Article 9Supplement v1, p. 9

COMMERCIAL LAWS SUPPLEMENT

(f)

The

extent

to

which

technological advances are

applied and adopted to local conditions;

(g) The amount of equity and degree to which the

ownership of such equity is spread out and diversified;

and

(h) Such other criteria as the Board may determine.

ARTICLE 36. Appeal from Board's Decision . — Any order

or decision of the Board shall be final and executory after

thirty (30) days from its promulgation. Within the said

period of thirty (30) days, said order or decision may be

appealed to the Office of the President. Where an appeal

has been filed, said order or decision shall be final and

executory ninety (90) days after the perfection of the

appeal, unless reversed.

ARTICLE 37. Certificate of Registration . — A registered

enterprise under this Code shall be issued a certificate of

registration under the seal of the Board of Investments

and the signature of its Chairman and/or such other

officer or employee of the Board as it may empower and

designate for the purpose. The certificate shall be in such

form and style as the Board may determine and shall

state, among other matters:

(a) The name of the registered enterprise;

(b)

The

preferred

area

of

investment

in which the

registered enterprise is proposing to engage;

(c)

The

nature

of

the

activity

it

is

undertaking

or

proposing to undertake, whether pioneer or non-pioneer,

and the registered capacity of the enterprise; and

(d) The other terms and conditions to be observed by the

registered enterprise by virtue of the registration.

TITLE II Basic Rights and Guarantees

ARTICLE 38. Protection of Investments . — All investors

and registered enterprises are entitled to the basic rights

and guarantees provided in the Constitution . Among

other

rights

recognized

by

the

Government

of the

Philippines are the following:

(a) Repatriation of Investments . — In the case of foreign

investments, the right to repatriate the entire proceeds of

the liquidation of the investment in the currency in which

the investment was originally made and at the exchange

rate prevailing at the time of repatriation, subject to the

provisions of Section 74 of Republic Act No. 265 as

amended ;

For investments made pursuant to Executive Order No. 32

and its implementing rules and regulations, remittability

shall be as provided therein.

(b) Remittance of Earnings . — In the case of foreign

investments,

the

right

to

remit

earnings

from

the

investment in the currency in which the investment was

originally made and at the exchange rate prevailing at

the time of remittance, subject to the provisions of

Section 74 of Republic Act No. 265 as amended ;

(c) Foreign Loans and Contracts . — The right to remit at

the exchange rate prevailing at the time of remittance

such sums as may be necessary to meet the payments of

interest

and

principal

on

foreign

loans and foreign

obligations

arising

from

technological

assistance

contracts, subject to the provisions of Section 74 of

Republic Act No. 265 as amended ;

(d) Freedom from Expropriation . — There shall be no

expropriation

by

the

government

of

the

property

represented by investments or of the property of the

enterprise except for public use or in the interest of

national welfare or defense and upon payment of just

compensation.

In

such

cases,

foreign

investors

or

enterprises shall have the right to remit sums received as

compensation

for

the

expropriated

property

in

the

currency in which the investment was originally made

and at the exchange rate at the time of remittance,

subject to the provisions of Section 74 of Republic Act No.

265 as amended ;

(e)

Requisition

of

Investment . — There shall be no

requisition of the property represented by the investment

or of the property of enterprises, except in the event of

war or national emergency and only for the duration

thereof. Just compensation shall be determined and paid

either at the time of requisition or immediately after

cessation of the state of war or national emergency.

Payments received as compensation for the requisitioned

property may be remitted in the currency in which the

investment was originally made and at the exchange rate

prevailing at the time of remittance, subject to the

provisions of Section 74 of Republic Act No. 265 as

amended .

TITLE III Incentives to Registered Enterprises

ARTICLE 39. Incentives to Registered Enterprises . — All

registered enterprises shall be granted the following

incentives to the extent engaged in a preferred area of

investment:

(a) Income Tax Holiday. —

(1) For six (6) years from commercial operation for pioneer

firms and four (4) years for non-pioneer firms, new

registered firms shall be fully exempt from income taxes

levied by the national government. Subject to such

guidelines as may be prescribed by the Board, the

income tax exemption will be extended for another year

in each of the following cases:

(i) The project meets the prescribed ratio of capital

equipment to number of workers set by the Board;

(ii) Utilization of indigenous raw materials at rates set by

the Board;

(iii) The net foreign exchange savings or earnings amount

to at least US$500,000 annually during the first three (3)

years of operation.

The preceding paragraph notwithstanding, no registered

pioneer firm may avail of this incentive for a period

exceeding eight (8) years.

(2) For a period of three (3) years from commercial

operation, registered expanding firms shall be entitled to

an exemption from income taxes levied by the national

government proportionate to their expansion under such

terms and conditions as the Board may determine:

Provided, however, That during the period within which

this incentive is availed of by the expanding firm it shall

not be entitled to additional deduction for incremental

labor expense.

(3)

The

provision

of

Article

7(14)

notwithstanding,

registered firms shall not be entitled to any extension of

this incentive.

(b) Additional Deduction for Labor Expense. — For the

first five (5) years from registration a registered enterprise

shall be allowed an additional deduction from the taxable

income of fifty percent (50%) of the wages corresponding

to the increment in the number of direct labor for skilled

and unskilled workers if the project meets the prescribed

ratio of capital equipment to number of workers set by

the Board: Provided, That this additional deduction shall

be doubled if the activity is located in less developed

areas as defined in Article 40.

(c)

Tax

and

Duty

Exemption

on

Imported

Capital

Equipment and its Accompanying Spare Parts. — New,

expanding/modernizing

enterprise

which

have

been

registered with the Board of Investments on or before

December 31, 1994 shall be exempt to the extent of one

hundred percent (100%) of national internal revenue taxes

and

customs

duties

on

importations

of

machinery,

equipment and accompanying spare parts within the

prescribed period under its law of registration or until

December

31,

1997

whichever

comes first: Provided,

however, That the enterprise which shall register after

December 31, 1994 shall be subject to the provisions of

Republic Act No. 7716, and three percent (3%) customs

duties up to December 31, 1997: Provided, finally, That the

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