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BOI Registration in the Philippines
Many foreign companies setting up outsourcing operations (IT-BPO, call center, or IT companies) in the Philippines may opt to register with BOI for tax incentives. Many existing foreign-owned outsourcing companies are BOI-registered. Our team of experts and consultants will determine eligibility for BOI registration and organize all financial documents to be processed at BOI.
BOI – Board of Investments
The Board of Investments (BOI) provides tax breaks and other incentives to registered entities that engage in activities identified as investment priorities or those which promote the general economic development of the Philippines and those that are export-oriented (where export is more than 50% of production or 70% if the enterprise is more than 40% owned by foreign investors). The BOI, in consultation with the public sector, comes up with an Investment Priorities Plan listing these industries.
The main advantage for an eligible BOI-registered firm are 4 to 8 year income tax holidays and 4 to 6 year exemption from local business taxes for pioneer and non-pioneer industries. To be eligible for BOI incentives, foreign investors will need to have an equity investment in a Philippine corporation.
Pioneer and Non-pioneer projects have different requirements. 100% foreign-owned enterprises may avail of incentives if they engage in pioneer projects, export at least 70% of their total production, or undertake projects in less-developed areas of the country as identified by the BOI. These enterprises are obliged to attain 60% Filipino ownership within 30 years from registration unless they export or will be exporting 100% of their production. For enterprises engaged in non-pioneer projects, foreign ownership is limited to 40%, unless the enterprise will export more than 70% of its annual production.
Applying for BOI requires submission of a notarized application indicating the type of projects, how the activity relates to those listed in the Investment Priorities Plan, the production capacity geared to export, the capital structure of the enterprise, and the nationality of its investors. In addition, the company must submit a feasibility report, containing five-year projected financial statements.
K&C will perform the following:
- Determine eligibility for BOI
- Process all required documents for BOI
- Identify a BOI building for you
- Register your new company with BOI
BOI REGISTRATION in the Philippines FAQs
What are the requirements for BOI registration in the Philippines?
The requirements for BOI registration in the Philippines are as follows:
- SEC Certificate of Registration
- Articles of Incorporation and Bylaws
- Audited Financial Statement (feasibility report that contains projected financial reports for the next 5 years)
- Income Tax Return for the past 3 years, if applicable
- Board Resolution of a duly authorized company representative/signatory
- Accomplished BOI Application Form 501 (has various versions per industry)
- Project Report (which shall contain activities listed or are related to those listed in the Investment Priorities Plan [IPP])
How can startups/businesses benefit from BOI registration in the Philippines?
Startups and other types of businesses can benefit from BOI registration in the Philippines through the following:
- Income tax holidays of six, four or three years
- Duty exemption on imported capital equipment, spare parts, and accessories
- Tax credits on imported raw materials
- Tax exemption on breeding stocks and genetic materials
- Additional deduction for labor expenses
- Simplification of customs procedures for imported products
- Employment of and visa privileges to foreign employees
- Privilege to operate a bonded manufacturing/trading warehouse (subject to custom rules and regulations); and many others
Who are eligible for BOI registration for tax incentives in the Philippines?
The eligibility criteria for BOI registration in the Philippines are as follows:
- For wholly Filipino-owned enterprises, they must currently engage or propose to engage in an activity listed in the current IPP
- For wholly foreign-owned corporations, they must fulfill the following: a) engage in pioneer projects of the BOI; b) at least 70% of their services/products must be for export; and c) their proposed projects must be undertaken in areas listed as less-developed areas (LDAs) by the BOI