Question & AnswerQ&A (EXECUTIVE ORDER NO. 226)
It is known as the Omnibus Investments Code of 1987.
The State encourages private Filipino and foreign investments in various sectors that provide employment opportunities, increase productivity, improve skills, contribute to economic development, among other policies to ensure holistic, competitive, and balanced economic growth.
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 private sector appointed by the President for four-year terms.
They must be Philippine citizens, at least 30 years old, of good moral character, and recognized competence in fields such as economics, finance, banking, commerce, industry, agriculture, engineering, law, management, or labor.
Any individual, partnership, cooperative, corporation or entity organized under Philippine laws and registered with the Board, excluding commercial banks, savings and mortgage banks, finance companies, cooperatives dealing primarily in deposits or securities, among others.
A registered enterprise engaged in manufacture, processing or production of goods not commercially produced in the Philippines, or using new methods or designs untried in the country, or in agriculture, forestry, mining, or producing non-conventional fuels with substantial use of domestic raw materials as determined by the Board.
A six-year income tax holiday from commercial operation, extendable up to eight years under prescribed conditions, tax and duty exemptions on imported capital equipment, additional deductions for labor expenses, and other fiscal incentives.
The Board processes and approves registration applications, imposes terms and conditions including refund of incentives when appropriate, requires performance bonds, and can cancel registration or suspend incentives for non-compliance or violations.
Incentives shall terminate after not more than 10 years from registration or start-up, unless otherwise specifically stated or extended under certain conditions by the Board and the President.
Investors or registered enterprises may appeal Board decisions within 30 days from receipt to the Office of the President. The Board's decisions become final and executory after 90 days if no appeal is filed.
Foreign investors may invest up to 40% in enterprises not registered under Book One; exceeding this requires prior Board authority subject to constitutional and economic considerations; investments must also be registered with the Central Bank and Board of Investments.
They must first secure a written certificate from the Board of Investments affirming that their operation aligns with the Investment Priorities Plan, contributes to national development, complies with laws, and does not promote monopolies or conflict with existing regulations.
Violations may be punished by fines up to ₱100,000 or imprisonment up to 10 years. Government officials aiding violations face maximum penalties and disqualification from public office; alien offenders may be deported.
A Special Investors Resident Visa is issued to aliens who invest at least US$75,000 (or lower in some cases), subject to qualifications including no criminal record, no disqualifying health conditions, and annual reporting requirements.
Exemption from income tax, contractor's tax, local taxes, and duty-free importation of personal effects and training materials; their foreign personnel may have multiple entry visas and certain tax exemptions.
An annual plan prepared by the Board of Investments listing specific economic activities and products that qualify for incentives, based on economic, technical, and financial soundness assessed by criteria set in the Code.
The Board determines measured capacity as the desirable additional production volume for the economy, ensuring no monopoly and that it reflects market and export potential for the declared preferred areas.
Applications are considered automatically approved if the Board does not act within 20 working days for Book One, and 10 working days for Book Two, from official acceptance of the application.
The registration is considered automatically cancelled unless reinstated by the Board of Investments.
They are entitled to pioneer incentives even if not classified as pioneer enterprises, and can deduct from taxable income 100% of necessary major infrastructure expenses with Board approval, with conditions on title transfer and carryover deductions.