Tax Exemptions and Perks: How to Register Your Business in the Board of Investments (BOI) in the Philippines

There are a lot of business opportunities in the Philippines. Whether local or foreigner, you can take advantage of possible economic growth. And for certain businesses, you can even be exempted from taxes! 

What are your options?

 

PEZA vs BOI

Most companies register with the Philippine Economic Zone Authority (PEZA) for this purpose. But with the majority having to abide by the “in-office residency requirement,” it is quite hard to attract employees who were remote working during the pandemic. 

“Why work from the office if you can be productive at home?” as some may say.  The BPO industry experienced mass resignation because of this. That’s why the Fiscal Incentives Review Board (FIRB) proposed a solution to transfer companies from PEZA to BOI (Board of Investments).

And if you’re planning to take advantage of these benefits, you might consider registering at the BOI directly.

 

Incentives of BOI

The incentives of BOI are quite similar to PEZA. The main difference is the residency requirement. You can still enjoy the perks of BOI even if your employees work from anywhere. Here are the Incentives of BOI:

• Income tax holiday (ITH) of 4 to 6 years
• Special corporate income tax (SCIT) rate of 5% based on gross income in lieu of national and local tax rates for five to 10 years
• Enhanced Deductions for lower income tax
• Value-added tax (VAT) zero-rating and exemptions on importation or local purchases of goods and services directly and exclusively used on the registered project.
• Duty exemption on imported capital equipment, raw materials, spare parts, or accessories

With this, you can definitely grow your business faster! 

 

Eligibility Requirements

Unfortunately, not all businesses are eligible for the incentives. Here are the eligibility requirements.

• Your activities are included in BOI’s Strategic Investment Priority Plan (SIPP). Here are also the preferred activities, export activities, and special laws for the industries eligible for the benefits.

For businesses that don’t fall within the scope of the list above, you should have:

• At least 50% of the production for export (for enterprises with more than 60% Filipino- 40% foreign ownership); or
• At least 70% of production for export (for enterprises with more than 40% foreign ownership); or
• Your office is in Less Developed Areas (LDAs).

 

Documentary Requirements

If you qualify, you just need to prepare and pass the following requirements.

Enterprises must accomplish the following documents when registering with BOI:

• SEC Certificate of Registration (Corporation) 
• Articles of Incorporation and By-Laws (Corporation)
• Audited Financial Statement and Income Tax Return for the past 3 years or within the duration of its existence (corporations operating for less than 3 years) for existing firms
• Sworn Statement of Assets & Liabilities of Major Stockholders for new corporations
• Feasibility Report with Projected Financial Reports for the Next 5 Years
• Board Resolution authorizing an officer to transact, execute, and sign on behalf of the firm.
• Proof of publication of the “Notice of the filing of Application”
• Project Report (a report that contains activities listed or is related to those listed in the SIPP)
• Other documents required under the specific SIPP activity

 

Where to Register

Depending on your business structure, you can apply to your designated department. Check this link for more information.

 

Steps to Register

Filing your application is quite straightforward. 

1. First, Fill up the BOI Application Form (choose the appropriate industry) and file it with the supporting documents above.
2. Pay the filing fee.
3. Prepare the evaluation report with the publication of “Notice of Filing of Application” as well as the Plant visit.
4. Present the Documents above to the BOI Management Committee
5. You will receive a confirmation and letter advice from the BOI governing board
6. Submit the letter advice to application of board action
7. Submit the letter of approval with the pre-registration requirements
8. Pay the registration fee.
9. You will receive the Certificate of Registration from BOI.

Usually, it takes around 10 to 20 working days for the registration. Depending on the type of industry, there might be additional requirements upon registration.

 

Conclusion

There you have it! With the BOI registration, you can now enjoy the perks and benefits of your business. 

If you need Filipino talent, you can also get the best remote contractors in the Philippines by viewing our candidates. 

Call us or schedule a callback today! Cheers!