What are the regulations and incentives for Investing in Bacolod City?

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What are the regulations and incentives for Investing in Bacolod City?

The Bacolod Investment Code, or the City Ordinance No. 323, was passed in 2002 to lay

down the legal framework and mechanism for integrating the investment incentives laws of

the national government with the local development initiative; spread development from the

urban areas to undeveloped and underdeveloped areas of the city; promote the flow of

investors both foreign and local, thus generating employment opportunities and providing

backward and forward linkages among industries in the city, province and the rest of the

country. The Code aims to transform selected areas of Bacolod into highly developed Agri-

industrial, Industrial, Commercial, Tourist, Investment and Financial Centers in the province,

the region and the country. Balanced development and the general welfare of the people

through rationalized land use is also an objective of the Code. To encourage local

entrepreneurs and to attract outside investors, the City offers incentives for new investments

and expansion and diversification projects. A qualified investor may enjoy up to five years of

exemption from local business taxes and real property taxes on improvements. The number

of years of exemption depends on the classification of the project, and the capital invested in

relation to the number of employees hired or to be hired. What investments qualify for

incentives? Tax exemptions are available for investors entitled to incentives under National

Laws (E.O. 236, RA 7844, RA 7916, RA 7718, and RA 8289, investors in preferred areas of

investment, investors

locating non-

preferred

investments in

growth and priority

development areas,

and those not

otherwise qualified

for incentives but

who meet the

capitalization and

employment

generation

requirements of the

CODE.

PREFERRED INVESTMENTS; Preferred Investments entitled to the tax exemptions are the following: Manufacture of Agro- based products such as: * Canned food products * Dried Fruit Processing * Sweets, candies and condiments Manufacture of dandicraft products like: * Toys * Ceramics * Furniture * Garments Tourism-related businesses

Investors who are expanding in or diversifying to a preferred investment growth and priority

development areas pursuant to the City Land Use Plan are also qualified for the same

incentives which run from 3 to 5 years. Among the requirements for incentive availment is

that the investment must have a capitalization of at least P 1.5 million but not more than P

15 million for small-sized enterprises, a ratio of at least 1 employee per P600,000 invested,

and a minimum of ten employees. Medium sized enterprises with capitalization of P 15 million

but not more than P 60 million should have a apital/employment ratio of at least one per

million. Large scale enterprises with capitalization of over P60 million are required to have a

capital/employment ratio of at least one per P1.5 million. Enterprises employing the minimum

required are entitled to 3 years of exemption, while those employing 175% of the number

required enjoy four years. The five year incentive is given to businesses employing 250% of

the minimum required.

Non-Preferred Investment

Non-preferred investments in growth and priority development areas are also entitled to

incentives if they meet capital and employment generation requirements. The same ratios as

for preferred investments are applicable, however the period of the exemption ranges from 1

year to 3 years instead of 3 to 5 years. Other Investors

Investors who are not qualified for incentives under preceding sections may still be granted

tax breaks if the investment is pursuant to the purpose, intent, and objective of the Code and

capitalization and employment generation requirements are met. In this case, a business with

capitalization of P1.5M to P10M should have at least 20 workers to enjoy a year of exemption;

P10.01 M to P35.0 M and 21 to 70 workers to enjoy 2 years of exemption; P35.01 M to P60.0

M and 71 to 120 workers for 3 years of exemption; and over P60 M and 121 workers for the

maximum 4 year period of exemption.

Like: *Mid range hotels * Beach resorts * Theme parks * Marina * Tourist transport utilities Property development projects like: * Commercial complexes * Office buildings * Retirement Villages * Convention centers * Private industrial estates * Economic zones

* Agriculture/aquaculture food terminals * Hospitals Transshipment facilities such as but not limited to: * Airport & seaport infrastructure * Common bonded warehouses * Shipping facilities * Ship repair * Ship berthing Metal and foundry shops Education-related entities but not limited to: new educational facilities and bookstores Printing/Publishing Others: high value crops