PRIMER ON TOURISM - Department of Tourism - The ：在旅游部门的旅游-底漆

PRIMER ON TOURISM - Department of Tourism - The ：在旅游部门的旅游-底漆 PRIMER ON TOURISM INVESTMENT IN THE PHILIPPINES Department of Tourism -Investment Promotion Unit (DOT-IPU) As of December 2001 FOREWORD This primer provides answers to frequently asked questions about investing in tourism in the country. Provided are the laws and regulations that govern tourism investments and the incentives available. Other materials such as area-specific folders, statistics and list of opportunities may be secured upon request. This primer is revised each year reflecting changes made in economic policies and regulations. Changes occurring in midyear would be provided as inserts. Otherwise, questions may be directed to the Department of Tourism-Investment Promotion Unit which is open from 8:00 AM – 6:00 PM, Mondays to Fridays. i TABLE OF CONTENTS Chapter I General Page A. Who may invest _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1 B. What requirements must be complied with before a foreign corporation can do business in the Philippines? _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1 C. What is the general policy of the government for foreign investments? _ 1 D. Are foreigners allowed to lease land? _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1 Chapter II State of Tourism What is the general state of tourism in the Philippines? _ _ _ _ _ _ _ _ _ _ _ 2 Chapter III Tourism Investment Opportunities What are the investment opportunities in the Philippine tourism industry? _ 3 Chapter IV Laws and Incentives Covering Tourism Investments What are the laws and incentives covering tourism investments? _ _ _ _ _ _ 4 A. Executive Order No. 63 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 4 B. Omnibus Investments Code (Executive Order No. 226) _ _ _ _ _ 5 1 Development of Tourism Estates _ _ _ _ _ _ _ _ _ _ _ _ _ 5 2 Establishment of Tourist Accommodation Facilities _ _ _ 5 3 Operation of Tourist Transport Facilities _ _ _ _ _ _ _ _ _ 6 4 Expansion of Existing Tourist Accommodation Facilities _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 6 5 Modernization/Rehabilitation of Tourist Accommodation Facilities _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 6 6 Restoration of Historico-Cultural Heritage Projects _ _ _ 7 C. Foreign Investments Act of 1991 (Republic Act No.7042) _ _ _ 7 D. Build-Operate-Transfer Law (Republic Act No. 7718) _ _ _ _ _ 8 E. Special Economic Zone Act of 1995 (Republic Act No. 7916) _ 9 F. Trade Liberalization Act of 2000 (Republic Act No. 8762) _ _ _ 10 Chapter V Additional Information Department of Tourism _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 10 Philippine Economic Zone Authority _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 11 Board of Investments _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 11 Coordinating Council for Private Sector Participation _ _ _ _ _ _ _ _ _ _ 11 Department of Tourism-Regional Offices _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 12 Department of Tourism-Overseas Offices _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 13 ii PRIMER ON PHILIPPINE TOURISM INVESTMENT Chapter I GENERAL A. Who may invest? Anyone, regardless of nationality, is welcome to invest in the Philippines. With the liberalization of the foreign investment law, 100% foreign equity may be allowed in all areas of investment except those reserved for Filipinos by mandate of the Philippine Constitution and existing laws. B. What requirements must be complied with before a foreign corporation can do business in the Philippines? A foreign corporation must first secure the necessary licenses or registrations from the appropriate government bodies. In the case of corporations