An Ordinance Enacting An Investment Code for the Promotion of Trade, Commerce and Industry in the City of Caloocan

April 28, 2015 CALOOCAN CITY ORDINANCE NO. 570-15 (Proposed Ordinance No. 1435) AN ORDINANCE ENACTING AN INVESTMENT CODE FOR THE PROMOTION OF TRADE, COMMERCE AND INDUSTRY IN THE CITY OF CALOOCAN, PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES Sponsored By: Hon. Ma. Milagros "Rose" S. Mercado Co-Sponsored By: Hon. Luis Chito S. Abel, Hon. Carmelo F. Africa III, Hon. Allen Alexander C. Aruelo, Hon. Dean Asistio, Hon. Tolentino J. Bagus, Hon. Aurora A. Henson, Jr., Hon. Marylou Z. Nubla, Hon. Roberto R. Samson, Hon. Anna Karina R. Teh and Hon. Dale Gonzalo R. Malapitan WHEREAS , with the globalization as the main direction of the world economy, there is a need to encourage foreign and local industries to pour in their investment in our country especially in the City of Caloocan; WHEREAS , at present, no comprehensive plan on how to attract foreign and local investors has been adopted nor enacted by the Sangguniang Panlungsod; aDSIHc WHEREAS , it becomes imperative to pass an ordinance enacting an investment code to rationalize the system and process of investment accreditation and to intensify promotional and business development activities that would magnify the viability of the City of Caloocan as a haven for productive investment for both local and foreign investors; NOW, THEREFORE, BE IT ORDAINED as it is hereby ordained by the City's Sangguniang Panlungsod in session duly assembled THAT: ARTICLE I General Provisions SECTION 1. Short Title . This Ordinance shall be known as the CALOOCAN CITY INVESTMENT CODE hereinafter referred to as the CODE ; SECTION 2. Declaration of Policy . It is hereby declared the policy of the City Government of Caloocan to catalyze the development of the City through a program designed to enhance the socio-economic life of its residents. The City Government should endeavor to rationalize the system and process of investment accreditation and to intensity the promotion of business development activities that would magnify the viability of the City as one of the Highly Urbanized Cities in the country. Thus, the government shall forge partnerships with both local and foreign establishments or even institutions that would be instrumental in strengthening the economic potential of the City, hence creating more employment opportunities and livelihood projects. SECTION 3. Definition of Terms . For purposes of this Ordinance, the following words and phrases shall mean: 1. CODE shall mean the investment Code for the promotion of trade, commerce and industry in Caloocan City; 2. COUNCIL shall refer to Caloocan City Investment and Business Promotion Council; 3. NEW ENTERPRISES shall refer to those prospective entrepreneurs who have not yet engaged in any business activity in Caloocan City and are interested to venture and establish their operation herein; 4. CAPITALIZATION shall mean the total or initial investment in a business ventures which may be in cash or property; 5. EXISTING ENTERPRISES shall refer to those enterprises already operating within the jurisdiction of the City; 6. REGISTERED ENTERPRISES shall refer to those enterprises registered in accordance with the provisions of this Ordinance; and, 7. INVESTMENT PRIORITY AREAS shall mean the economic activities that the City government has identified as hereinafter enumerated. ARTICLE II Creation, Objective, Composition, Powers and Functions of the Caloocan City Investment and Business Promotion Council SECTION 1. The Caloocan City Investment and Business Promotion Council . There shall be created a Council to be known as Caloocan City Investment and Business Promotion Council (CCIBPC) to formulate policies and implement the provisions of this Code and shall be hereinafter be referred to as the Council. SECTION 2. Objectives of the Council (CCIBPC) . 1. To encourage local and foreign investors to establish business and livelihood activities which will provide opportunities for employment; 2. To encourage Filipino and Foreign investments or joint ventures tie-up in projects to develop industrial and manufacturing industries that would spur sustainable industrialization and expand livelihood opportunities; 3. To hasten economic development by expanding markets for local industries through intensified promotional and business development activities; 4. To rationalize and simplify the system and process of investment accreditation and develop promotional strategies that would magnify the viability of the City as an investment destination; and 5. To forge partnership