Question & AnswerQ&A (EXECUTIVE ORDER NO. 226)
The short title of the law is the Omnibus Investments Code of 1987.
To accelerate the sound development of the national economy, promote private Filipino and foreign investments, provide significant employment opportunities, increase productivity of resources, ensure holistic development, encourage private initiative, and provide fiscal incentives for projects contributing to economic development.
The Board of Investments is composed of seven governors: the Secretary of Trade and Industry, three Undersecretaries of Trade and Industry chosen by the President, and three representatives from other government agencies and the private sector appointed by the President.
A 'Registered Enterprise' is any individual partnership, cooperative, corporation, or entity incorporated or organized under Philippine laws and registered with the Board, excluding certain financial institutions and cooperatives engaged primarily in depositing or investing.
The applicant must be a Philippine national or meet specific conditions related to pioneer projects, engage in a preferred project listed or authorized, be capable of efficient operation contributing to national development, and maintain adequate accounting systems for preferred projects.
Pioneer registered enterprises are granted a six-year income tax holiday, additional deductions for labor expenses, tax and duty exemptions on imported capital equipment, tax credits on domestic capital equipment, and several other fiscal and non-fiscal incentives including employment of foreign nationals under specified conditions.
A pioneer enterprise is a registered enterprise engaged in manufacture or production of goods not previously produced commercially in the Philippines, uses new and untried processes, engages in specific agricultural or mining activities essential to national goals, or produces non-conventional fuels or related equipment.
A registered enterprise may employ foreign nationals in supervisory, technical, or advisory positions for up to five years from registration, extendable at the Board's discretion. Foreign nationals may retain executive positions if foreign investors hold majority ownership.
Violations include breaches of any provision of Books I & II, registration terms, or rules issued under the Code. Penalties include fines up to P100,000, imprisonment up to 10 years, disqualification from public office for government officials involved, and deportation for aliens if applicable.
The IPP is an overall plan prepared by the Board of Investments listing specific activities qualified for incentives. Its purpose is to identify preferred investment areas based on economic and technical soundness, and the President approves and ensures synchronized government implementation.