or partnerships, the necessary incorporation papers from the Securities and Exchange Commission must first be obtained. In the case of single proprietorship, registration from the Bureau of Trade Regulation & Consumer Protection of the Department of Trade and Industry must be secured. C. What is the general policy of the government for foreign investments? The government recognizes the pivotal role of private sector investments and, thereby, commits to continuously enhance the business climate. Foreign investments are encouraged to fill in capital gaps, help provide employment, increase production, and national income. Investment rules and regulations have thus been liberalized to facilitate entry of foreign investments. 1 D. Are foreigners allowed to lease land? Foreign investors investing in the Philippines can now lease private lands up to 75 years. Based on R.A. No. 7652, lease agreements may be entered into with Filipino landowners. Lease period is for 50 years, renewable once for another 25 years. For tourism projects, the lease shall be limited to projects with an investment of not less than US$5M, 70% of which shall be infused in said project within 3 years from signing of the lease contract. Chapter II STATE OF TOURISM What is the general state of tourism in the Philippines? Tourism in the Philippines has been on the upswing over the last five years judging from growth rates in key performance indicators. Visitor arrivals increased by an average of 2.88% yearly between 1996 and 2000. For the year 2000, visitor arrivals reached 1.992 million, which in turn resulted in visitor receipts totaling US$2.133 billion. Over the years, tourism has been a top foreign exchange generator. Tourism investments endorsed by the Department to concerned government agencies (i.e., Board of Investments and Land Transportation, Franchising and Regulatory Board) reached over Php3.06 billion in 2000 with new projects in the resort, tourism-related establishments and tourist transport operations as well as in hotel development. This figure, however, can easily double if we include investment projects that did not go through the Department of Tourism for endorsement purposes. 2 By and large, the tourism industry continues to be a major contributor to the growth of the Philippine economy. Chapter III TOURISM INVESTMENT OPPORTUNITIES What are the investment opportunities in the Philippine tourism industry? stGlobal tourism is projected to be a mega-industry in the 21 century. Philippine tourism is expected to benefit from this trend as the Asia-Pacific rim continues to enjoy preference by holiday-makers. Hence, there will invariably be greater demand for tourism superstructure, facilities and services. Hotels, resorts and other types of accommodation facilities especially in the regions will have to be built to address the lodging requirements of both foreign and domestic travelers. The need for improved accessibility will likewise open investment opportunities in air, water and land transport operations. In response to worldwide demand for integrated tourism development, the Department of Tourism is also encouraging investments in tourism estates and historico-cultural heritage projects. 