with domestic and foreign institutions that would facilitate and strengthen economic potential of local entrepreneurs. SECTION 3. Composition of the Council . The Council shall be composed of the following: Chairman - City Mayor Co-Chairman - Member of the Sangguniang Panlungsod 1st Vice Chairman - The President or duly authorized representative of the Caloocan City Chamber of Commerce, Inc. 2nd Vice Chairman - Representative from the Caloocan City Filipino-Chinese Chamber of Commerce and Industry Members - Chairman, SP Committee on Trade, Commerce and Industry - Chairman, SP Committee on Ways and Means - Representative from two (2) accredited and recognized business councils/associates such as tourism and real estate - Head, City Planning and Development Department Ex-Officio Members - City Treasurer - City Budget Officer - Chief, Business Permit and Licensing Office (BPLO) - Chief, LIRO - Other city officials as may be appointed by the Chairman SECTION 4. Powers and Functions of the Council . The Council is tasked mainly to come up with a favorable and stable policy on establishing business climate in the City which will encourage and support investment. It is vested with the following powers and functions: a. To screen, evaluate, accept, approve or disapprove the applications for registration for the availment of investment incentives and to issue certificate of registration; ETHIDa b. To accept all applications and be acted upon within thirty (30) days upon receipt thereof; c. To conduct hearing on issues concerning violations committed against any provisions in this Code; d. To enter into agreement with other government agencies and/or private organizations for the purpose of simplifying the system, procedure and requirement in establishing new investment in the City; e. To call meeting/s, upon the initiative of the Chairman or the majority members of the Council, to formulate rules and regulations to ensure compliance with the provisions of this Code. The Council shall meet once a month or as the need arises; f. To conduct short and medium-term investment promotional activities such as trade and investment missions, business conferences for and other related activities to attract investors and to generate employment; and g. To create an Investment and Business Promotion Office (IBPO) to serve as technical secretariat for the implementation of the provisions of this Code. SECTION 5. Powers and Functions of the Chairman . The Chairman shall have the following powers and duties: a. To confirm the mandated members of the Council from the Vice Chairman down to the members except for the ex-officio members; b. To preside over the regular and special meetings of the Council; c. To render annual reports to the Sangguniang Panlungsod and such special report as may be necessary or requested; d. To recommend to the Council such policies and support measures that may be deemed necessary to carry out the objectives of this Code; and e. Generally, to exercise such other powers and perform such other duties as may be authorized by the Council, from time to time. ARTICLE III Investment Development Plan SECTION 1. Investment Development Plan . This is an overall plan to be formulated by the Council which contains analysis, synthesis and projection of data which includes: a. The specific areas of economic activity to be declared as investment priority area; b. The investment trends in the last five (5) years and the possible trends in the next three (3) to five (5) years; c. The specific public works projects that need to be undertaken by the local or national government; d. The respective roles of privilege sectors and government in bringing additional capacities into existence; and e. Other relevant factors which the Council may consider desirable to include. SECTION 2. Coverage . Business enterprises having the following type or nature shall be given priority under this Code: cSEDTC a. Call centers and IT enterprises; b. Electronic and electrical enterprises; c. Tourism and oriented enterprises; d. Services oriented enterprises; e. Telecommunications development enterprises; f. Transport enterprises; and g. Recycling enterprises. SECTION 3. Identified Investment Priority Areas (IPAs) . a. Light Manufacturing - light metals - toy manufacturing - Ceramics - jewelry making - herbal medicines b. Infrastructure and Services - public utilities buses - public markets - infrastructure private eco-estate, concrete, road, solid waste disposal c. Tourism - five-star hotels - cultural centers and historical centers - team parks and recreational parks - eco-tourism centers - five-star