Tax incentives offered by the BOI to BPOs are another enticement to register a business in the Philippines. The Philippine government allows Business Process Outsourcing companies to file an application with the Board of Investments to register for tax incentives.
Multiple tax and non tax incentives are given to businesses in the IT / BPO sector. The major benefits are a four year income tax holiday (normal corporate income tax is 30%), exemption from 12% VAT, duty free importation of capital equipment and special visas for foreign employees.
BOI registration is comparable to dealing with any other Philippines government agency.
BPO’s in general qualify for BOI incentives. Only a domestic corporation may apply for incentives, a foreign branch office may not register with the Board of Investments. If the proposed activity is not listed in the BOI Investment Priority Plans (IPP), the main prerequisite is that the applicant export at least 50% of their products/services if Filipino owned and export at least 70% if foreign owned. Call centers and other IT related outsourcing business are required to invest a minimum of USD 2,500.00 per seat. As any BPO consultant knows, USD 2,500 is a small amount once you start adding up what is needed for an IT startup.
Documents to be Submitted to the BOI
1. Properly accomplished Application Form
2. Project Study/Project Report
3. Copy of the DTI Reg. (for sole proprietor) or SEC Cert. of Reg., Articles of Incorporation/Partnership, and By-laws (for partnerships and corporations)
4. Board Resolution authorizing an officer to transact, execute, and sign in behalf of the applicant enterprise
5. Proof of publication of the “Notice of the filing of Application”
6. AFS and ITR for the past 3 years or for the period the applicant has been in operation if less than 3 years (for existing firms); or Sworn Statement of Assets & Liabilities of Major Stockholders (for new corporations)
7. Other documents that may be required by the specific activity in the IPP
BOI Registration Process
1. Checklisting of application document
2. Publication of the NOTICE
2. Official filing
3. Evaluation of application / project
4. Presentation to the ManCom/Board for decision
5. Notify applicant of Board action
6. Compliance with the pre-registration requirements
7. Issuance of Certificate of Registration