3 Chapter IV LAWS AND INCENTIVES COVERING TOURISM INVESTMENTS What are the laws and incentives covering tourism investments? The government has passed the following laws aimed at encouraging more investments: A. Executive Order No. 63 This Executive Order grants incentives to foreigners investing at least US$50,000 in a tourist-related project or in any tourist establishment as determined by the Committee created in the same law. E. O. 63 grants the foreign investor a Special Investor’s Resident Visa (SIRV) for as long as the investment subsists. The E. O. also recognizes the right of the investor to remit earnings from his investment in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance. In case of liquidation, the investor is also allowed to repatriate the entire proceeds of the liquidation of the investment. Lastly, the right of succession is also recognized. An investor may apply for SIRV at the Philippine Embassy or Consulate in his home country or place of residence. If already in the Philippines, the investor may file the application at the Department of Tourism or at the Registration Division of the Board of Investments (BOI). 4 B. Omnibus Investments Code (Executive Order No. 226) This Executive Order authorizes the Board of Investments to grant fiscal incentives (e.g., income tax holiday) to tourism enterprises engaged in the following activities: 1. Development of Tourism Estates By definition, a tourism estate is a large tract of land with defined boundaries in any of the destinations identified in the Philippine Tourism Master Plan. The land should be suitable for the development of an integrated resort complex including accommodations, food and beverage outlets, convention, sports and recreational centers, commercial outlets, among others. It must be provided with roads, water supply facilities, power supply, drainage and sewerage systems and other necessary infrastructure. The estate must be located outside Metro Manila, at least 50 hectares and under a unified and continuous management. 2. Establishment of Tourist Accommodation Facilities Tourist accommodation facilities include hotels, resorts, inns, pensionnes, and special interest resorts outside Metro Manila. 5 New projects can qualify for a pioneer status if they satisfy the following: TYPE OF MINIMUM PROJECT FACILITY COST Less Developed Elsewhere (excluding Metro Manila) Area De Luxe/First US$50,000/room US$100,000/room Class Hotels Class AAA US$5 M per US$10 M per resort Resort resort Projects not meeting the aforementioned prescribed minimum project cost may only be classified under a non-pioneer status. 3. Operation of Tourist Transport Facilities (Tourist Buses) Application for registration should be accompanied by a proof of filing an application with the Land Transportation Franchising Regulatory Board (LTFRB). Buses must be brand new and suited to local conditions. 4. Expansion of Existing Tourist Accommodation Facilities Expansion projects shall be eligible for registration if they involve the addition of guestrooms exceeding 25% of existing facilities of a tourist accommodation facility and located outside Metro Manila. 5. Modernization/Rehabilitation of Tourist Accommodation Facilities A modernization/rehabilitation program involves the upgrading/modification and/or restoration to the original condition the facilities/structures/amenities of tourist accommodation facilities outside Metro Manila to conform with the classification requirements of the Department of Tourism. 7 6. Historico-Cultural Heritage Projects These projects cover restoration, conservation or preservation of historical and cultural sites and properties identified, classified and declared as such by the National Historical Institute and/or by the National Museum. C. Foreign Investments Act of 1991 (Republic Act No. 7042 as Amended by Republic Act No. 8179) With the passage of the Foreign Investments Act, foreign nationals are now allowed to invest up to 100% equity participation in new or existing economic activities including tourism business. However, operation and management of public utilities (i.e. land, air, and water transport) is still limited up to 40% foreign equity as required by the Philippine Constitution. D. Build-Operate-Transfer (BOT) Law (Republic Act No. 6957 as amended by Republic Act No. 7718) The BOT Law authorizes the financing, construction, operation and maintenance of infrastructure projects by the private sector. It allows national implementing agencies and local government units to enter into BOT arrangement as a means of encouraging the participation of foreign and local companies in the country’s infrastructure development program. Tourism estates including related infrastructure facilities and utilities are among the priority projects eligible for BOT implementation. 