transport facilities - film productions d. Consumer Productivities/Manufacturing - Gifts and hardwares, novelty gift items, Christmas and handmade dcor e. Engineering Industries - Pre-fabricated materials - Machine engineering - Lathe machines f. Electronic and Electrical Industry - electronic and electrical products g. Communications and Information Technology (IT) - Call centers, IT servers, IT enabled, IT parks h. Environmental Protection Projects - Pollution abatement or mitigation ecological facilities i. Mass Housing Projects - Fabrication of housing components SECTION 4. Determination of Additional Investment Area . The Council may include additional investment areas in the list of priority investment which upon due deliberation and approval shall then be adopted for implementation under the investment priority programs. SECTION 5. Deletion of the Priority Investment Area . The Council may remove or delete an area or activity from the list of priority/preferred area for investment which shall be based on the following: a. Sufficient investment in the area or activity has been attained; b. Continued extension of incentives or support measures for the specific investment are no longer to the interest of the City; and c. Investment area or activity cannot attract investors within a reasonable time. ARTICLE IV Registration of Enterprises SECTION 1. Qualification for New Investors . New investors must meet the following qualifications: a. That the business enterprise must have complied with all the requirements mandated under existing local and national laws, rules and policies of the government; b. That the prospective investors shall be duly registered with the appropriate government agencies; c. That the new enterprise must have a paid-up capitalization of not less than Five Million Pesos (Php5,000,000.00); and d. That the prospective investor must be engaged in activities under the Investment Priority Areas identified and declared by the Council. SECTION 2. Application Requirements . Applications shall be filed with the Council, recorded in the registration book and the date of the receipt stamped on the face thereof which shall be considered the date of the official receipt. SECTION 3. Venue for the Filing of Applications . All applications shall be filed directly at the Caloocan City Investment and Business Promotion Office. SECTION 4. Processing Time . Applications shall only be entered officially accepted upon submission of complete requirements to the Council. The Council, within one (1) day from acceptance thereof, shall act upon the application for incentive provided that all questions and inquiries relative thereto have been sufficiently satisfied. a. Four (4) copies of complete application form to be provided by the Council; b. Certified true copy of Articles of Incorporation and By-Laws as approved by the Securities and Exchange Commission (SEC) or the Department of Trade and Industry (DTI) as the case may be; c. In case of corporation, Board Resolution authorizing the applicant for the filing of application for registration; d. Latest audited Financial Statement; e. Project Feasibility Study; f. Other requirements as may be deemed necessary. Upon approval, the applicant is required to pay to the City Treasurer's Office, a registration fee of 1/10 of 1% based on the approved amount of investment. ARTICLE V Investment and Business Promotion Office SECTION 1. Powers and Functions of the Investment and Business Promotion Office (IBPO) . This Office shall serve as the Secretariat of the Council and shall have the following powers and functions: a. Accept, process and evaluate all applicants for registration for the availment of local tax exemption, relief, incentive and submit its recommendation for action by the Council within ten (10) working days. b. Provide the necessary support services to the investors such as: b.1. Facilities of registration, documents, permits and licenses; b.2. Provide business information to the investors; c. Establish and maintain networking relation with other offices and agencies whenever necessary; SDAaTC d. Recommend to the IBPC any amendment to existing ordinance, rules and regulations relative to local investment; e. Prepare the minutes and agenda of the meeting of the Council and submit for consideration and approval of the Council such policies and measures deemed necessary to carry out the provisions of this Code; f. Establish multi-sectoral linkage/network system. ARTICLE VI Tax Exemption, Privileges and Incentives SECTION 1. Tax exemption shall be conferred through the issuance of a tax exemption certificate