15th floor Keppel Center, Ayala - Cebu Business Park, Cebu, Philippines
15th floor Keppel Center, Ayala - Cebu Business Park, Cebu, Philippines
For simple incorporation paid-capital requirements of the Securities and Exchange Commission, the minimum paid-up capital is P5,000.00. However, higher paid-up capita is required for specialized businesses like Banks, Lending companies, Investment Houses and Manning Agencies, business Engage in VOIP Services, and Recruitment Agencies.
Foreign Investors who wish to own more than 40% to 100% of the business may also comply Philippine investment laws. Republic Act 8179 amended Republic Act 7042 (Foreign Investment Act) reduced the minimum paid-capital of foreign companies serving the domestic market from US$500,000 to US$200,000. The minimum maybe decreased further to US$150,000 if a company uses advanced technology as certified by the Department of Science and Technology or directly employs at least 50 employees.
Individual investors may also invest a minimum of US$50,000.00 to US$75,000.00 to qualify for certain visas like Special Investor's Resident Visa and Special Retirees Resident Visa.
The FIA covers all investment areas except banking and other financial institutions, which are governed and regulated by the Bangko Sentral ng Pilipinas (BSP).
Foreign Investment Negative List - means a list of areas of economic activity whose foreign ownership is limited to a maximum of forty percent (40%) of the outstanding capital stock in the case of a corporation or capital in the case of partnership.
Below are Negative Lists A & B where:
List A: refers to areas reserved to Filipinos by mandate of the Constitution and Special Laws such as but not limited to:
Mass Media except recording, practice of licensed profession, retail trade, cooperative and small-scale mining, etc. where foreign ownership is prohibited; Advertising, ownership of land, operation and management of public utilities, etc., where only minority foreign ownership is prohibited.
List B: refers to areas that are defense-related, those with adverse effects on public health and morals and domestic market enterprises with paid-up capital of less than US$200,000, provided they involved advanced technology as determined by the Department of Science and Technology (DOST) or directly employ at least fifty (50) employees, in which case, the paid-up capital shall be lowered to US$100,000 only to non-Philippine nationals
Depending on the type of incentives desired, the kind of investment under E.O. 226 are:
Book II (Foreign Investments Without Incentives) has been repealed by Republic Act No. 7042 or the Foreign Investments Act of 1991, as amended by Republic Act No. 8179. Foreign-owned companies not availing of incentives are covered by the provisions of this Act
All investors and enterprises are entitled to the basic rights and guarantees provided in the Philippine Constitution. Among other rights recognized by the government of the Philippines are the following:
Partnership or Corporation (whether stock or non-stock), not seeking incentives, can go directly to the Securities and Exchange Commission (SEC) to register its Articles of Partnership or Incorporation.
Single proprietorship need only to go to the Bureau of Trade Regulation and Consumer Protection (BTRCP) or to the DTI Regional offices in the region
Before a foreign corporation can engage in business in the Philippines, it must first secure the necessary licenses or registration certificates from the appropriate government agencies. Generally, the registration process starts with the Securities and Exchange Commission (SEC).
If the proposed project or activity qualifies for incentives, the foreign investor may file its application with the appropriate government agency depending on the projects location.
To qualify for registration with the BOI for incentive purposes, the proposed foreign investment must be made in any of the following:
preferred areas of investment listed in the current Investment Priorities Plan(IPP). A preferred area may be declared pioneer if it: (1) involves the manufacturing or processing (not merely assembly or packaging) of goods or raw materials that have not been produced in the Philippines on a commercial scale; (2) uses a design, formula, scheme, method, process or system of production or transformation of any element or raw material into another raw material or finished good which is new and untried; (3) engages in agricultural activities/services essential to the achievement of the country's self-sufficiency program; and (4) produces non-conventional fuels or manufactures equipment which utilize non-conventional sources of energy; provided that the final product in any of the foregoing instances involves substantial use and processing of domestic raw materials;
Enterprises engaged in preferred non-pioneer areas and exporting at least 70% of their output; and
Projects in less-developed areas provided that the activities in all of the above cases are not reserved for Philippine nationals.
On the other hand, the projects that may qualify for registration with PEZA are those that involve manufacturing for export and the domestic market, free trade, tourism, information technology, utilities, facilities enterprises including those engaged in warehousing and trading operations in the ecozones and development and operation of ecozones.
Under the 1987 Omnibus Investments Code, applications filed with the BOI shall be considered automatically approved if not acted upon by the Board within twenty (20) working days from official acceptance thereof, subject to the usual terms and conditions.
In the case of PEZA, the processing and evaluation by the appropriate department usually takes about two weeks. The decision on the project is made during the bi-monthly meetings of the PEZA Board.
If you are producing goods for the domestic market and there will be no export activity, you may register your business as a sole proprietorship under the Foreign Investments Act of 1991:
If you will be joining a corporation or forming one:
If your product is at least 70% for export or if the activity is among those listed in the Investment Priorities Plan then your company may be registered and qualify for incentives with the Board of Investments (BOI):
As a foreign investor, the following are your rights and privileges:
In an industrial park, the basic infrastructures are already in place. Water, electricity, telephone and other facilities are already available for immediate connections. The road network inside and outside the industrial estate is already pre-developed. Proper zoning (industrial, residential, commercial and recreational areas) inside the park is also predetermined, with the industrial lots simply waiting for the construction of the factory needed by the locator firm. Moreover, the Locator Company is given the assistance in securing local licenses and permits necessary for the construction and operation of the business.
Industrial estates are normally divided into two areas: a Customs Bonded and a Non- Customs Bonded Area. If the locator company is highly import dependent, it is advised to locate within the Customs Bonded Area. Doing so, its imported goods (raw materials, supplies and equipment) will not be subject to Customs inspection at the port but rather at the company’s premises inside the industrial park.
Based on the 1997 Labor Code of the Philippines, the other costs / benefits that have to be given to employees are the following: .
A company qualified for tax exemptions on the importation of its equipment must secure prior approval from its governing agency before actual importation can be made.
Regular importation is made through Authorized Agent Bank (AAB).
The importation of raw materials has already been liberalized. Therefore the importer simply has to proceed to an AAB to open the necessary letter of credit or other modes through which payment will be made.
There are, however, regulated items that require clearance from the concerned agency prior to importation, and items whose importation is prohibited.
To get this permit/license to operate, present the following documents at the Licensing Section of the Mayor’s Office where your business is located:
The following fees are collected:
With the Mayor’s Permit, the following are done at the BIR:
Marriages can be annulled by the court on the following grounds:
The kinds of fraud that will give ground for annulment are as follows: