21st

ANNUAL

CREBA NATIONAL CONVENTION

18 October 2012

The Legend Hotel, Palawan

2012 IPP

REAL ESTATE

INVESTMENT

GUIDELINES AND

INCENTIVES

Presentation Outline

Part I - 2012 Investments Priorities Plan

Part II - Specific Activities Involving Real Estate Development

Part III - Qualifications for BOI Registration and Incentives Entitlement

Part IV - BOI Incentives

The IPP is an over-all plan prepared annually by

the BOI, which includes and contains specific activities

and generic categories of economic activity wherein

investments are to be encouraged.

Its preparation and formulation is undertaken through

the concerted efforts of the IPP Inter-Agency Working

Group headed by BOI in coordination with the PMS,

NEDA, DOF and other concerned government

agencies such as DA, DOE, DOT, DOST and DOTC.

Investment Priorities Plan (IPP)

2012 INVESTMENT

PRIORITIES PLAN

Agribusiness

Creative/Knowledge-based

Disaster PMR

Energy

Green Projects

Hospitals

Infrastructures

Iron and Steel

Mass Housing

Motor Vehicle

R & D/ Training

Shipbuilding

Strategic Projects

Books

Mining

Petroleum Products

PWD Support

Renewable Energy

Tourism

Solid Waste Management

Water Supply

Manufactured Products

Services Exports

Activities Supporting Exports

PREFERREDMANDATORY

EXPORTS

MASS HOUSING

1. Development of Low-cost Housing

(Selling Price > P 400,000 < P 3.0 million)

2. Manufacture of Modular Housing Components

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Selling price per unit of above P400,000 to P3.0 million

Must be new or expanding

Minimum of 20 livable units in a single site/building

Conformance with BP 220/PD 957

General Requirements:

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Compliance with the socialized housing requirement (SHR)

through the following modes:

Development of new settlement directly undertaken by the

registered entity

Joint venture with LGUs, BOI-accredited NGOs, the National

Housing Authority (NHA),a subsidiary of the BOI-registered

entity, or a developer accredited by the HLURB

Slum upgrading or renewal of areas

Compliance with SHR completed within ITH availment period and

should be proportionate to the number of low cost housing units being applied for ITH for the taxable year

General Requirements:

888

Socialized Housing Requirement(under Section 18 of RA 7279)

Horizontal

20% of total subdivision area; or

20% of total subdivision project cost

Vertical

20% of total floor area of qualified saleable

low cost housing units

999

Horizontal Housing Projects

Vertical Housing Projects

Must be located in areas zoned and classified

for residential purposes in conformity with CLUP

and zoning of LGU

At least 51% of total floor area devoted to

housing

Donation/Direct Participation to BOI-accredited

NGOs for community development

Equivalent to 30% of 20% of building

construction cost; or

Not less than 40% of estimated ITH

101010

New Projects Newly organized/formed enterprise

Existing enterprise but with new investments in an area not contiguous to its existing

mass housing projects

Expansion Projects

Unfinished projects Converted projects

Annex or additional to existing projects

Adjacent projects

111111

Completed projects with booked sales, in general,

not qualified for registration

ITH entitlement

3-year ITH (NCR, Metro Cebu, Metro Davao)

4-year ITH

For un-incorporated ventures, only developers

may qualify for registration

Interest income from in-house financing not

entitled to ITH

Others

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Modular Housing Components

Covers the manufacture of modular housing

components preferably using indigenous materials

Includes the following:

Roof/framing systems

Wall/partition systems

Flooring systems

Door/window systems

Finishing/ceiling systems

To avail of ITH, Firm should sell 50% of total annual

production to mass housing projects

◄

TOURISM (R.A. 9593)

1. Transportation Facilities

2. Accommodation Facilities

3. Health & Wellness Facilities

4. Retirement Villages

5. Historical Destinations

Establishment and operation of:

• Accommodation facilities such as but not limited

to hotels, resorts, apartment hotels, tourist inns,

motels, pension houses, private homes for

homestay, ecolodges, condotels, serviced

apartments, and bed and breakfast facilities;

• Convention and exhibition facilities or “meetings,

incentives, conventions and exhibition” (MICE)

facilities;

• Amusement parks;

• Adventure and ecotourism facilities;

• Sports facilities and recreational centers;

Tourism Facilities (outside TEZs)

Establishment and operation of:

• Theme parks;

• Health and wellness facilities such as but not

limited to spas, tertiary hospitals, and ambulatory

clinics;

• Agri-tourism farms and facilities; and

• Tourism training centers and institutes

Development of retirement villages.

Restoration/ preservation and operation of

historical shrines, landmarks and structures

Tourism Facilities

Hotel projects/apartment hotels/serviced

apartments/condotels classified as first class or

deluxe by the Department of Tourism (DOT) and

costing at least the Philippine equivalent of

US$100,000/room

Resort projects classified as “AAA” by the DOT and

with project cost of at least the Philippine Peso

equivalent of US$10 million

Projects located in LDAs

Any of the following may qualify for pioneer

status:

Modernization of hotels classified as first class or

deluxe by the DOT with a project cost of at least

the Philippine Peso equivalent of US$10,000/ room

Amusement parks/ theme parks with minimum

project cost of the Philippine Peso equivalent of

US$10 million involving the development of sites or

attractions considered as novel in the Philippines

Adventure and ecotourism facilities/agri-tourism

farms and facilities with a project cost of at least

the Philippine Peso equivalent of US$5 million.

