Omnibus Investments Code of 1987

BOI implements Books One to Five of the Code.
Composed of seven governors including the Secretary of Trade and Industry as Chairman and designated undersecretaries and representatives.
Governors must be Filipino citizens, at least 30 years old, and competent in relevant fields.
The Board appoints technical and other personnel under Civil Service rules.
Powers include preparing the Investment Priorities Plan, approving registrations, hearing disputes, recommending foreign employment, monitoring compliance, regulating investments, and submitting annual reports.
The Chairman presides meetings and reports to the President, and recommends policies.
The Vice-Chairman manages the Board’s operations and assists investors.

Registered Enterprise: An entity incorporated under Philippine law and registered with the BOI, excluding financial institutions and cooperatives primarily involved in deposit/lending activities.
Pioneer Enterprise: Engaged in new manufacturing or processing goods not previously produced locally, uses new technologies, or engages in agriculture, forestry, mining aligned with national goals.
Non-Pioneer Enterprise: Registered enterprises not meeting pioneer criteria.
Investment Priorities Plan (IPP): Annual plan identifying preferred economic activities with eligibility for incentives, based on economic, technical, and social criteria.
Tax Credit: Certificate against taxes and duties, valid for 10 years, non-taxable income.
Export Products and Export Sales: Defined with eligibility criteria involving local content, quality standards, export value thresholds, and sales documentation.

BOI submits IPP to the President annually, listing preferred investment areas.
Inclusion requires economic, technical, and financial soundness plus contribution to national development.
The President approves or returns the IPP with directives for synchronized implementation.
Applications for registration must demonstrate Filipino ownership majority or meet pioneer project conditions.
The Board evaluates applications based on ownership, economic return, measured capacity, foreign exchange impact, use of local resources, technology application, and diversification.
Registrations are confirmed with issuance of a certificate detailing the enterprise and terms.
Appeals from Board decisions may be made to the President within 30 days.

Investors have rights to repatriate investments and earnings, remit payments on foreign loans and contracts subject to laws.
Expropriation or requisition shall be for public use with just compensation.
Compensation to foreign investors is remittable in the original currency and prevailing exchange rate.

Income Tax Holiday: Pioneer firms get 6 years and non-pioneer 4 years, with possible extensions.
Additional Deduction for Labor Expenses, doubled in less-developed areas.
100% exemption from customs duties and national internal revenue taxes on imported capital equipment if conditions are met.
Tax credit on domestic capital equipment purchasE.
Exemptions from contractor's tax, customs simplifications, unrestricted consigned equipment use.
Permission to employ foreign nationals in certain positions with training requirements for Filipinos.
Tax exemption for breeding stock and genetic materials imports and tax credits for domestic purchases.
Tax credit on taxes and duties paid on raw materials for export products.
Access to bonded manufacturing/trading warehouse systems for export-oriented enterprises.
Exemptions from wharfage dues and export taxes on non-traditional export products.

Registered enterprises in less-developed areas get pioneer incentives regardless of project type.
Additional deduction from taxable income equal to 100% of approved infrastructure work costs.

The President can rationalize incentives and extend periods or increase tax exemptions.
The BOI may require refunds and impose penalties for cancellation of registrations.
Incentives apply only to registered portions of enterprises.

Foreign investments are regulated to not exceed 40% ownership without BOI approval, except in registered enterprises compliant with Book One.
Foreign firms must secure licenses to do business in the Philippines and meet conditions, including appointment of resident agent and establishment of a local office.
Violation of licenses can lead to cancellation or fines.
The BOI monitors compliance and reports to the President.

Foreign entities may establish regional headquarters after securing SEC license on BOI recommendation.
Regional headquarters must act as coordinating centers, not derive income locally, and remit minimum funds annually.
Expatriate personnel receive special visas, are exempt from certain fees, and are subject to a 15% withholding tax on income from the headquarters.
Headquarters enjoy income tax exemption, exemption from contractor's tax, and local taxes.
They are entitled to tax and duty-free importation of training materials and vehicles within limits.

Multinational companies with regional headquarters can establish regional warehouses for spare parts and components supply in Asia-Pacific.
Warehouses must be licensed by BOI and supervised by Bureau of Customs.
Goods imported for storage and re-export receive exemptions from duties, taxes, and local taxes under conditions.
Withdrawal for local market subjects goods to applicable taxes and customs duties.
Rules for operation and control of goods in regional warehouses are jointly issued by BOI and Customs.
Violations can lead to license cancellation and penalties.

Aliens investing at least US$75,000 may be issued Special Investors Resident Visas, subject to health and moral standards.
Visa holders must submit annual reports proving maintenance of investment; withdrawal of investment leads to visa expiration.

Export processing zone enterprises are allowed to employ foreign nationals under conditions.
Foreign and domestic merchandise in zones enjoy exemption from customs and local taxes.
Exports from zones receive exemptions; imports are subject to tariff laws.
Zone enterprises enjoy major incentives similar to registered enterprises including exemption from local taxes (except real estate tax), specific exemptions for machinery.

Doubts over benefits resolved in favor of investors.
Existing enterprises under prior laws retain vested rights.
Applications and documents under the Code are confidential.
Board orders are executory; appeals go directly to Supreme Court within 30 days.
BOI to promulgate implementing rules and can impose fines for non-compliance.