Omnibus Investment Code

Omnibus Investment Code of 1987 (Executive Order No. 226) Summary: The Omnibus Investment Code of 1987 is a comprehensive law designed to promote investments in the Philippines. It established the Board of Investments (BOI) with the goal of facilitating and encouraging investment in the country. Key provisions include:

1. Incentives for Investors: The code offers incentives like income tax holidays, tax credits, and duty-free importation of capital equipment for qualified businesses.
2. Investment Priorities Plan (IPP): It introduces the IPP, which identifies priority sectors and industries for investments.
3. Protection of Investment: The code guarantees protection against government expropriation and assures repatriation of earnings and capital under certain conditions.
4. Preferential Treatment for Filipino Enterprises: The law encourages the development of Filipino enterprises and may offer them preferential treatment in certain sectors.

Foreign Investments Act of 1991 (Republic Act No. 7042) Summary: The Foreign Investments Act of 1991 liberalized the rules for foreign investments in the Philippines. It expanded the scope for foreign participation in various industries with the aim of boosting economic growth. Key features include:

1. Foreign Ownership: The Act allows up to 100% foreign ownership in certain investment areas, except those reserved for Filipinos by the Constitution and existing laws.
2. Foreign Investment Negative List: It introduces the Regular Foreign Investment Negative List, which enumerates areas of economic activity where foreign investment is restricted or limited.
3. Rights of Foreign Investors: Foreign investors are granted the same rights as domestic investors in areas not covered by the Negative List.
4. Technical Assistance Agreements: The Act permits foreign nationals to enter into technical assistance agreements in sectors with foreign investment restrictions.

Both the Omnibus Investment Code and the Foreign Investments Act are central to the Philippines' investment framework, offering incentives and clarifying the rules for both local and foreign investors. They aim to create a favorable economic environment that attracts, promotes, and protects investments.