7 Backed up by a wide range of credit enhancements and investment incentives, the BOT Law opened to the private sector a new window of investment opportunity. Salient points of the amended BOT Law include the following: 1. Provides flexibility to both the government and private sector by allowing the use of a variety of arrangements under the BOT scheme to suit specific conditions; 2. Broadens the type and variety of projects that can be implemented under the BOT process; 3. Recognizes the need for private investors to realize rates of return reflective of market conditions; 4. Institutionalizes government support for BOT projects; and 5. Allows government agencies and local government units (LGUs) to accept unsolicited proposals. The BOT Law mandated the Coordinating Council of the Philippine Assistance Program (CCPAP) of the BOT Center to coordinate and monitor all projects undertaken under RA 7718. By virtue of Administrative Order No. 67 issued by then President Joseph E. Estrada on May 11, 1999, CCPAP was reorganized and converted to the Coordinating Council for Private Sector Participation (CCPSP). In view of this development, CCPSP is empowered to actively promote all modes of private sector participation in the implementation of development in the country. AO No. 67 expands the coverage of the program to include the BOT scheme, joint venture agreement, concession agreement, lease and contractual management, among others. 8 CCPSP is specifically involved in: 1. Project development 2. Policy advocacy 3. Institution-building 4. Marketing and promotions 5. Monitoring E. Special Economic Zone Act of 1995 (Republic Act No. 7916) This Republic Act provides for the legal framework and mechanism for the creation, operation, administration and coordination of Special Economic Zones in the Philippines, creating for this purpose, the Philippine Economic Zone Authority (PEZA) and for other purposes. Incentives available are: a. Full 100% foreign ownership of locator-enterprises; b. Income tax holiday (ITH) for six years for pioneer firms and four years for non-pioneer firms. If a non-pioneer firm is located in a less developed area, it shall be entitled to 6 years ITH; c. After the ITH period, the option to pay a Special 5% Tax on Gross Income, in lieu of all national and local taxes; d. Full exemption from taxes and duties on imported machinery and equipment, and spare parts; e. Domestic sales allowance of up to 30% of total sales; f. Resident visa for investors, spouses and dependent children; g. Employment of foreign nationals; h. Simplified import procedures; i. World-class utilities and industrial facilities; and j. Other incentives as may be determined by the PEZA Board. 