which shall be non-transferable. The grant of these exemption and incentives shall be governed by the following factors: a. The tax exemption, privilege or incentive granted shall take effect only during the next calendar year for a period not exceeding twelve (12) months after the evaluation of the IBPO and approval of CCIBPC. b. Incentives granted to existing enterprises shall apply only to additional capitalization and shall not apply to previous investment from legal grantee to another and shall be enjoyed on one occasion only. SECTION 2. All registered enterprises with capitalization of not less than Five (5) Million Pesos and an existing enterprise with an additional capitalization of Three (3) Million Pesos or above shall be granted the following incentives: a. Exemption from payment of business tax for a period of one year and payment thereof equivalent to one-half (1/2) of the applicable business taxes for a period of five (5) years; b. Exemption from the payment of real property tax for a period of one (1) year and payment thereof equivalent to one-half (1/2) of real property taxes for a period of five (5) years; c. Exemption for payment of franchise tax for a period of one (1) year and payment thereof equivalent to one-half of the applicable rate for a period of five (5) years; and d. Exemption from payment of transfer tax of real property ownership is a one-time payment. ARTICLE VII Initial Appropriation SECTION 1. There shall allocated an initial appropriation of Five Million (P5,000,000.00) Investment and Business Promotion Fund. Thereafter, the Council shall present annual budget for the continued operation and maintenance of its office including the preparation of investment missions both local and foreign. ARTICLE VIII Final Provisions SECTION 1. Restriction and Expiration . Upon approval of the application for incentives granted to the applicant, the project either new or expansion, must be implemented within one (1) year, otherwise the incentives and other benefits will be nullified. SECTION 2. Penal Clause (1) Violation of any provision of this Code shall forfeit the incentives and privileges granted the registered enterprise and shall be required to pay all taxes due from the start of its business operation upon recommendation of the Investment and Business Promotion Office (2) Violation of the provision of this Code shall be penalized with a fine of not less than One Thousand (P1,000.00) Pesos but not more than Five Thousand (P5,000.00) or an imprisonment of not less than one (1) month but not more than one (1) year or both such fine and imprisonment at the discretion of the Court. In case the violation is committed by a corporation, partnership, association, the President or Chief Executive Officer, Manager, as the case may be, shall suffer the penalty provided herein. SECTION 3. Implementing Rules and Regulations . The Business Permits and Licensing Office (BPLO) is hereby tasked to promulgate the necessary Implementing Rules and Regulations (IRR) for the effective Implementation of this Ordinance. SECTION 4. Separability Clause . If for any reason, any provision of this Code is declared to be unconstitutional or invalid by the Court, other provision/s hereof not affected thereby, shall continue to be in full force and effect. SECTION 5. Repealing Clause . All ordinances, resolutions, rules and regulations which are inconsistent to or in conflict with the provision/s of this Code, are hereby repealed, amended or modified accordingly. SECTION 6. Effectivity Clause . This Code shall take effect following its publication once in a newspaper of local circulation or at the end of the posting period for three (3) consecutive weeks at prominent places in the City Hall, whichever occurs later. acEHCD ENACTED BY THE SANGGUNIANG PANLUNGSOD, CITY OF CALOOCAN AT ITS REGULAR SESSION HELD ON THE 28th DAY OF APRIL 2015. HON. LUIS CHITO S. ABEL City Councilor HON. ALLEN ALEXANDER C. ARUELO City Councilor HON. CARMELO F. AFRICA III City Councilor HON. DEAN ASISTIO City Councilor HON. TOLENTINO J. BAGUS City Councilor HON. AURORA A. HENSON, JR. City Councilor HON. MA. MILAGROS "ROSE" S. MERCADO City Councilor HON. MARYLOU Z. NUBLA City Councilor HON. ROBERTO R. SAMSON City Councilor HON. ANNA KARINA TEH City Councilor HON. DALE GONZALO R. MALAPITAN City Councilor APPROVED BY HIS HONOR, THE CITY MAYOR ON ____________, 2015. APPROVED BY: HON. OSCAR G. MALAPITAN City Mayor CERTIFIED BY: HON. MACARIO E. ASISTIO III Vice Mayor & Presiding Officer ATTESTED BY: LILIBETH M. LUAKIAN Secretary to the Mayor LORENZO O. SUNGA, JR. Secretary Sangguniang Panlungsod