Board of Investments and Philippine Economic Zone Authority
Source:
"How to Invest in the Philippines" by PricewaterhouseCoopers Philippines (printed with permission from author)

Registration requirements, application procedures and approval

1) Does our proposed project qualify for registration with the BOI/PEZA?

To qualify for registration with the BOI for incentive purposes, the proposed foreign investment must be made in any of the following:

a) preferred areas of investment listed in the current Investment Priorities Plan (IPP). A preferred area may be declared pioneer if it: (1) involves the manufacturing or processing (not merely assembly or packaging) of goods or raw materials that have not been produced in the Philippines on a commercial scale; (2) uses a design, formula, scheme, method, process or system of production or transformation of any element or raw material into another raw material or finished good which is new and untried; (3) engages in agricultural activities/services essential to the achievement of the country's self-sufficiency program; and (4) produces non-conventional fuels or manufactures equipment which utilize non-conventional sources of energy; provided that the final product in any of the foregoing instances involves substantial use and processing of domestic raw materials;

b) enterprises engaged in preferred non-pioneer areas and exporting at least 70% of their output; and

c) projects in less-developed areas provided that the activities in all of the above cases are not reserved for Philippine nationals.

On the other hand, the projects that may qualify for registration with PEZA are those that involve manufacturing for export and the domestic market, free trade, tourism, utilities, facilities enterprises including those engaged in warehousing and trading operations in the ecozones and development and operation of ecozones.

2) How does one file an application with the BOI/PEZA?

An application shall be made in the form prescribed by the BOI / PEZA in two (2) copies and properly sworn to before a notary public. A project feasibility study is required as one of the primary documents supporting the application for registration.

3) What possible obstacles would our application meet?

The obstacles normally encountered in the filing of applications include non-compliance with the criteria set by the BOI, misinterpretation of the coverage of activities listed in the IPP, failure to submit the required supporting documents and project feasibility study and possible opposition from sectors or enterprises which might be adversely affected by the proposed project. The BOI requires publication of the notice of application and conducts hearings if objections to the application are received.

For PEZA applicants, the usual problem consists of non-compliance with some of the criteria set by PEZA and failure to submit required documents and information.

4) How long will it take to obtain BOI/PEZA approval once all requirements are complied with?

Under the 1987 Omnibus Investments Code, applications filed with the BOI shall be considered automatically approved if not acted upon by the Board within twenty (20) working days from official acceptance thereof, subject to the usual terms and conditions.

In the case of PEZA, the processing and evaluation by the appropriate department usually takes about two weeks. The decision on the project is made during the bi-monthly meetings of the PEZA Board.

5) Assuming approval is obtained, what restrictions are ordinarily attached?

A list of general and specific terms and conditions is normally attached to the approval letter issued by the BOI/PEZA upon approval of the application for registration. The general conditions include certain management, financial, operational and marketing restrictions which must be properly complied with so as to avoid grounds for cancellation of registration. The specific terms and conditions which may include nationality, operational and reporting requirements vary depending upon the nature of the business enterprise.

6) How much time is an investor allowed to start his project?

The amount of time allowed for starting a registered project depends on the period set by the proponent, with the approval of the BOI/PEZA.