Where does one apply for registration of investments?
For Single/Sole Proprietorship - Submit an application, together with the required documents, to the Bureau of Trade Regulation and Consumer Protection (DTI-BTRCP), an office under the Department of Trade & Industry.
2nd Floor, Trade and Industry Bldg.
12F Trafalgar Plaza, 105 H.V. Dela Costa St.
2. Any of the DTI Provincial offices if outside Metro Manila.
For Corporations/Partnerships, Branch and Representative Offices - Submit application forms together with required documents at the Securities and Exchange Commission (SEC).
For Regional Headquarters and Regional Operating Headquarters - Submit application form together with required documents at the Board of Investments.
When can foreigners do business or invest in a domestic enterprise up to 100% of its capital?
If the proposed activity he intends to venture in is not among those listed in the FINL.
Employment of at least 50 direct employees.
What requirements must be complied with before an enterprise can enjoy tax benefits?
Other specific criteria as provided for in the current IPP.
What incentives are available to registered enterprises?
Modernization projects for three (3) years, as a general rule, exemption is limited to incremental sales revenue/volume.
Exemption from wharfage dues and export tax, duty, impost and fees.
The capital equipment incentive provided under the E.O. No. 313 shall be availed of by the registered enterprise for a period of two (2) years from its effectivity or until 06 June 2006.
Certain non-fiscal incentives are also available to the registered enterprise, among which are: employment of foreign nationals; guaranteed repatriation of foreign investments and earnings thereon; and importation of consigned equipment for an unlimited period subject to the posting of re-export bond.
Assistance in the promotion of economic zones to local and foreign locator enterprises.
What are the various types of business structure options can I choose from in setting up a business?
You may set up your business under a variety of organizational structures known as single proprietorship, partnership, corporation, branch office, representative office, regional headquarters and regional operating headquarters.
What are the investment rights of a former natural born Filipino?
What are the incentives given to expats working for RHQ/ROHQ?
What are the basic rights and guarantees given for the safety of foreign investments?
In the case of foreign investments, the right to repatriate the entire proceeds of the liquidation of the investment in the currency in which the investment was originally made at the exchange rate prevailing at the time of repatriation.
In the case of foreign investments, the right to remit earnings from the investments in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance.
There shall be no expropriation by the government of the property represented by the investments or of the property of enterprises except for public use or in the interest of national welfare and defense and upon payment of just compensation. In such cases, foreign investors of enterprises shall have the right to remit sums received as compensation for the expropriated property in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance.
There shall be no requisition of the property presented by the investment or of the property of enterprises, except in the event of war or national emergency and only for the duration of such. Just compensation for the requisitioned property may be remitted in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance.
What are the activities that an RHQ/ROHQ can engage in?
The activities of the RHQ are limited to acting as a supervisory, communications and coordinating center for its subsidiaries affiliates and branches in the region.
It is neither allowed to derive any income from sources in the Philippines and to participate in any manner in the management of any subsidiary or branch office it might have in the Philippines nor to solicit or market goods and services whether on behalf of its mother company or its branches, affiliates, subsidiaries or any other company.
Importation of brand new motor vehicle but subject to payment of taxes and duties.
ROHQ is allowed to offer qualifying services only to its affiliates, branches or subsidiaries as declared in its registration with the Securities and Exchange Commission (SEC). It is not allowed to directly and indirectly solicit or market goods and services whether on behalf of their mother company, branches, affiliates, subsidiaries or any other company.
I'd like to know more about Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA) Registrations?
Foreign-owned firms, whose ownership exceeds 40% of the outstanding capital stock and which proposes to engage in domestic-oriented activities, may be entitled to incentives if the proposed activity is listed in the current IPP and qualifies as Pioneer.
The Special Economic Zone Act of 1995 as amended, mandates the PEZA to operate, administer, manage and develop Special Economic Zones or Ecozones.
Enterprises that may qualify for registration with PEZA are those that will manufacture and export 100% of their production. Permission has to be sought if the enterprise located within the zone will export below 100% and in most cases PEZA has allowed 30% of production in the domestic market.
There are 98 operating proclaimed Special Economic Zones in the country.
How does a company remit its profits and dividends and repatriate capital abroad?
Enterprises seeking to remit its profits and dividends or repatriate its capital abroad may register their inward remittance with the Bangko Sentral ng Pilipinas (BSP) after registration with the SEC or BTRCP. For this purpose, BSP rules and regulations covering procedures for registration of foreign investments are observed.
How do these business structures differ from one another?
