Trade and Investments FAQ
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), the government agency responsible for the registration, licensing, regulation and supervision of all corporations licensed to engage in business or to establish a branch office in the Philippines.
If the proposed project or activity qualifies for incentives, the foreign corporation may file its application with the appropriate government agency depending on the project's location, as follows:
- Board of Investments (BOI). Website: www.boi.gov.ph. For projects outside the special economic zones
- Philippine Economic Zone Authority (PEZA). Website: www.peza.gov.ph. For projects in any Special Economic Zone under PEZA
- Subic Bay Metropolitan Authority (SBMA). Website: www.sbma.com. For projects in Subic Bay Freeport
- Clark Development Authority (CDC). Website: www.clark.com.ph. For projects in Clark Special Economic Zone
- John Jay Poro Point Development Corporation. For projects in John Jay Special Economic Zone, Poro Point Freeport and Special Economic Zone
- Cagayan Economic Zone Authority. Website: www.ceza.gov.ph. For projects in Cagayan Special Economic Zone
- Zamboanga Economic Authority. Website: www.zambofreeport.com.ph. For projects in Zamboanga City Special Economic Zone
Foreign investments in the Philippines have been liberalized with the enactment of the Foreign Investments Act of 1991. Almost all sectors of business is open to 100% foreign equity and investment except financial institutions and those included in the Foreign Investment Negative List provided in the Foreign Investment Act of 1991.Q. What is the rate of corporate income tax in the Philippines?
Yes. Under the Philippine Mining Act of 1995, foreign mining firms are now allowed to engage in mining activities in the Philippines and to register with the Bureau of Investments (BOI) for incentives. The Mining Act of 1995 also provides incentives to foreign enterprises engaged in mining in the Philippines.
Foreign corporations are taxable on Philippine-sourced income at the same rate as domestic corporations at the rate of 35% starting 01 July 2005 but will be reduced to 30% with effect from 01 January 2009. A licensed foreign corporation will be treated as a "resident foreign corporation" subject to the 35% tax on its net Philippine-sourced income. An unlicensed foreign corporation will be treated as a "non-resident foreign corporation", subject to 35% tax on its gross Philippine-sourced income.
Branches of foreign corporations are subject to the same corporate tax rate. Branch profit remittances are subject to 15% tax, which can be reduced subject to tax treaty agreements.
Yes. Under the Philippine Retail Trade Liberalization Act (Republic Act No. 8762), foreigners are allowed to engage in retail trade in the Philippines if their paid-up capital is US$2.5 million and above.
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