WFH guidelines
Transfer registration from IPAs to BOI
Guidelines for RBEs in IT-BPM Sector


Due to the covid-19 pandemic, registered business enterprises (RBEs) in the information technology-business process management (IT-BPM) sector have adopted work from home (WFH) arrangements to continue business operations. Now that movement restrictions have been relaxed, a balance must be struck between the requirement for RBEs to operate within economic zones and the clamour of RBEs to continue hybrid work arrangements while maintaining their fiscal incentives.

The Fiscal Incentives Review Board (FIRB), chaired by the Secretary of Finance, recognises that the WFH setup is the new business model for the IT-BPM industry and that it is time to resolve the industry's long-standing issue on tax incentive claims while performing business activities outside of their economic zone. Together with the Department of Trade and Industry (DTI) and the Philippine Economic Zone Authority (PEZA), the FIRB has released guidelines allowing RBEs in the IT-BPM sector to adopt a 70-30 WFH arrangement until 31 December 2022 and to transfer their registration from the investment promotion agencies (IPAs) to the Board of Investments (BOI) without loss of tax incentives by 31 December 2022.

WFH guidelines

On 14 September 2022, the FIRB issued Resolution No. 26-2022 further extending the effect of FIRB Resolution No. 17-2022, which temporarily allowed RBEs in the IT-BPM sector to adopt a 70-30 WFH arrangement. RBEs in this sector are allowed to adopt WFH arrangements not exceeding 30% of their total workforce until 31 December 2022. RBEs must still comply with the conditions prescribed in the earlier FIRB Resolutions No. 19-21, No. 17-22 and other relevant issuances.

Under FIRB Resolution No. 17-22, the number of employees under a WFH arrangement must not exceed 30% of the total workforce of the RBE. The remaining 70% of the total workforce must render work or service within the geographical boundaries of the ecozone or freeport zone being administered by the IPA where the project/activity is registered. The term "total workforce" refers to the total number of employees that are directly or indirectly engaged in the registered project or activity of the RBE. It does not include third-party contractors rendering janitorial, security or other similar services.

Transfer registration from IPAs to BOI

FIRB Resolution No. 26-2022 also granted RBEs in the IT-BPM sector the option to transfer their registration from the IPA administering an economic zone or freeport zone (such as PEZA) to the BOI until 31 December 2022. Through this resolution, the FIRB provides a more permanent solution to the request of RBEs in the IT-BPM sector to adopt more flexible work arrangements on a long-term basis.

However, only those RBEs with remaining tax incentives under section 311 of the National Internal Revenue Code, as amended, or those with approved incentives on or before 14 September 2022 under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act shall be allowed to transfer their registration. Although RBEs registered with the IPA and the BOI would receive the same incentives under the CREATE Act, what makes this an attractive option is that RBEs which transfer their registration to the BOI will be able to adopt a 100% WFH arrangement beyond 31 December 2022. Monitoring of the RBE's compliance and profit of their remaining incentives remains with the IPA where they are located, even after the transfer of the RBE's registration to the BOI.

Guidelines for RBEs in IT-BPM Sector

On 18 October 2022, the DTI issued DTI Memorandum Circular No. 22-19 which provides guidelines on the registration with the BOI of existing RBEs in the IT-BPM sector pursuant to FIRB Resolution No. 26-22. The PEZA subsequently issued Memorandum Circular No. 2022-067(1) and Circular No. 2022-070, which provide additional guidelines on the transfer of registration of PEZA-registered RBEs to the BOI.

The procedure to transfer registration to the BOI is as follows:

  • the RBE's original certificate of registration with terms and conditions or agreement issued by the concerned IPA; and
  • the "request to register with BOI" form duly completed by the RBE.
  • After compliance with the required endorsement and payment of the 2,250 Philippine peso fee, the BOI will issue the BOI certificate of registration indicating the remaining tax incentives and the period of entitlement thereof to the transferee RBE. The BOI certificate of registration will include an annotation of the original IPA certificate of registration. The original certificate of registration issued by the IPA will likewise include a corresponding annotation of the BOI certificate of registration. The effective date of the BOI registration will be the date indicated in the official receipt for the payment of the fee.
  • The concerned IPA will continue to administer the remaining incentives of the transferee RBEs within the corresponding period of entitlement as indicated in the issued BOI certificate of registration. PEZA will continue to:
    • administer fiscal incentives (ie, validation of Income Tax Holiday, Value Added Tax certifications and other applicable certificates) of the transferee RBEs; and
    • provide the transferee RBEs' non-fiscal incentives (ie, the PEZA Visa, automated import, issuance of building permits and others).
  • The concerned IPA will monitor the transferee RBEs' compliance with the terms and conditions of registration. The BOI, when necessary, may require the concerned IPA to provide a report on the compliance of the RBEs and the profit of their tax incentives.
  • The RBE or concerned IPA must immediately report any findings of violations decided by the concerned IPA or by final resolution of the courts affecting the operations of the project. Any misrepresentation or falsification in the documents or other supporting papers submitted to the BOI, or failure to maintain qualifications for registration will constitute a ground for cancellation of the registration.
  • The transferee RBE shall ensure that the number of its laptops or other equipment outside the ecozone or freeport does not exceed the number of its employees under the WFH arrangement. Upon approval by the IPA, additional laptops or other equipment may be allowed if reasonably needed to perform the registered project or activity. Within 30 days from the issuance of the BOI certificate of registration, covered RBEs must submit to the concerned IPA a list of equipment or other assets brought into the ecozone or freeport, including the quantity, acquisition cost, book value, year of acquisition and the total number of employees under the WFH arrangement. For purposes of registration with the BOI, no bond is required for the movement of equipment within and outside the ecozones or freeports.

PEZA MC 2022-067 clarifies that PEZA rules and regulations will continue to apply to the operations of the transferee RBE, including:

  • the approval of the start of commercial operations;
  • submission of reportorial requirements;
  • movement of equipment;
  • import of equipment; and
  • transfer of operations.

Further, the transferee RBE must maintain an office inside the PEZA-registered IT centres or buildings; otherwise, the RBE's PEZA registration with PEZA, and consequently its registration with the BOI, will be cancelled.

The BOI and concerned IPA, in coordination with the FIRB Secretariat, will, when necessary, provide any additional procedures and mechanisms to transfer the registration of RBEs in the IT-BPM sector.

After the lapse of the periods of the remaining tax incentives, the existing registered projects of the transferee RBEs will not be entitled to additional incentives but they may be eligible to apply if the activity is listed in the Strategic Investment Priorities Plan and there is a new investment or qualified expansion.

For further information on this topic please contact Hiyasmin H Lapitan, Catherina Fernandez or Alija Rowie Pandapatan at SyCip Salazar Hernandez & Gatmaitan (SyCipLaw) by telephone (+632 8982 3500, +632 8982 3600, +632 8982 3700) or email ([email protected], [email protected] or [email protected]). The SyCipLaw website can be accessed at www.syciplaw.

Carina C Laforteza, partner and head of the tax department, assisted in the preparation of this article


(1) PEZA MC 2022-067 and memorandum.