Beruflich Dokumente
Kultur Dokumente
BOOK 1
Q: First Lepanto Ceramics, Inc. was registered as a non-pioneer enterprise with BOI in the
manufacture of glazed floor tiles. In a letter addressed to the BOI, First Lepanto rquested
for an amendment of its registered product to ceramic tiles in order to likewisw enable it to
manufacture ceramic wall tiles; However, Mariwasa and Fil-Hispano ceramics, Inc., filed
their separate complaints with the BOI against First Lepanto for violating the terms and
conditions of its registration by the use of its tax and duty free equipment in the
production of ceramic wall tiles and thus prayed for the cancellation of its certificate of
registration. Decide.
A: Under Art. 7(8), Chapter II of Omnibus Investment Act, BOI need not cancel the certificate of
a registrant found to have infringed the terms and conditions of its registration, otherwise it would
defeat the declaration of investment policies expressed in the law. Therefore, the decision of the
BOI to impose a fine and to allow the registrant to amend its certificate of registration that would
change the registered product, cannot be set aside by the courts since BOI is the agency tasked
with evaluating the feasibility of an investment project and to decide which invesment might be
compatible with its development plans. (First Lepanto Ceramics, Inc. v. CA 253 SCRA 552)
BOOK II
Q: Did the provisions in the Foreign Investment Law repeal the foreign equity requirement
in Book II of the Omnibus Investment Code to be denominated as a permitted investment?
Discuss.
A: Before the enactment of the Foreign Investment Law of 1991 (FIA 91), because foreign
equity in the enterprise will not exceed 40%, the enterprise is denominated as a permitted
investment under the Omnibus Investment Code. Under the Code, the enterprise may immediately
incorporate with directly with SEC without need of prior BOI authority.
Now the requirements of FIA 91 should be complied with, which operates under the policy
that except for those found in the Negative Lists, all areas of investments are opened to 100%
foreign equity Investment.
BOOK III
Q: Outline the amendments introduced by RA 8756 to Book III of the Omnibus Investment
Code (Regional or Area Headquarters, Regional Operating Headquarters)
A: The following are the changes introduced under RA 8756 to the provisions of the Omnibus
Investment Code pertaining to RHQ, thus:
a) Inclusion of term other foreign markets to expand the coverage from the original Asia-
Pacific Region for multinational corporations applying for incentives
b) Express provision that an RHQ shall not solicit or market goods and services whether on
behalf of its mother company or its branches, affiliates, subsidiaries or any other company
c) Amendments and changes in available incentives to RHQ, thus:
Removal of the exemption from contractors tax;
Expressly exempting RHQ from the payment of VAT;
Now subjecting RHQ the real property tax on land improvements and equipment;
On the importation of new motor vehicles, removing the need to secure prior BOI
approval and also of the following conditions: (1) that the said motor vehicle shall be for
the exclusive use of its expatriate executives; (2) that the number thereof shall not exceed
the number of its expatriate executives; and (3) that such motor vehicles may be replaced
every three years from their importation
Granting to Filipinos employed by RHQ and occupying the same positions as those
aliens employed by multinational companies, the option of availing of the same tax
treatment of being subjected to withholding tax of 15% gross income on the salaries,
wages, annuities, compensations, remuneration and emoluments of the aliens employed by
the RHQ
The multinational company will remit into the Philippines such amount as may be necessary to
cover its operations in the country which will not be less US$50,000.00 or its equivalent in
other foreign currencies annually, which shall be supported by certificates of inward remittance
from a local bank, to be submitted to SEC within thirty (30) days from receipt of certificate of
registration.
Q: What are the Qualifying Services from which income may be derived by ROHQ?
A: A ROHQ may engage in any of the following qualifying services:
a) general administration and planning
b) business planning and coordination
c) sourcing or procurement of raw materials and components
d) corporate finance advisory services
e) marketing control and sales promotion
f) training and personnel management
g) logistics services
h) research and development and maintenance
i) data processing and communication
j) business development
BOOK IV
BOOK V
Q: Who are the qualifications of an alien in order to be issued a Special Investors Resident
Visa?
A: Any alien who possesses the following qualifications shall be granted a special investors
resident visa:
a) He has not been convicted of a crime involving moral turpitude:
b) He is not afflicted with any loathsome, dangerous or contagious disease;
c) He has not been institutionalized for any mental disorder of disability;
d) He is willing and able to invest the amount of at least US$75,000.00 in the Philippines.
BOOK VI
Q: May the Export Processing Zone Authority allow an alien to engage in an industry
inside the export-processing zone?
A: Yes, the EPZA my authorize an alien or an association, partnership, corporation or any other
form of business organization formed, organized, chartered or existing under any law other than
the Philippines or the working capital of which is fully owned or controlled by aliens to do
business in an industry inside the export processing zone.
A zone registered enterprise may employ foreign nationals in supervisory, technical or advisory
positions for a period not exceeding five (5) years from its registration, extendible for limited
periods at the discretion of the Authority
Q: Give some incentives given within the export processing zone areas
A: Among the incentives given within the export-processing zone areas are:
a) Exemption from customs duties and internal revenue taxes on raw materials, supplies and
equipment imported within the zones;
b) Net-operating loss carry over for the first 5 years of operations;
c) Accelerated depreciation of fixed assets to not more than twice the normal rate of
depreciation;
d) Exemption from export tax;
e) Exemption from local taxes and licenses;
f) Deduction of labor training expenses incurred of the value of such expenses;
g) Deduction for organizational and pre-operating expenses over a period of 10 years;
h) Grant of tax credit equivalent to the sales, compensating and specific taxes and duties paid
on supplies, raw materials and other products purchased.
FOREIGN BORROWINGS ACT (R.A. 4860, As Amended by P.D Nos. 81, 150, 351, 588
and 621-A)
Q: Up to how much can the President contract such loans, credits or indebtedness?
A: The total amount of loans, credits or indebtedness, excluding interests and other normal
banking charges shall not exceed five billion United States dollars or its equivalent in other
foreign currencies at the exchange rate prevailing at the time the loans, credits or indebtedness are
incurred at terms of payment of not less than 10 years except those contacted in the interest of
national security and rehabilitation resulting from natural calamities
Q: Where can this total authorized amount of loans, credits or indebtedness be allocated?
A: 75% of such total authorized amount of five billion United States dollars shall be incurred for
projects of the public sector and 25% thereof shall be utilized for projects of the private sector
and that no individual, partnership, cooperative, association or private corporation shall be
allowed to borrow more than 15% of the total of such loans, credits or indebtedness.
Q: May the President guarantee such loans, credits or indebtedness? Is there a limitation?
A: Yes, the President upon the recommendation of the proper government agencies is authorized
to guarantee such loans, credits or indebtedness but shall not be more than two and one half
billion United States dollars or its equivalent in other foreign currencies at the exchange rate
prevailing at the time the guarantee is made excluding interest and other normal banking charges
imposed.
Q: What is the duty of the President required by the Act after contracting the loans, credits
or indebtedness?
A: It shall be the duty of the President, within 30 days after the opening of every regular session,
to submit a separate report to Congress on the amount of loans, credits and indebtedness
contacted in the process of the negotiation and of the bonds, debenture, securities, or other
evidences of indebtedness sold in the international markets and proposed to be sold, as well as the
guarantees extended, their respective terms and conditions and the purposes and projects for
which the loan, credits or indebtedness were incurred and for which the bonds, debentures,
securities were floated.