Single/Sole Proprietorship is a business structure owned by an individual who has full control/authority of his own and owns all the assets, personally owes and answers all liabilities or suffers all losses and enjoys all the profits to the exclusion of others. Must apply for a Business Name with the Department of Trade and Industry.
Apply to the nearest DTI-regional/provincial offices.
Apply to the ARMM-DTI Regional Office or Provincial Office.
Partnership is treated as a juridical person having a separate legal personality from that of its members. It may either be general or limited, depending on the liability of the partners. It consists of two (2) or more partners. A partnership must register with the Securities Exchange Commission (SEC) with a minimum capitalization of three thousand pesos (Php 3,000.00).
Corporation is a juridical person established under the Corporation Code and is regulated by the SEC with a personality separate and distinct from that of its stockholders. It consists of at least five (5) to fifteen (15) incorporators each of whom must hold at least one share. It must be registered with the Securities Exchange Commission (SEC). The minimum paid-up capital is five thousand pesos (Php 5,000.00).
Branch Office is an extension of a foreign enterprise and has no separate and independent legal personality. It can carry out the business activities of its head office and may derive income from the Philippines. It is required to inwardly remit US$200,000.00 to the Philippines as its assigned capital.
Representative Office is one which deals directly with the clients of its parent company in the Philippines, but may not derive income from the Philippines. It undertakes activities such as information dissemination, communication center, promotion of the company's products, as well as quality control. It is required to have an initial remittance of at least US$30,000.00 working capital into the Philippines.
Can a foreign investor be allowed to own 100% of a business entity?
Yes, one hundred percent (100%) foreign equity may be allowed in all areas of investments under the Foreign Investments Act (FIA) except financial institutions and those included in the Regular Foreign Investment Negative List (FINL).
What are the areas of investments covered by Foreign Investments Act (FIA)?
The FIA covers all investment areas except banking and other financial institutions, which are governed and regulated by the Bangko Sentral ng Pilipinas (BSP).
Advertising, ownership of land, operation and management of public utilities, etc., where only minority foreign ownership is prohibited.
List B: refers to areas that are defense-related, those with adverse effects on public health and morals and domestic market enterprises with paid-up capital of less than US$200,000, provided they involved advanced technology as determined by the Department of Science and Technology (DOST) or directly employ at least fifty (50) employees, in which case, the paid-up capital shall be lowered to US$100,000 only to non-Philippine nationals.
As an investor, what visa can be issued to me?
He has not been convicted of a crime involving moral turpitude.
He is not afflicted with any loathsome, dangerous or contagious disease.
He has not been institutionalized for mental disorder or disability.
He is willing and able to invest the amount of at least US$75,000.00 in the Philippines.
COMPANIES ENGAGED IN THE MANUFACTURING AND SERVICE SECTORS.
COMPANIES TO BE ENGAGED IN IPP PROJECTS.
Foreign stockholders, investors, representatives of investment houses, land developers and tourism developers are among the categories entitled to the special visa incentive, which grants privileges to certain foreign nationals.
Aliens entitled to enter the country under the provision of a treaty of amity, commerce and navigation may be admitted as non-immigrants. They are given treaty-trader visas for the sole purpose of carrying on substantial trade between the Philippines and the state of which they are nationals.
Foreign technicians may be admitted to the Philippines with a pre-arranged employment visa if their employers can prove that the skills they possess are not available in the country.
Foreign nationals may come to the Philippines for reasons of business, pleasure or health with a temporary visitor's visa. This visa allows stays for periods of 59 days, extendable for a maximum of one year. To extend their stay, visitors must register with the Bureau of Immigration or with the office of the municipal or city treasurer in areas outside Manila. Executive Order No. 408 allows foreign nationals, except those of specifically restricted nationalities, to stay in the Philippines for up to 21 days without a visa.
In general, a foreign national seeking employment in the Philippines, whether resident or non-resident, must secure an Alien Employment Permit (AEP) from the Department of Labor and Employment (DOLE). An AEP is valid for one year from the date of issue and may be renewed subject to the approval of the DOLE. Executives of area or regional headquarters and OBUs, as well as treaty trader visa holders, are exempt from the requirement to obtain alien employment certificates.
A local employer who wishes to employ a foreign national must apply on the foreign national's behalf with the DOLE for the permit. The petitioning company must prove that the foreign national possesses the required skills for the position and that no Filipino is available who is competent, able and willing to do the specific job for which the foreign national is desired.
To ensure a proper transfer of technology, the DOLE requires the employers of foreign nationals to provide an Understudy Training Programme (UTP) and to designate at least two Filipino understudies. The functions of these employers must be deemed permanent, and they must require skills or expertise that are scarce in the Philippines.