MALACAÑANG
M a n i l aPRESIDENTIAL DECREE No. 218 June 16, 1973
PRESCRIBING INCENTIVES FOR THE ESTABLISHMENT OF REGIONAL OR AREA HEADQUARTERS OF MULTI-NATIONAL COMPANIES IN THE PHILIPPINES
WHEREAS, it would be desirable to make of the Philippines the business and financial capital of Southeast Asia, thereby hastening the economic and social development of the Philippines, which objective can be accomplished by attracting the regional or area headquarters of multinational companies to base their offices in the Philippines;
WHEREAS, the said headquarters do not earn or derive any income from the host country and all their expenses are financed by their head offices or parent companies;
WHEREAS, the attainment of the aforesaid goal will mean additional foreign exchange receipts to the Philippines, a boost to air travel, new construction and real estate development, new job opportunities, increase in local tourism and potential investors;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all Armed Forces of...
Details
Amends
n/a
Amended by
n/a
Presidential Decrees
Prescribing Incentives For The Establishment Of Regional Or Area Headquarters Of Multi-National Companies In The Philippines
Presidential Decree No. 218
SUMMARY OF PRESIDENTIAL DECREE NO. 218
Incentives for Establishing Regional or Area Headquarters of Multinational Companies in the Philippines
- Objective: To attract regional or area headquarters of multinational companies to base their offices in the Philippines, promoting economic and social development.
I. Immigration and Visa Benefits (Section 1):
• Foreign personnel of regional headquarters, their spouses, and unmarried children under 21 shall be issued a multiple entry visa valid for 1 year.
• Requirements: Certificate from the company stating the person is an executive working exclusively for the regional headquarters, and will receive a salary of at least $12,000 per annum paid in the Philippines.
• Stay is extendable yearly upon certification that the license is valid, the executive was paid at least $1,000 per month in the Philippines, and taxes were withheld and paid.
• Exemptions: Payment of immigration and alien registration fees, securing alien certificates, obtaining emigration clearances, and other government clearances (except tax clearance upon final departure).
II. Income Tax Provisions (Sections 2-4):
• 15% tax on gross income received by alien individuals employed by regional headquarters. (Section 2)
• Regional headquarters not subject to tax on income not derived from the Philippines. (Section 3)
• 15% tax to be withheld at source on gross salaries of alien employees. (Section 4)
III. Contractors Tax Exemption (Section 5):
• Regional headquarters and their alien executives are exempt from the 3% contractors tax on gross receipts, as they do not earn income from the Philippines.
IV. Customs and Local Tax Exemptions (Sections 6-7):
• Alien executives enjoy privileges extended to foreigners settling in the Philippines for the first time under the Tariff and Customs Code. (Section 6)
• Regional headquarters are exempt from all local licenses, fees, dues, imposts, or other local taxes. (Section 7)
V. Licensing and Requirements (Section 8):
• Foreign entities may establish regional headquarters in the Philippines after securing a license from the Securities and Exchange Commission (SEC) upon recommendation from the Secretary of Trade.
• Requirements: (a) Certification from Philippine Commercial Attache or Consul that the foreign firm is engaged in international trade with affiliates in the Asia-Pacific Region, (b) Certification from the foreign entity authorizing establishment of regional headquarters in the Philippines with limited activities, (c) Undertaking to remit at least $50,000 annually to cover operations, and (d) Compliance with rules and regulations.
• Violation of provisions may lead to cancellation of license.
VI. Other Provisions (Sections 9-11):
• Regional headquarters are exempt from the provisions of Republic Act No. 5455. (Section 9)
• Inconsistent provisions of existing laws are modified or repealed accordingly. (Section 10)
• The Decree takes effect immediately. (Section 11)
Incentives for Establishing Regional or Area Headquarters of Multinational Companies in the Philippines
- Objective: To attract regional or area headquarters of multinational companies to base their offices in the Philippines, promoting economic and social development.
I. Immigration and Visa Benefits (Section 1):
• Foreign personnel of regional headquarters, their spouses, and unmarried children under 21 shall be issued a multiple entry visa valid for 1 year.
• Requirements: Certificate from the company stating the person is an executive working exclusively for the regional headquarters, and will receive a salary of at least $12,000 per annum paid in the Philippines.
• Stay is extendable yearly upon certification that the license is valid, the executive was paid at least $1,000 per month in the Philippines, and taxes were withheld and paid.
• Exemptions: Payment of immigration and alien registration fees, securing alien certificates, obtaining emigration clearances, and other government clearances (except tax clearance upon final departure).
II. Income Tax Provisions (Sections 2-4):
• 15% tax on gross income received by alien individuals employed by regional headquarters. (Section 2)
• Regional headquarters not subject to tax on income not derived from the Philippines. (Section 3)
• 15% tax to be withheld at source on gross salaries of alien employees. (Section 4)
III. Contractors Tax Exemption (Section 5):
• Regional headquarters and their alien executives are exempt from the 3% contractors tax on gross receipts, as they do not earn income from the Philippines.
IV. Customs and Local Tax Exemptions (Sections 6-7):
• Alien executives enjoy privileges extended to foreigners settling in the Philippines for the first time under the Tariff and Customs Code. (Section 6)
• Regional headquarters are exempt from all local licenses, fees, dues, imposts, or other local taxes. (Section 7)
V. Licensing and Requirements (Section 8):
• Foreign entities may establish regional headquarters in the Philippines after securing a license from the Securities and Exchange Commission (SEC) upon recommendation from the Secretary of Trade.
• Requirements: (a) Certification from Philippine Commercial Attache or Consul that the foreign firm is engaged in international trade with affiliates in the Asia-Pacific Region, (b) Certification from the foreign entity authorizing establishment of regional headquarters in the Philippines with limited activities, (c) Undertaking to remit at least $50,000 annually to cover operations, and (d) Compliance with rules and regulations.
• Violation of provisions may lead to cancellation of license.
VI. Other Provisions (Sections 9-11):
• Regional headquarters are exempt from the provisions of Republic Act No. 5455. (Section 9)
• Inconsistent provisions of existing laws are modified or repealed accordingly. (Section 10)
• The Decree takes effect immediately. (Section 11)