9 F. Trade Liberalization Act of 2000 (Republic Act No. 8762) This is an act liberalizing the retail trade business, repealing for the purpose Republic Act No. 1180, as amended, and for other purposes. With the enactment or implementation of the Trade Liberalization Act of 2000, foreign equity in restaurants is now allowed, to wit: a. Enterprises with a minimum paid-up capital of US$2.5 million but less than US$7.5 million may be allowed 60% foreign equity for the first two years of implementation of the R. A. No. 8762. b. Enterprises with a paid-up capital of US$7.5 million or more may be wholly owned by foreigners. Chapter V ADDITIONAL INFORMATION For more details, please get in touch with: Department of Tourism - Investment Promotion Unit ndRoom 205, 2 Floor, DOT Building T. M. Kalaw St., Rizal Park, Ermita, Manila Telephone Nos.: (632) 523-3722, (632) 524-1694 (632) 5238411 locals 196, 188 Telefax: (632) 521-8321 e-mail: dotebpantig@info.com.ph Internet Homepage: , or 10 c/o Office of Tourism Coordination thRoom 421, 4 Floor, DOT Bldg. T. M. Kalaw St., Rizal Park, Ermita, Manila Telephone Nos.: (632) 526-7653, (632) 526-7654 (632) 5238411 locals 279, 280, 281 Telefax: (632) 5242103 e-mail: otc@tourism.gov.ph jasevilla@tourism.gov.ph, eamacayayong@tourism.gov.ph c/o Office of Tourism Standards ndRoom 204, 2 Floor, DOT Bldg. T. M. Kalaw St., Rizal Park, Ermita, Manila Telephone Nos.: (632) 525-3257, (632) 524-9824 (632) 5238411 locals 270 Fax Nos.: (632) 521-1088 e-mail: mvjasmin@tourism.gov.ph Philippine Economic Zone Authority Roxas Blvd. Corner San Luis St. Pasay City Tel. Nos.: (632) 551-3454, (632) 551-3455,(632) 551-3432 Fax Nos.: (632) 891-6380, (632) 551-3436 e-mail: info@pezat.gov.ph Board of Investments One-Stop-Action Center (OSAC) Ground Floor, Industry and Investments Building 385 Sen. Gil Puyat Avenue, Makati City Tel. Nos.: (632) 895-8322, (632) 896-7342 Fax No.: (632) 895-8322 e-mail: osac@boi.gov,ph, , aebatallones@dti.ph Coordinating Council for Private Sector Participation th6 Floor, EDPC Building, Bangko Sentral ng Pilipinas Complex Ermita 1000, Manila Tel. Nos.: (632) 521-4262, 521-9287 Telefax Nos.: (632) 525-4021, (632) 521-9288 Fax Nos: (632) 521-4285 Internet homepage: e-mail: info@ccpsp.org 11 DIRECTORY OF PHILIPPINE DEPARTMENT OF TOURISM-REGIONAL OFFICES NATIONAL CAPITAL REGION REGIONAL OFFICE IV REGIONAL OFFICE VIII Rm. 207, T.M. Kalaw St. Rm. 208, T.M. Kalaw St. Children’s Park Ermita, Manila Ermita, Manila Sen. Enage Street Tel. # 5242345/5256114/5246566 Tel. No. 5241969/5238411 loc. 183 6500 Tacloban City 5238411 local 197 Fax No.: 526-7656 Tel. No. 3212048/3214333 Fax No. 5248321/521-1088 E-mail: lcjurilla@tourism.gov.ph Telefax No. 3255279 Airport Tel. No. 832-2964 Area Code – 053 Airport Fax No. 832-1687 E-mail: dotr8@mozcom.com Tourist Security Div. 5241660/5241728 E-mail: ncr@tourism.gov.ph CORDILLERA ADM. REGION REGIONAL OFFICE V REGIONAL OFFICE IX DOT-Complex, Gov. Pack Road Rawis, 4500 Legazpi City Lantaka Hotel By the Sea 2600 Baguio City Tel. No. 482-0712/482-0813/4820811 Valderossa Street Tel.: 442-6708/442-7014 Fax No. 820-5066 7000 Zamboanga City D.L. 442-8848 Area Code – 052 Tel. No.: 9910218/993-0029 to 30 Fax No.: 442-8848 E-mail: dotr5@globalink.net.ph Fax No.: 993-0030 Area Code – 074 Area Code – 062 E-mail: dotcar@mozcom.com E-mail: dotr9@jetlik.com.ph REGIONAL OFFICE I REGIONAL OFFICE VI REGIONAL OFFICE X Oasis Country Resort Western Visayas Tourism Center, Capitol A.Velez Street National Highway, Brgy. Sevilla Ground, Bonifacio Drive 9000 Cagayan de Oro City San Fernando, 2500 La Union 5000 Iloilo City Tel. No. 725394/723696/ Tel. No. 8882411 Tel. No. 3375411/5093550 Fax No. 723696 or 727432 (c/o PTA) Fax No. 8882098 Telefax No. 335-0245 Area code – 08822 Area Code – 072 Area Code – 033 E-mail: dot10@cdo.weblinq.com E-mail: dotregion1@sflu.com E-mail: deptour6@iloilo.net/ Website: dot6@pp.cbu.skyinet.net Website: LAOAG SUB-OFFICE BACOLOD FIELD OFFICE REGIONAL OFFICE XI Ilocano Heroes Memorial Hall Bacolod Plaza, Bacolod City Door No. 7 2900 Laoag City Tel. No.: 29021 Magsaysay Park Complex Chicago, Illinois, 60602 Fax No.: 434-7472 Sta. Ana District, 8000 Davao City Tel. No.: 7720467 Area Code - 034 Tel. No. 2216798/2216955/2210070 Area Code – 077 Fax No. 2210070/2216798 Area Code – 