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.

EO 226 Omnibus Invest Code of 1987

ART. 17. Pioneer enterprise shall mean a registered enterprise (1) engaged
in the manufacture, processing or production, and not merely in the
assembly or packaging of goods, products, commodities or raw materials
that have not been or are not being produced in the Philippines on a
commercial scale of (2) which uses a design, formula, scheme, method,
process or system of production or transformation of any element,
substance or raw materials into another raw material or finished goods
which is new and untried in the Philippines or (3) engaged in the pursuit of
agricultural, forestry and mining activities and/or services including the
industrial aspects of food processing whenever appropriate, pre-
determined by the Board, in consultation with the appropriate Department,
to be feasible and highly essential to the attainment of the national goal in
relation to a declared specific national food and agricultural program for
self sufficiency and other social benefits of the projectART. 17. Pioneer
enterprise shall mean a registered enterprise (1) engaged in the
manufacture, processing or production, and not merely in the assembly or
packaging of goods, products, commodities or raw materials that have not
been or are not being produced in the Philippines on a commercial scale of
(2) which uses a design, formula, scheme, method, process or system of
production or transformation of any element, substance or raw materials
into another raw material or finished goods which is new and untried in
the Philippines or (3) engaged in the pursuit of agricultural, forestry and
mining activities and/or services including the industrial aspects of food
processing whenever appropriate, pre-determined by the Board, in
consultation with the appropriate Department, to be feasible and highly essential to
the attainment of the national goal in relation to a declared specific national food
and agricultural program for self sufficiency and other social benefits of the project

Article 39. Incentives to registered enterprises

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