2014 Investment Priorities Plan (IPP)

BPO Philippines BOI Registration IPPIn an effort to attract prospective investors in the Philippine economy, the Department of Trade and Industry (DTI) has submitted the 2014 Investment Priorities Plan (IPP) to Malacañang for approval last July 2014. Unlike previous years where the IPP changed on a yearly basis, the 2014 IPP will be valid until 2016 or 3 years.

The IPP identifies sectors and economic activities that can qualify for government fiscal incentives. The plan is based on recommendations from the government and private sectors.

This year, there are seven preferred economic activities that will benefit potential investors. These sectors are the following:

1. Manufacturing

• This covers motor vehicle assembly, engineered products such as body panel stamping and engines; chemicals including fertilizers, pesticides, oleochemicals, and petrochemicals, and derivatives.

2. Agro business and fishery

• This covers activities including extraction of natural ingredients, mechanized agricultural support services, and agricultural support infrastructure.

3. Services

• This covers integrated circuit (IC) design, ship repair, testing facilities, and charging stations for e-vehicles.

4. Economic and low cost housing

• This covers both horizontal and vertical housing development.

5. Energy

• This covers exploration and development of energy resources and power generation plants.

6. Public infrastructure and logistics

• This covers development in airports, seaports including RO-RO ports for both cargo and passengers. This may be limited to newly bought ships, aircraft, and seaplanes.

7. Public-Private Partnership (PPP) projects.

This year’s proposed IPP did not include some of the preferred activities included in the previous year, including creative industries or knowledge-based services, research and development, green projects, hospital and medical services, and disaster prevention, mitigation, and recovery projects.

Meanwhile, under existing laws, the following activities are also covered by the 2014 IPP. These are included in the mandatory list of the proposed IPP:

1. Industrial tree plantation
2. Mining, limited to capital equipment incentives
3. Oil refining
4. Storage and distribution of petroleum products
5. Tourism
6. Rehabilitation self-development and self-reliance of persons with disability
7. Publication and printing of books

Last year’s IPP included the exploration, mining, quarrying, and processing of minerals, which is revised in this year’s plan to only include capital equipment incentives. Likewise, the 2013 IPP covered clean water projects and renewable energy, both of which are not included in this year’s mandatory list.

There were no changes in the Exports list, which covers manufacturing of export products and exportation of services and activities in support of exporters. The 2014 proposed IPP also did not indicate the priorities in the Autonomous Region in Muslim Mindanao (ARMM).

Incentives

Once approved, prospective investors looking at establishing their presence in the Philippines will benefit from fiscal incentives and tax breaks, including three to eight year income tax holiday, as provided under the Omnibus Investments Code of 1987.

How to qualify for the incentives

To qualify for the 2014 IPP, an economic activity should meet these criteria:

1. Potential to create employment
2. Potential to move up the value chain
3. Potential to create horizontal and vertical spillover effects
4. Backward and forward linkages and output multipliers
5. Potential to create a competitive market

To learn if your company qualifies for this year’s IPP and to know the process of registering a business in the Philippines, contact Dayanan Business Consultancy for more information.

BPO Philippines BOI Registration

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 Philippines BOI Registration

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

BPO Philippines BOI Registration
BPO Philippines BOI Registration

 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

DBC is here to assist you with BPO, IT outsourcing, call center registration with the BOI. And any other Philippines Business Registration Contact us now