COMPARISON OF INCENTIVES AMONG VARIOUS INVESTMENT INCENTIVE LAWS

INCENTIVE Enabling Law BOI Executive Order No. 226, as amended PEZA Republic Act No. 7916, as amended

FISCAL
Income Tax Holiday Pioneer : Six (6) Years Non-Pioneer : Four (4) Years Expansion : Three (3) Years The exemption period may be extended for another year in each of the following cases: 1. The project uses indigenous raw materials 2. The project meets the BOI-prescribed ratio of capital equipment to number of workers 3. The net foreign exchange savings or earnings amount to at least US$ 500,000.00 annually during the first three (3) years of the project's commercial operations Incentives under E.O. 528 For BOI-registered companies: 12% VAT, 0% duty None Available for the first five (5) years from registration, additional deduction from the taxable income of 50% of the wages Available For Export-Oriented: Pioneer : Six (6) Years Non-Pioneer : Four (4) Years Expansion : Three (3) Years A special tax rate of 5% of gross income earned in lieu of the payment of all national and local taxes except real property tax after the income tax holiday

Tax and Duty Free Importation of Capital Equipment Tax Credit on Domestic Capital Equipment Additional Deduction for Labor Expense

Available

Available Same as EO 226 incentive : Available for the first five (5) years from registration, additional deduction from the taxable income of 50% of the wages Available

Tax and Duty Free Importation on Breeding Stocks and Genetic Materials Tax Credit on Duty Portion of Domestic Breeding Stocks and Genetic Materials Tax Credit for Taxes and Duties on Raw Materials Tax and Duty Exempt Importation of Imported Spare Parts Exemption from Wharfage Dues and Export Tax, Duty, Impost and Fee Additional Deduction on Training Expenses

Available

Available

Available (used in the manufacture, processing, or production of a project's export products) Available Available

Available

Available Available

None

Equivalent to 1/2 of the value of training expenses incurred

Exemption from Payment of Local and National taxes, Licenses Tax and Duty Exempt Importation of Construction Materials Taxes and Duty Exempt Importation of Specialized Office Equipment and Furniture Taxes and Duty exempt Importation of Specialized Vehicles and Other Transportation Equipment Taxes and Duty exempt Importation of Professionals Instruments and Household effects Exemption from Franchise, common carrier or valueadded taxes and other percentage taxes on public and service utilities

None

Available

None None

Available Available

None

Available

None None

Available None

NON-FISCAL
Business within may be 100% foreign-owned Unrestricted Use of Consigned Equipment Available (including exemption from taxes and duties on imported supplies and spare parts for consigned equipment) There are no restrictions on the use by BOI-registered enterprises of consigned equipment provided a re-export bond is posted. E. O. No. 226 provides further that if the consigned equipment and spare parts were imported tax and dutyfree, the re-export bond may be waived. Treatment of the Zone as a separate customs territory Permanent Resident Status for Foreign Investors and Immediate Family (Special Investors Resident Visa) None Available Available

Foreign personnel of regional headquarters in the Philippines; their respective spouses and unmarried children below 21 years old may be issued multiple entry visas. For investments of US$ 75,000.00

Available
For investments of US$ 150,000.00

Employment of Foreign Nationals

Foreign nationals may be employed in supervisory, technical or advisory positions within five (5) years from a project's registration, extendible for limited periods to be determined by the BOI. The positions of president, general manager, and treasurer or their equivalents, of foreign-owned registered firms may be retained by foreign nationals for a longer period. All foreign employees may bring with them their spouses and unmarried children under 21 years of age.

Foreign nationals may be employed in supervisory, technical or advisory positions within five (5) years from a project's registration, extendible for limited periods to be determined by the PEZA. The positions of president, general manager, and treasurer or their equivalents, of foreign-owned registered firms may be retained by foreign nationals for a longer period. All foreign employees may bring with them their spouses and unmarried children under 21 years of age. Special Investor's Resident Visa may be issued to aliens investing in at least US$ 75,000 in the Philippines thereby allowing them to reside in the Philippines as long as their investment is maintained. None

Location on less-developed areas (whether proposed or in an existing venture geared for expansion)

Additional Incentives : 1. The same set of incentives given to a pioneer registered enterprises; 2. A 100% deduction from its taxable income representing the necessary major infrastructure it may have undertaken in the course of its operation; and 3. An additional deduction from taxable income of 100% of the wages corresponding to the increment in the number of direct labor for skilled and unskilled workers in the year of availment as against the previous year is observed. None

Unlimited purchase and consumption of tax and dutyfree goods within the Freeport zones. Government Facilities for training laborers

None

None

Other incentives under the Presidential Decree No. 66 or those provided under BookVI of E.O. 226. Availment of inexpensive electrical power rates Availment of the lowest land lease rates in the country

None

Extends assistance on major manpower training of laborers to firms in the zones. The Technical, Education, Skills Development Authority (TESDA) conducts manpower training programs. In addition, the Labor Code grants incentives to firms engaged in labor training activities. None

None None

None None