What requirements must be complied with before a foreign corporation can open office in the Philippines? developer estate in philippine real  

Before a foreign corporation can open an office in the Philippines, it must first secure the necessary licenses or registration certificates from the appropriate government bodies. Generally, the registration process starts with the Securities and Exchange Commission (SEC) developer estate in philippine real.

If the proposed project or activity qualifies for incentives, the foreign investor may file its application with the Board of Investments (BOI) or with the developer estate in philippine real Philippine Economic Zone Authority (PEZA) for registration under the 1987 Omnibus Investments Code Executive Order No. 226) or Republic Act 7916, as the case may be.

For the projects which will be located in the Subic Bay Free Port or the Clark Special Economic Zone, the applications shall be filed with the Subic Bay Metropolitan Authority (SBMA) or the Clark Development Corporation (CDC), respectively or developer estate in philippine real.

Is a foreign investor allowed to own 100% of the entity? developer estate in philippine real

developer estate in philippine real With the liberalization of the foreign investment law, 100% foreign equity may be allowed in all areas of investment except financial institutions and those included in the second regular Foreign Investment Negative List (FINL) embodied under Executive Order No.362 (effective October 24, 1996), developer estate in philippine real to wit:

developer estate in philippine real List A - areas reserved to Filipinos by mandate of the Constitution and special laws such as but not limited to:

developer estate in philippine real Mass media, practice of licensed profession, retail trade, cooperative and small scale mining, where foreign ownership is prohibited. developer estate in philippine real.

Advertising, ownership of land, public utilities and construction, where only minority foreign ownership is allowed developer estate in philippine real.

developer estate in philippine real List B - areas that are defense related, those with adverse effects on public health and morals and domestic market enterprises with paid in capital of less than US$200,000, unless they involved advanced technology or directly employ at least 50 employees, in which case, the paid in capital can be US$100,000 only.

What is the general policy of the government regarding foreign investments? Is this policy likely to change in the near future? developer estate in philippine real

developer estate in philippine real The government encourages foreign investments which will provide significant employment opportunities relative to the amount of the capital being invested; improve productivity of the resources; increase volume and value of exports; and provide a foundation for the future development of the economy.

developer estate in philippine real Investment-related rules have been liberalized to facilitate entry of foreign investments. This thrust is expected to continue for an extended period.

What are the major incentives available to a registered enterprise? developer estate in philippine real

developer estate in philippine real An enterprise registered with the Board of Investments is entitled to the following incentives, among others, subject to certain terms and conditions:

Income Tax Holidays (ITH) for six years for pioneer firms and generally four years for non- pioneer firms. If a non pioneer firm is located in less developed area, it shall generally be entitled to 6 years ITH. Firms locating within Metro Manila shall not be granted ITH unless they are:

Within a government industrial estate.

Service-type projects with no manufacturing facilities.

 Power generating plants, or exporters with expansion projects.

 Tax Credit on raw materials supplies, and semi-manufactured products.

 Additional deduction from taxable income for labor expense.

Additional deduction from taxable income for necessary and major infrastructure works.

Capital equipment incentives. developer estate in philippine real

developer estate in philippine real Certain non-fiscal incentives are also available to registered enterprises, among which are: employment of foreign nationals, guaranteed repatriation of foreign investments and earnings thereon, and importation of consigned equipment for an unlimited period subject to posting of a re-export bond.

developer estate in philippine real Up to December 31, 1997, new or expanding/modernizing enterprises may be authorized to import machinery, equipment and accompanying spare parts subject to a maximum 3% customs duty and to 10% VAT. During the same period, said enterprises shall be entitled to a certain amount of tax credit on the purchase of machinery, equipment and accompanying spare parts from domestic manufacturers.

developer estate in philippine real As provided in the Special Economic Zone Act of 1995, EP1ZA has evolved into the Philippine Economic Zone Authority (PEZA) which operates, administers, manages and develops Special Economic Zones or Ecozones.

developer estate in philippine real Business enterprises operating within Ecozones shall be entitled to the incentives previously granted to EPZA-registered enterprises under PD 66 or Book VI of EO 226. Furthermore, exporters using local materials, as inputs shall enjoy the same benefits provided for in the Export Development Act of 1994. Moreover, in lieu of paying all locals and national taxes, business enterprises within the Ecozone shall remit to the national government 5% of their gross income earned as final tax.

developer estate in philippine real Enterprises allowed to operate within the Subic Bay Freeport ( SBF) shall, in lieu of paying all other taxes, pay a final tax of 5% of gross income earned provided their income from local (non-export) sales shall not exceed 30% of their income from all sources. For additional information, please refer to our publication entitled Subic Bay Freeport, Philippines - A Guide for Foreign and Local Investors.

developer estate in philippine real Enterprises locating within the Clark Special Economic Zone (former American Airbase at Clark Field) and Poro Point Special Economic and Freeport Zone (former Wallace Air Station and its adjoining areas) are granted incentives similar to those given to SBF enterprises.