What are Fiscal Incentives with BOI Registration in the Philippines?

May 20, 2025

Through its Board of Investments (BOI), the Philippine government offers a robust framework of government incentives designed to attract local and foreign investors, fostering economic growth and industrial development. These fiscal benefits, from tax exemptions to duty-free importation, are tailored to support businesses operating in priority sectors outlined in the Investment Priorities Plan (IPP). By registering with the BOI, enterprises can access a suite of tax incentives and non-fiscal advantages that enhance profitability and operational efficiency. This article details the types of fiscal incentives available, eligibility criteria, application processes, and the strategic importance of leveraging these benefits, with guidance from Triple i Consulting, a trusted provider of BOI registration services.

What Are Fiscal Incentives Offered by the BOI?

Fiscal incentives are financial benefits the Philippine government provides to reduce the tax burden and operational costs of registered businesses, encouraging investment in key industries. These incentives, administered under the Omnibus Investments Code of 1987 (Executive Order No. 226) and enhanced by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, aim to make the Philippines a competitive investment destination. Operating under the Department of Trade and Industry, the BOI ensures these benefits align with national development goals.

Income Tax Holiday (ITH): Registered enterprises enjoy exemption from income taxes for four to seven years, depending on the project’s status (pioneer or non-pioneer) and location. Pioneer projects, which introduce innovative technologies or operate in less-developed areas, qualify for six years, while non-pioneer projects receive four years. Expansion or modernization projects are eligible for three years and are limited to incremental sales revenue.
Duty Exemption on Imported Capital Equipment: BOI-registered firms can import machinery, spare parts, and accessories at zero percent duty, provided they are classified under specific tariff codes in the Tariff and Customs Code of the Philippines. This reduces upfront costs for setting up operations.
Exemption from Wharfage Dues and Export Taxes: For ten years from registration, enterprises are exempt from wharfage dues and export taxes, duties, or fees on non-traditional export products, facilitating cost-effective international trade.
Tax Exemption on Breeding Stocks and Genetic Materials: Agricultural producers benefit from tax exemptions on importing breeding stocks and genetic materials for ten years from registration, supporting agribusiness development.
Tax Credits for Local Materials: Exporters using local raw materials or supplies can claim tax credits equivalent to national internal revenue taxes and duties paid, promoting domestic sourcing and reducing production costs.
Additional Deduction for Labor Expense (ADLE): For the first five years post-registration, businesses can deduct 50% of wages for additional skilled and unskilled workers in their direct labor force, lowering operational expenses.

Types of Fiscal Incentives Under the CREATE Act

The CREATE Act, enacted in 2021, modernized the Philippines’ incentive framework, harmonizing benefits across investment promotion agencies like the BOI and introducing new fiscal structures. It emphasizes export-oriented and domestic market enterprises (DMEs) engaged in strategic activities under the Strategic Investment Priorities Plan (SIPP). These incentives are tailored to encourage innovation, job creation, and sustainable development.

Special Corporate Income Tax (SCIT): After the ITH period, export enterprises can avail of a 5% tax rate on gross income instead of all national and local taxes for ten years. This provides long-term tax relief for businesses focused on international markets.
Enhanced Deductions Regime (EDR): For up to ten years, enterprises can claim enhanced deductions, including 100% of power expenses, 50% of labor costs, and depreciation allowances for capital equipment, offering flexibility for DMEs.
VAT Exemption on Imports and Local Purchases: Export enterprises enjoy VAT exemptions on imports and zero-rated VAT on local purchases of goods and services directly used in registered activities, reducing operational costs for up to 17 years.
Extended Incentive Periods for Strategic Projects: Projects under Tier III of the SIPP, such as those in artificial intelligence or cybersecurity, may qualify for up to 24–27 years of SCIT or EDR, provided they meet stringent criteria like employing 10,000 direct local workers.
Tax and Duty-Free Importation: Imports of raw materials, capital equipment, and spare parts used exclusively in registered projects are exempt from taxes and duties, streamlining production processes.
Local Tax Caps: Registered enterprises face a maximum local tax of 2% of gross income, replacing other local taxes and fees, ensuring predictable fiscal obligations.

Eligibility Criteria for BOI Incentives

To qualify for BOI incentives, enterprises must meet specific requirements tied to their ownership structure, project type, and alignment with the IPP or SIPP. These criteria ensure incentives support industries critical to national development, such as manufacturing, agriculture, and IT-business process outsourcing (IT-BPO). Triple i Consulting assists clients in navigating these eligibility thresholds to maximize benefits.

