If you’re an entrepreneur in Cebu looking to grow your business while maximizing government support, registering with the Board of Investments (BOI) can open the door to powerful legal and financial advantages.
As a business lawyer would say — knowledge of your rights and benefits under the law is just as valuable as capital itself. The BOI provides a framework that rewards innovation, investment, and expansion through a variety of fiscal and non-fiscal incentives.
Let’s explore the key BOI incentives every Cebu entrepreneur should know about — and how these can directly benefit your enterprise.
1. Income Tax Holiday (ITH)
One of the most attractive incentives under the Omnibus Investments Code (Executive Order No. 226) and the CREATE Act (Republic Act No. 11534) is the Income Tax Holiday (ITH).
Qualified BOI-registered enterprises are exempt from paying income tax for a period of four to six years, depending on the nature and location of the project.
👉 For Cebu entrepreneurs, this means retaining more of your profits for reinvestment — especially if your business operates in priority sectors like manufacturing, information technology, renewable energy, or export services.
📌 Legal Note: The ITH period may be extended for projects that meet performance criteria or are located in less developed areas.
2. Duty-Free Importation of Capital Equipment
BOI-registered companies are allowed to import capital equipment, spare parts, and accessories tax- and duty-free, provided these are not locally available in sufficient quantity or quality.
For Cebu businesses setting up factories, restaurants, or production facilities, this incentive can reduce startup costs by hundreds of thousands of pesos.
📜 Legal Basis: Section 105 of the Tariff and Customs Code of the Philippines grants such exemption to BOI-registered firms certified by the Department of Trade and Industry (DTI).
3. Employment of Foreign Nationals
The BOI allows the employment of foreign nationals in supervisory, technical, or advisory positions for up to five years from registration — or longer if indispensable to operations.
This provision helps Cebu-based enterprises access global expertise while ensuring compliance with Labor Code and Alien Employment Permit (AEP) regulations.
📌 Pro Tip: Always maintain proper documentation, as unauthorized employment of foreign nationals can lead to cancellation of BOI incentives.
4. Simplified Customs and Import Procedures
BOI-registered firms enjoy expedited customs clearance and streamlined importation processes, minimizing logistical delays.
This is particularly beneficial for Cebu exporters and manufacturers who rely on timely importation of raw materials or specialized machinery.
Such privileges reduce red tape — a practical advantage enshrined in the government’s Ease of Doing Business Act (RA 11032).
5. Exemption from Wharfage Dues and Export Tax
Businesses engaged primarily in export may also be exempted from wharfage dues and export taxes, further reducing operational costs.
For Cebu’s strategic port operations, this incentive enhances global competitiveness for exporters of furniture, seafood, garments, and IT-enabled services.
6. VAT Zero-Rating on Certain Transactions
Under the CREATE Act, registered business enterprises may qualify for VAT zero-rating on local purchases of goods and services directly related to their registered project.
For Cebu entrepreneurs, this can translate into substantial savings and smoother cash flow management — especially for startups and SMEs dealing with suppliers.
7. Additional Deductions and Incentives
BOI-registered firms can also enjoy:
Additional deduction for labor expense (up to 50%) if located outside Metro Manila, such as in Cebu;
Deduction for necessary training expenses to improve productivity;
Accelerated depreciation on capital equipment.
These incentives are designed to stimulate both employment and economic development in regional areas like Cebu.
Why Cebu Entrepreneurs Should Care
Cebu is not only a tourism hub — it’s a fast-rising investment destination in the Visayas. BOI incentives give local businesses the legal advantage to compete regionally and globally.
Whether you’re in tech, manufacturing, or export trade, BOI registration ensures your enterprise enjoys legitimate tax relief, faster growth, and stronger investor confidence.
Final Thoughts
Understanding BOI incentives is more than a compliance step — it’s a strategic legal tool for growth. Every Cebu entrepreneur should consult a qualified business lawyer or accredited BOI consultant to determine eligibility and secure these benefits properly.
With proper guidance, your business can not only stay compliant but also thrive under the protection and privileges granted by Philippine investment law.
Navigating the business landscape in the Philippines can be both rewarding and intricate. Whether you’re embarking on a new venture or scaling up, ensuring that your corporate endeavors are in line with local regulations is paramount.
At CBOS Business Solutions Inc., we pride ourselves on simplifying these processes for our clients. As a seasoned professional services company, we offer comprehensive assistance with SEC Registration, Visa processing, and a myriad of other essential business requirements. Our team of experts is dedicated to ensuring that your business is compliant, well-established, and ready to thrive in the Philippine market.
Why venture into the complexities of business registration and compliance alone? Allow our team to guide you every step of the way. After all, your success is our commitment.
Get in touch today and let us be your partner in achieving your business goals in the Philippines.
Email Address: gerald.bernardo@cbos.com.ph
Mobile No.: +639270032851
You can also click this link to schedule a meeting.
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