Any of the following may qualify for pioneer

status:

Condotel/apartment hotel/serviced apartment/

tourist inn/pension house/motel, must cater to

tourists/guests to qualify for registration. Each unit

must have fully equipped kitchen and laundry

facilities.

Income arising from gaming and mall operations

are not qualified for ITH.

For modernization projects, replacement of

carpets, pillows, mattresses and other similar items

shall be excluded from the computation of the ITH

rate of exemption.

General Guidelines

Health Spa

• This covers the establishment and operation of

destination spa, resort/hotel spa, therapeutic

centers,traditional healing (e.g., Philippine “hilot”,

“dagdagay”, “ventossa”, etc.), and other

alternative healing and medical care services.

• Projects that cost at least the Philippine Peso

equivalent of US$20 million may be granted pioneer

status.

Health and Wellness Facilities

Tertiary Hospital

• Covers tertiary hospitals with a minimum of (fifty) 50

rooms (suites and private rooms only) and with a

minimum project cost of at least the Philippine Peso

equivalent of US$10 million.

Ambulatory Clinics

• Covers services such as elective (non-emergency)

surgical treatment of out-patients

• Includes comprehensive ophthalmologic surgery,

dermatology, cosmetic procedure, plastic and

reconstructive surgery, cosmetic dentistry, and medical

care

Health and Wellness Facilities

All applications for registration must be endorsed by the Department of Tourism (DOT).

DOT accreditation must be submitted prior to ITH availment. Only income derived from tourism-related activities shall be entitled to ITH.

General Guidelines

Retirement Villages

A retirement village must have a minimum of four (4) hectares of contiguous land

Project cost must be at least the Philippine peso equivalent of US$ 10 million

Retirement villages with a minimum area of twenty (20) hectares may qualify for pioneer status (6-yrs ITH)

Applications must be endorsed by the Philippine Retirement Authority (PRA). PRA accreditation must be submitted prior to ITH availment.

Restoration/ preservation and operation

of historical shrines, landmarks and

structures

Covers the conservation, preservation or restoration of national sites or properties.

Projects undertaking the conservation and

preservation, restoration or maintenance of historico-

cultural heritage that includes any of the following may qualify for registration:

• National shrines, monuments, and/or landmarks

• Local historical sites/properties classified, identified, and listed in the National Registry of

Historic Structures

• Cultural properties, treasures and/or artifacts

Restoration/ preservation and operation

of historical shrines, landmarks and

structures

Any of the following historic-cultural heritage

projects may qualify for pioneer status:

• Residential projects with a project cost of at

least PhP10 million, or

• Other structures with a project cost of at least

PhP20 million.

HOSPITAL/ Medical Services

Development and Operation of Primary,

Secondary and Tertiary hospitals

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• Covers the establishment and operation of medical

facilities including primary, secondary, tertiary

hospitals and ambulatory facilities.

• Only revenues from the provision of medical and

diagnostic services shall be entitled to ITH. Revenues

from operating a pharmacy, food services and any

other non-treatment related services will not be

eligible for ITH.

General Requirements:

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• Secondary care hospitals with a minimum capacity

of 50 beds and an investment cost of at least the

Philippine Peso equivalent of US$2.5 million may

qualify for pioneer status

• Only facilities outside of Metro Manila may qualify

for registration.

• Prior to availment of ITH, registered projects must

submit copies of license to operate issued by the

DOH and Philhealth Accreditation.

General Requirements:

Incentives For BOI-Registered Enterprises

Entitlement and availment of incentives shall be

subject to the terms and conditions set forth under

the relevant law and the project’s Certificate of

Registration as well as the rules and regulations of

the implementing/administering agency.

Omnibus Investments Code of 1987 (E.O. No. 226)

• Income Tax Holiday (ITH)

• Duty exemption on imported capital

equipment, spare parts and accessories

Income Tax Holiday

Exemption from Income Tax levied by the

National Government

Type of BOI Registration No. of Years of ITH

New & Pioneer 6

New & Non-Pioneer 4

Expansion 3

Project located in LDA 6

Modernization 3

BOI Incentives

Duty-free Importation of Capital Equipment

(EO 70)

Duty-free importation of capital equipment, spare

parts and accessories of BOI-registered new and

expanding enterprises, provided that:

a. They are not manufactured domestically in

sufficient quantity, of comparable quality and at

reasonable prices; and

b. They are reasonably needed and will be used

exclusively by the enterprise in its registered

activity, unless prior approval of the BOI is

secured.

BOI Incentives

BOI REGISTRATION

SIMPLIFIED

No more detailed 5 year Financial Projections

required for 95% of projects

Only 4 page Application form (inclusive of

supporting schedules)

Endorsements from other agencies required only

after BOI approves the project

Board action 2 weeks after filing

CONNECTIVITY

facebook.com/invest.phl twitter.com/boiphilippines

Board of Investments-Main Office

385 Sen. Gil Puyat Ave. Makati City

Email: nerbac@boi.gov.ph

Tel. (02) 897-6682

BOI CebuGround Flr. LDM Bldg.Lapu-Lapu St., Cebu City Tel. No. (032) 412-1945/44

BOI Davao4th Flr. Mintrade Bldg., cor. Monteverde & Sales Streets, Davao CityTel. No. (082) 222-4677

BOI Cagayan de OroMuñoz Bldg., 52nd Business Center cor. Tiano Gaerlan Street,

Cagayan de Oro City

Tel. No. (088) 857-4867

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