The Board of Investments (BOI) serves as a vital investment promotion agency in the Philippines. It aims to foster economic growth by attracting both local and foreign investors in the Philippines. It offers various incentives to businesses that meet specific criteria, particularly those listed in the Investment Priorities Plan (IPP).
In this article, we will guide you on how to register your company with the BOI. We will cover eligibility, required documents, and the registration process so you can reap all the benefits of being a BOI-registered company.
How is a BOI Company in the Philippines Different from Other Businesses?
What is a BOI Registration in the Philippines for a Company?
BOI registration in the Philippines is a crucial process where you can benefit from various government perks aimed at promoting investment and economic growth. As a business owner, registering your company with the BOI offers several benefits that can significantly impact your business’ financial performance, including:
- Income Tax Holidays – you can enjoy income tax holidays ranging from three to eight years, depending on their project classification:
- Pioneer Projects – Eligible for up to eight years of tax holidays. Pioneer projects are defined as industries that introduce new technologies or processes that have not been previously utilized in the Philippines. These projects are critical for economic development as they can stimulate innovation and create new industries.
- Non-Pioneer Projects – Typically receive four years. Non-pioneer projects refer to industries that do not introduce new technologies but still contribute to economic growth.
- Expansion Projects – May qualify for three years. Expansion projects involve increasing the capacity or output of existing operations. These can include upgrading facilities, adding new product lines, or enhancing production processes.
- Pioneer Projects – Eligible for up to eight years of tax holidays. Pioneer projects are defined as industries that introduce new technologies or processes that have not been previously utilized in the Philippines. These projects are critical for economic development as they can stimulate innovation and create new industries.
- Non-Pioneer Projects – Typically receive four years. Non-pioneer projects refer to industries that do not introduce new technologies but still contribute to economic growth.
- Expansion Projects – May qualify for three years. Expansion projects involve increasing the capacity or output of existing operations. These can include upgrading facilities, adding new product lines, or enhancing production processes.
- Duty Exemptions – including import duties for capital equipment, spare parts, and accessories necessary for their operations.
- Tax Exemptions on Breeding Stocks – if you’re in the agribusiness industry, you can import breeding stocks and genetic materials without tax liabilities.
- Tax Credits – your company may receive tax credits on imported raw materials used in production.
Permitted BOI Industries in the Philippines
As an agency under the Department of Trade and Industry (DTI), BOI operates under the Omnibus Investments Code. It outlines the Investment Priorities Plan (IPP) which identifies priority sectors and industries eligible for investment incentives. If you are in any of the following industries, your company may be qualified for BOI registration:
- Manufacturing and processing – involves a wide range of activities, including the production of consumer goods, electronics, automotive parts, and chemicals. This sector is crucial for economic development as it creates jobs and contributes to export revenues.
- Infrastructure and Utilities – includes projects related to public infrastructure such as roads, bridges, airports, and utilities like water supply and electricity generation. The BOI encourages investments in infrastructure to improve the country's overall competitiveness and quality of life.
- Agribusiness – covers activities related to agriculture, including farming, processing, and distribution of agricultural products. This sector is vital for food security and rural development.
- Tourism – includes hotels, resorts, travel agencies, and other services that cater to tourists. Given its potential for job creation and foreign exchange earnings, the BOI actively promotes investments in tourism-related projects.
- Health and Wellness – encompasses healthcare services, wellness centers, and medical facilities. The BOI recognizes the growing demand for health services and supports investments in this area through incentives aimed at improving healthcare access and quality in the Philippines.
- Information Technology-Business Process Management (IT-BPM) – one of the fastest-growing industries in the Philippines, including call centers, software development, and IT services. The BOI encourages investments in this sector due to its significant contribution to employment and economic growth.
- Research and Development – crucial for innovation and technological advancement. The BOI supports R&D initiatives by offering incentives that encourage companies to invest in new technologies and processes.
