Business Consulting BlogHow to Register a BPO with the BOI for Tax Incentives

August 31, 2013

Besides the low labor cost and high work ethic of the Philippines, one of the major reasons companies register a business in the Philippines is to receive some of the excellent tax benefits the government has created for their particular industry. The most notable and often the one most taken advantage of is the BPO or Outsourcing Industry utilizing the Board of Investment (BOI) to register for tax incentives.

It’s a very attractive offer for business owners who are looking to really save on their companies profit. There are several incentives granted in the IT/BPO Industry sector, including duty free importation of capital equipment, and easy employment of foreign nationals, who can register for the 47 a(2) Visa, a special multiple entry visa given to BOI registered companies. Certainly the most eye-catching incentive included is a 4 year income tax holiday. Who could resist being able to declare as high as income as you wanted to for 4 years and not have to worry about the 30% tax placed on your company.

The BOI like all other Philippine government agencies can be a bit tricky to navigate at first, but once you have all the information and are familiar with the process, BOI registration becomes a lot simpler.

The first step is to make sure that your company qualifies for an incentive. You can look at the Investment Priority Plan for 2010 to be sure but if you are engaged in a Call Center or Business Outsourcing Company, you will most likely qualify. There is also BOI incentive granted to any company with 50%-70% export business (50 for Filipino Owned – 70 for Foreign), which outsourcing is considered export.

Begin to fill up you BOI application. For the main application is pretty standard, just the company details and shareholding structure and basic information. Then you will be required to prepare a 5 year feasibility study or business plan on your intended operation, including a profit and loss sheet with and without the possible BOI incentives. For a call center or IT project there is a requirement that there be a 2,500 USD investment for each “seat” of the location. As a BPO Consultant, having setup call centers in the Philippines, I can tell you that it’s actually quite easy to arrive at the total of 2,500 per seat. Once you factor in start-up costs, equipment, and rental, you should come to the appropriate figure.

Take the application requirements along with a copy of your articles of incorporation and by-laws to the Project Evaluation and Registration Dept. of the BOI on the 3rd floor. Important to note you should also bring with you a receiving copy and an electronic version of the requirements on a CD or USB.

The PERD will accept you documents for check listing. If everything is presented correctly this should be done in 3-4 days. Follow this up to make sure your project has not been neglected. Once check-listed the mater will be brought to the management committee who will approve your project to the next step. The next step is to place a publication notice in a paper of circulation for 3 days stating your company will apply to the BOI. After, you will be given an Affidavit of Publication to be taken to the PERD. They will now allow you to officially apply and pay the application fee which will very depending on the size of your proejct.

After all this it will still need to be approved by the Board of the BOI, they are supposed to meet every week but sometimes they are unable to convene. When they review your project and everything is filled out correctly they will then release a certificate of registration and you will receive a notice from the BOI with all your incentives clearly defined.

This whole process should take 4-6 weeks but can take up to 6 months. The most important bit of advise I can give to people or companies trying to file their registration on their own is, follow up. Make it a point to know constantly at which stage your project is at and when the next stage will come up.

If you have any questions please don’t hesitate to post comments or Contact Us if you want assistance in registering your Call Center with the BOI.

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