How to Register with the BOI – Philippines
The Board of Investments (BOI) is an investment promotion agency that grants tax incentive packages to local and foreign businesses operating in the Philippines. It aims to help the Philippine government promote inbound investments and economic growth by attracting investors and entrepreneurs to venture capital and set up businesses in the country.
The BOI operates under the authority of the Department of Trade and Industry (DTI) and is mandated through the Omnibus Investments Code (Executive Order No. 226) to provide tax exemption and other incentives to registered enterprises that engage in activities enumerated in the Investment Priorities Plan (IPP) – which is a list of areas of investments eligible for government incentives.
Incentives and Benefits of BOI Registration in the Philippines
BOI-registered companies in the Philippines are entitled to numerous fiscal and non-fiscal incentives (under E.O. No. 226), including but not limited to the following:
- income tax holidays
- six (6) years for projects with pioneer status and for projects located in a Less Developed Area (LDA)
- four (4) years for new projects with non-pioneer status
- three (3) years for expansion/modernization projects
- duty exemption on imported capital equipment, spare parts, and accessories
- exemption from wharfage dues and export tax, duty, impost, and fees
- tax exemption on breeding stocks and genetic materials
- tax credits on imported raw materials
- tax and duty-free importation of consigned equipment
- additional deduction for labor expense
- employment of Foreign Nationals
- simplification of customs procedures for imported products
- importation of consigned equipment
- privilege to operate a bonded manufacturing/trading warehouse (subject to custom rules and regulations)
BOI Eligibility Requirements
Wholly Filipino-owned enterprises are eligible to register for BOI incentives if they engage or propose to engage in an activity listed in the current IPP. They are allowed to engage in any domestic-oriented activity included in the IPP regardless if it is classified as a pioneer project or not.
Domestic foreign corporations (those that are 100% foreign-owned) can avail of incentives if they engage in pioneer projects and satisfy any of these qualifying requirements:
- at least 70% of services or products are for export, or
- proposed projects are to be undertaken in areas that are listed as less-developed areas (LDAs) by the BOI
These enterprises are obliged to attain 60% Filipino ownership within thirty (30) years from registration unless they export or are planning to export 100% of their production. Notable samples of enterprises that export 100% of their goods or services are Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO), Legal Process Outsourcing (LPO), Call Center Agencies, and Outsourcing companies.
For enterprises that intend to engage in non-pioneer projects, foreign ownership is limited to 40%, unless the enterprise will export more than 70% of its annual production.
Requirements for Registering with BOI
- SEC Certificate of Registration – including Articles of Incorporation and By-Laws for Domestic Corporations, Partnerships, Branch Offices, Representative Offices, and Regional Headquarters; or DTI Certificate of Registration for Sole Proprietorships
- Audited Financial Statement (feasibility report that contains projected financial reports for the next five (5) years) and Income Tax Return (for the past three (3) years if applicable)
- Board Resolution of a duly authorized company representative/signatory
- Accomplished BOI Application Form 501 (has various versions per industry sector) and Project Report (a report that contains activities listed or are related to those listed in the IPP)
BOI Registration Process
- File BOI Application Form 501 along with supporting documents and filing fee
- Prepare Evaluation Report (including Publication of Notice of Filing of Application and plant visit)
- Present to the BOI Management Committee
- Receive confirmation and letter advice from the BOI Governing Board regarding Board Action
- Letter advice to Applicant of Board Action
- If approved, send letter of approval and comply with pre-registration requirements
- Pay Registration Fee
- Secure Certificate of Registration from BOI
The usual processing time is ten (10) to twenty (20) working days – depending on the type of business entity you plan to register, the nature of your proposed activities, and the time it takes for BOI’s Management Committee to review your application.
If you want a more comprehensive list of the latest applicable incentives per industry sector, you can access the current government-issued Investment Priorities Plan (IPP) here.
Assess your eligibility for tax incentives in the Philippines
The Philippine government provides tax incentive programs to local and foreign investors that express interest in setting up businesses in the country. Our team of business consultants and lawyers can facilitate your application for tax incentives and maximize the number of incentives you can enjoy.