- Export-oriented Enterprises – Firms that primarily focus on exporting goods or services are also eligible for BOI registration. These enterprises must ensure that at least 70% of their output is intended for export markets.
BOI Registration Requirements in the Philippines
BOI registration requirements may vary depending on the ownership structure of your company. Wholly Filipino-owned enterprises can engage in any domestic-oriented activity included in the IPP, regardless of whether it is classified as a pioneer project. Foreign-owned companies, on the other hand, must engage in pioneering projects, ensure at least 70% of their products or services are for export, and operate in designated as less-developed areas (LDAs) by the BOI.
When applying for BOI registration, you must prepare the following documents:
- SEC Certificate of Registration – required for domestic corporations, partnerships, branch offices, and representative offices. Sole proprietorships need a DTI Certificate of Registration.
- Articles of Incorporation and Bylaws – Necessary for domestic corporations and partnerships.
- Audited Financial Statement – includes a feasibility report projecting financial performance over the next five years.
- Income Tax Return – For the past three years, if applicable.
- Board Resolution – From a duly authorized representative of the company.
- BOI Application Form 501 – this form varies by industry and must be fully accomplished.
- Project Report – Detailing activities related to those listed in the IPP.
Understanding the complexities of obtaining each of these documents, Emerhub can make it easier for your company to navigate the complex BOI registration process. We provide tailored guidance required for your business type, we can help prepare all the requirements and facilitate communication with the BOI so you can focus on your core business operations and maximize potential tax incentives.
How to Register your Company with BOI in the Philippines?
As part of compliance under the Omnibus Investment code, your company needs to be registered with the BOI to enjoy tax benefits and exemptions. Together with Emerhub, we can streamline this process by helping you gather all the necessary documents, liaise with the authorities, and provide post-registration support. Here is how we can help you register your business with the BOI in the Philippines:
1. Filing the BOI Application Form 501
To initiate the registration process, you must submit the completed BOI Application Form 501 along with all supporting documents required for your specific industry. Ensuring that all documents are accurate and complete is crucial to avoid delays, Emerhub will help you gather all the essential documents:
- SEC Certificate of Registration (or DTI Certificate for sole proprietorships)
- Articles of Incorporation
- Project report
2. Preparation of Evaluation Report
Once your application is submitted, the BOI will prepare an Evaluation Report. This report includes publishing a notice of your application filing in a local newspaper and conducting a plant visit to assess your business operations. The evaluation process is essential for determining whether your project aligns with the Investment Priorities Plan (IPP) and meets the necessary criteria for BOI registration.
After the evaluation report is prepared, your application will be presented to the BOI Management Committee. This committee reviews all submitted applications and evaluation reports to decide whether to approve or deny the registration. It is critical that you provide any additional information or clarification requested during this review process.
3. Confirmation from BOI Governing Board
Following the committee's review, you will receive a letter of advice from the BOI Governing Board regarding their action on your application. This letter will inform you whether your application has been approved or if further information is needed. Knowing that this is a critical process in registering your business with the BOI, Emerhub can facilitate communication and keep you updated with the progress of your registration.
4. Issuance of Certificate of Registration
After completing all previous steps and payments, you will receive your official Certificate of Registration from the BOI. This certificate formally recognizes your company as a registered entity under BOI regulations, allowing you to access various incentives designed to support business growth and development in the Philippines.
Note: you will need to pay the registration fee to finalize your application. The fee amount may vary depending on the nature of your business and should be confirmed with the BOI during the application process. The BOI registration process typically takes between 10 to 20 working days, depending on various factors such as business type and document completeness.
Navigating the complex BOI registration process in the Philippines can be daunting for many companies. With all the documents and pre-requisites needed, it can be an overwhelming experience to liaise with all the government authorities and gather all documents. Emerhub lets you streamline this process and lets you focus on what really matters: your company’s core operations.
Kickstart your BOI registration in the Philippines with Emerhub. Fill in the form with your details below and our expert team will get in touch with your inquiries.