Question & AnswerQ&A (Republic Act No. 9728)
Republic Act No. 9728 is known as the "Freeport Area of Bataan (FAB) Act of 2009."
The policy is to actively encourage, promote, induce, and accelerate sound and balanced industrial, economic, and social development of the country through special economic zones to generate jobs, increase productivity and income, and improve living conditions.
The FAB covers the Municipality of Mariveles in the Province of Bataan.
FAB shall operate as a decentralized, self-reliant, self-sustaining industrial, commercial, agro-industrial, tourist, banking, financial and investment center with facilities to attract investments, provide incentives, maintain customs territory status, and ensure ecological balance and security.
Enterprises registered in the FAB are entitled to the existing fiscal incentives under Republic Act No. 7916 as amended, and Executive Order No. 226 as amended (Omnibus Investment Code).
No local or national taxes shall be imposed; instead, a five percent (5%) final tax on gross income is paid, distributed as follows: 1% to the National Government, 1% to the Province of Bataan, 1% to Municipality of Mariveles, and 2% to the FAB Authority.
The foreign national must invest US$150,000 or more, be at least 18 years old, not convicted of crimes involving moral turpitude, free from loathsome/dangerous diseases, and not institutionalized for mental disorder or disability.
The Authority of the Freeport Area of Bataan (AFAB), a body corporate created by this Act, manages and operates the FAB.
AFAB can manage properties, sue and be sued, operate and develop the FAB, regulate enterprises, coordinate with LGUs, authorize public utilities and services, raise funds, provide security, and protect the environment among other powers.
The Board consists of a chairman/administrator, a vice chairman, two national government representatives, one each from the Province of Bataan, the FAB district, Municipality of Mariveles, domestic investors, foreign investors, and workers in the FAB.
They serve six (6) years unless separated earlier due to death, resignation, or removal for cause.
Except for defense and security matters, in conflicts between AFAB and LGUs, the decision of AFAB prevails.
The BEZ is deemed abolished upon organization of the AFAB, with transfers of properties, personnel, assets, liabilities, and programs to the AFAB.
Security and perimeter defense of the FAB are the responsibility of the National Government in coordination with the AFAB and LGUs; AFAB may maintain security forces and firefighting capabilities.
Fiscal incentives last for a cumulative period of twenty (20) years from registration or operation start, with possible extensions for indispensable industries.
Goods can be sold domestically immediately but are subject to payment of applicable taxes; however, a negative list of industries is maintained to protect domestic industries and prohibit local sale.
DOF monitors tax incentives, maintains a database of incentives granted by AFAB, and submits an annual report to the President.
A labor center shall be established to settle disputes, interpret contracts, and monitor work, hygiene, and safety standards with offices for labor, health and safety, and inspections.
Existing banking laws and BSP regulations apply to banks and financial institutions established in the FAB.