082 E-mail: dotr11@mozcom.com REGIONAL OFFICE II BORACAY FIELD OFFICE REGIONAL OFFICE XII nd 2/F, Tuguegarao Supermarket Balabag, Boracay, 2Floor, COMSE Building Tuguegarao, 3500 Cagayan Malay, 5608Aklan Quezon Avenue Tel. No. 844-5364/844-1621 Telefax # 288-3689 9600 Cotabato City Fax No. 846-2435 Area Code - 036 Tel No. 4211110/4217868 Fax No. 4217868 Area Code – 078 Area Code – 064 REGIONAL OFFICE III REGIONAL OFFICE VII REGIONAL OFFICE XIII Paskuhan Village Ground Flr. LDM Building D & V Plaza II Bldg. San Fernando, 2000 Pampanga Lapu-lapu street, 6000 Cebu City J.C. Aquino Avenue Tel. No. 9612665 Tel No.: 2542811/2546077/2546650 City Hall Compound Telefax No. 9612612 Fax No.: 2542711 8600 Butuan City Area Code – 045 Airport Office Tel No. 340-8229 Tel. No. 225-5712/225-6201/341-6371 E-mail: dotr3@mail.irnet.net.ph Area Code – 032 Telefax No. 225-5712 Website: : dotpabr@cvis.net.ph, Area Code – 085 dotr7@cvis.net.ph Email: dot13@mnd-fmail.webquest.com DIRECTORY OF PHILIPPINE DEPARTMENT OF TOURISM-OVERSEAS OFFICES NEW YORK OFFICE TOKYO OFFICE SYDNEY OFFICE PHILIPPINE TOURISM CENTER EMBASSY OF THE PHILIPPINES PHILIPPINE DEPARTMENT OF 556 Fifth Avenue, New York 5-15-5 Roppongi, Minato-Ku TOURISM New York 10036, U.S.A. Tokyo 106-85-37, Japan Level 1 Philippine Centre Tel. : (1)(212) 575-7915 Tel. : (81)(3) 5562-1583/1584 27-33 Wentworth Avenue Fax No.(1)(212) 838-4956 Fax No.: (81)(3) 5562-1593 Sydney, NSW 2000, Australia E-mail: PDOTNY@aol.com E-mail: dotjapan@gol.com Tel. No. : (612) 9283-0711 9283-0938 to 39 Fax No. : (612) 9283-0755 E-mail: ptsydney@pop.ozemail.com.au LOS ANGELES OFFICE OSAKA OFFICE FRANKFURT OFFICE PHILIPPINE CONSULATE GENERAL PHILIPPINE TOURISM CENTER PHILIPPINE DEPARTMENT OF 3660 Wilshire Blvd., 900 2F Dainan Bldg. TOURISM Suite 216, Los Angeles 2-19-23 Shinmachi, Nishi-ku Kaiserhof Strasse 7 California 90010, U.S.A. Osaka 500, Japan D-60313 Frankfurt am Main Tel.: (1)(213) 487-4527 Tel. (81) (66) 535-5071 to 5072 Germany Tel. No.: (49) (69) 20893/20894 Fax No.: (1)(213) 386-4063 Fax No. : (81)(66) 535-1235 Fax No.: (49)(69) 285127 E-mail: pdotla@aol.com E-mail: dotosaka@osk3.3webnet.or.jp Postal Code: 0013 E-mail: phildot-fra@t-online.de SAN FRANCISCO OFFICE HONG KONG OFFICE LONDON OFFICE PHILIPPINE CONSULATE GENERAL OFFICE OF THE TOURISM CENTER PHILIPPINE DEPT. OF TOURISM 447 Sutter St., 5/F, Suite 507 Philippine Consulate General 146 Cromwell Road San Francisco, California 94108 Room 602, 6/F, United Centre SW7 4EF United Kingdom U.S.A. 95 Queensway, Hong Kong Tel. No.: (44)(207) 835-1100 Tel. : (1)(415) 956-4060 Tel. No.: (852) (2)8667643/44 Fax No. : (44)(207) 835-1926 Fax No.: (1)(415) 956-2093 Hotline: (852) (2) 8667665 E-mail: tourism@pdot.co.uk E-mail: pdotsf@aol.com Fax No. : (852) 866-65-21 E-mail: pdothk@asiaonline.net CHICAGO OFFICE KOREA PARIS OFFICE Philippine Consulate General #403 Renaissance Building, 1598-3 Service de Tourisme Suite 913, 30 North Michigan Avenue Socho-dong, Socho-ku, Seoul (137-Ambassade des Philippines Chicago, Illinois, 60602 070) 3 Faubourg Saint Honoré Tel. No.: (1)(312) 782-2475 Korea 75008 Paris, France Fax No.: (1)(312) 786-2476 Tel. No.: (882) 598-2290 Tel. No. (331) 4265-0234/4265-0235 E-mail: pdotchi@aol.com Fax No.: (882) 598-2293 Fax No. (331) 4265-0238 E-mail: dotpar@club-internet.fr TAIWAN OFFICE SINGAPORE OFFICE MANILA ECONOMIC & CULTURAL EMBASSY OF THE PHILIPPINES OFFICE Philippine Tourism Office MECO Taipei Tourism Center 400 Orchard Road 4/F Metrobank Plaza, #06-24 Orchard Towers 107 Chung Hsiao E. Road, Section 4, Singapore 238875 Taipei, Taiwan, R.O.C. Tel. No. : (65) 7387165 Tel. No.: 886 (2) 2741-5994 Mobile Phone (65) 9631734 Fax No.: 886 (2) 2773-5724 Fax No.: (65) 7382604 DL : (02) 7415994 E-mail: philtours_sin@pacific.net.sg