FOREIGN FIRMS AND THE BOARD OF INVESTMENTS Ryan Robert Flores Promulgated in 1987, the Omnibus Investments Code

of the Philippines outlined the general types and areas of investments meant to spur growth in the country seeking to recover from the economic stasis during the latter years of the Marcos Administration. EO No. 226 became the foundation upon which the Board of Investments (BOI) Investment Priorities Plan (IPP) was created, identifying the different clusters of business activities which are preferred to bolster economic growth. These activities are further classified as either pioneer or non-pioneer business activities: the former generally deals with the manufacturing, processing, transformation, or production of raw materials into goods, products or commodities which are unique to the company, and the same has never been manufactured, processed or produced in the country prior to the entry of the registered company into the Philippine market. Particular care must be paid in Article 32 of EO No. 226: There is no strict limit as far as foreign equity in the business concern or corporation is concerned, however, one must bear in mind that should the foreign equity exceed 40% of the business concern or corporation, it must comply with several requirements, namely: A.) That the business concern or corporation must engage in pioneer projects, or if at least 70% of its production is meant for exportation, the same may be reduced in meritorious cases. B.) That the business concern or corporation must obligate itself to attain the status of a Filipino National within thirty (30) years from the date of registration or longer depending on the amount of time required by the Board. Entities exporting 100% of their total production need not comply with this requirement. C.) That the pioneer area is not among those reserved by the Constitution exclusively for Filipino citizens, and corporations owned and controlled by Filipino citizens. For foreign-owned/controlled firms, they may be registered with the Board of Investments if they propose to conduct a business activity which is considered as pioneer, they may opt to propose a nonpioneer business activity, however, the law imposes a 70% export requirement for these activities. The pursuit of certain agricultural, forestry, industrial food production, or mining activities is likewise included in the IPP. Should your business activity fall in any of the categories outlined by the current IPP, then investing in such a business, upon your registration to the BOI, would yield incentives for your business.