Engagement in IPP or SIPP Activities: Businesses must operate in sectors listed in the IPP, such as renewable energy, agro-processing, or creative industries. The SIPP, effective since June 2022, prioritizes activities like green vehicles, integrated circuit design, and smart grid technologies.
Wholly Filipino-Owned Enterprises: Locally owned firms can register if they engage in any IPP-listed activity, regardless of pioneer status, making it easier for domestic businesses to access incentives.
Foreign-Owned Enterprises: Wholly foreign-owned corporations must undertake pioneer projects, export at least 70% of their products or services, or locate in less-developed areas (LDAs) designated by the BOI. Unless fully export-oriented, they must also transition to 60% Filipino ownership within 30 years.
Export-Oriented Commitment: Enterprises exporting 70–100% of their production, such as IT-BPO or manufacturing firms, qualify for extended incentives, including VAT exemptions and duty-free imports.
Minimum Investment for High-Value Projects: Projects with at least PHP 50 billion in capital or generating 10,000 direct local jobs within three years may receive customized incentive packages, as approved by the Fiscal Incentives Review Board (FIRB).
Compliance with Post-Registration Obligations: Registered firms must commence operations within one year of approval (extendable under certain conditions) and maintain compliance with BOI terms, such as export thresholds or employment targets.

BOI Incentive Application Process

Applying for BOI incentives involves a structured process requiring meticulous documentation and adherence to regulatory guidelines. The BOI typically processes applications within 10–20 working days, depending on the project’s complexity and the Management Committee’s review timeline. Triple i Consulting streamlines this process, ensuring accuracy and efficiency.

Prepare Required Documents: Applicants must submit a SEC Certificate of Registration, Articles of Incorporation, a project feasibility study, audited financial statements, and a board resolution authorizing a company representative. A detailed project brief and anti-graft certificate are also required for pioneer projects.
Submit Application to BOI: Applications are filed through the BOI’s online portal or physical office, accompanied by a project report aligning activities with the IPP or SIPP. Triple i Consulting ensures all documents meet BOI standards.
BOI Evaluation and Approval: The BOI reviews the application for eligibility, economic viability, and compliance with national priorities. This includes a cost-benefit analysis for new projects, except transferees from other investment promotion agencies.
Receive Certificate of Registration: Upon approval, the BOI issues a Certificate of Registration detailing the granted incentives and their duration. This certificate serves as proof of eligibility for fiscal benefits.
Commence Operations: Projects must start within one year of approval, with progress monitored by the BOI to ensure compliance with terms, such as export commitments or job creation targets.
Annual Compliance Reporting: Registered enterprises submit yearly reports to the BOI, including financial statements and export data, to maintain incentive eligibility. Triple i Consulting provides ongoing compliance support.

Benefits of BOI Registration for Businesses

BOI registration offers a competitive edge by reducing financial and operational barriers, enabling businesses to scale efficiently in the Philippines. These benefits extend beyond fiscal incentives, encompassing non-fiscal advantages that enhance market access and operational flexibility. Given the complexity of the registration process, Triple i Consulting’s expertise is critical to navigating the intricate requirements and ensuring seamless access to these advantages.

Significant Cost Savings: Tax holidays, duty exemptions, and VAT relief lower startup and operational costs, improving profit margins for industries like manufacturing and IT-BPO.
Enhanced Global Competitiveness: Duty-free imports and export tax exemptions reduce production costs, allowing firms to price products competitively in international markets.
Operational Flexibility: Non-fiscal incentives, such as simplified customs procedures and the ability to operate bonded manufacturing warehouses, streamline supply chains and logistics.
Access to Foreign Talent: Registered firms can employ foreign nationals in supervisory, technical, or advisory roles for up to five years (extendable), with exemptions for key positions like president or treasurer in foreign-owned firms.
Support for Sustainable Growth: Incentives tied to the SIPP encourage investments in green technologies, renewable energy, and inclusive business models, aligning with global sustainability trends.
Expert Guidance from Triple i Consulting: The BOI application and compliance processes are complex, with stringent documentation and regulatory requirements. Triple i Consulting’s tailored services ensure businesses avoid costly errors and maximize incentive benefits, making it an essential partner for successful registration.

Final Thoughts

Government incentives through BOI registration provide a powerful mechanism for businesses to thrive in the Philippines’ dynamic economy. From income tax holidays to duty-free importation, these fiscal benefits reduce costs and enhance competitiveness, particularly for industries aligned with the IPP and SIPP. Enterprises can unlock significant financial and operational advantages by meeting eligibility criteria and navigating the application process. However, the complexity of the process underscores the value of professional support. Triple i Consulting is a trusted provider offering expert guidance to ensure businesses fully capitalize on BOI incentives.

Is Assistance Available?

Yes, Triple i Consulting specializes in simplifying the intricate BOI registration process, from document preparation to compliance monitoring. Don’t miss out on the fiscal advantages that can propel your business forward. Contact us today to schedule an initial consultation with one of our experts: