity to power
sensitiveindustriallocationsintheeconomiczones.
Providing open access to private and publicly
owned economic zones in sourcing their power
with the end in view of lowering power cost in
economiczonesandtopromotecompetitiveness.
Providingalternativelocationsforinvestorsthrough
declaration of certain areas adjacent to geothermal
producingsitesaseconomiczones.
BOI

ExecutiveOrderNo.661
RespectiveLGUs
inareasnearor
adjacenttothe7
geothermal
producingsites
shalldevelop
economiczonesin
coordinationwith
PEZA.
PEZAshallassist
LGUsconcernedin
thecreationand
developmentofthe
economiczones.
BOI

1.
2.
3.
4.
5.
6.
7.

Tiwi,Albay;
MakBan,whichborders
MakilingandBanahawin
Laguna;
Tongonan,whichborders
OrmocandKanangainLeyte;
PalinpinoninValencia,
NegrosOriental;
BacMan,whichbordersBacon,
SorsogonandManito,Albay;
Mt.Apo,inthebordersof
Kidapawan,NorthCotabato;
and,
Murcia,NegrosOccidental

BOI Website:

http://www.boi.gov.ph

Dir. Domingo I. Bagaporo

dibagaporo@boi.gov.ph

Project Evaluation and Registration Dept.

perd@boi.gov.ph
8956617; 8953997

Incentives Department
BOI

8953568;

8968236

Thank you!
BOI