The government has passed the following laws aimed at encouraging more investments –

Tourism Act of 2009 (Republic Act No. 9593)

The State declares tourism as an indispensable element of the national economy and an industry of national interest and importance, which must be harnessed as an engine of socioeconomic growth and cultural affirmation to generate investment, foreign exchange and employment, and to continue to mold an enhanced sense of national pride for all Filipinos. To this end, the Tourism Act of 2009 was passed on 12 May 2009, granting fiscal and non-fiscal incentives to tourism business, including income tax holiday of up to six years, and employment of foreign nationals, among others

One of the salient features of this law is also the establishment of “Tourism Enterprise Zones” or TEZs, which are geographical areas, sufficient in size and capable of being defined into one contiguous territory, and are identified as viable tourism destinations in view of their historical and cultural significance, environmental beauty, existing or potential integrated leisure facilities, reasonable distances, accessibility to transportation infrastructures and strategic location, such as to catalyze the socioeconomic development of their neighboring communities.

Tourism enterprises within the TEZ shall register with the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) for purposes of availment of the incentives provided under the law.

Click here for a full text of the law and implementing rules.

Incentives for Foreign Investment in Tourist-Related Projects and Tourist Establishments (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recognizes the right of the investor to remit earnings from his investment in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance.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investor is also allowed to repatriate the entire proceeds of the liquidation of the investment in which the investment originally made. 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 for endorsement to the Bureau

Omnibus Investments Code (Executive Order No. 226)

This Executive Order authorizes the Board of Investments to grant fiscal incentives and non-fiscal incentives for local and foreign investors engaged in tourism activities listed under the current Investments Priorities Plan (IPP). Incentives granted include income tax holiday (up to 4 years for non-pioneer projects and 6 years pioneer projects) and the employment of foreign nationals.

Foreign Investments Act of 1991 (Republic Act 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 restaurant operations that are incidental to the hotel business.

Foreign equity participation of up to 40% is allowed in the operation and management of utilities (i.e. land, air, and water transport).

Build-Operate-Transfer (BOT) Law (Republic Act 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.

Special Economic Zone Act of 1995 (Republic Act 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.

On October 7, 2002, the DOT entered into a Memorandum of Agreement (MOA) with PEZA that will grant Special Economic Zone status to tourism development zones and tourism estates upon registration with PEZA subject to the issuance of the required Presidential Proclamation.

The PEZA shall consider for registration tourist-oriented enterprises to be located in PEZA-registered tourism development zones/tourism estates which are enclosed by the DOT as enterprises that will be established and operated with foreign tourists as primary clientele.

Retail 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, up to 100% foreign equity participation in restaurants is now allowed for enterprises with a paid-up capital of US$2.5 million.