The 2014 Province of Cebu Investment and Incentives Code

June 16, 2014 Excerpt from the Minutes of the 19th Regular Session Held by the Sangguniang Panlalawigan of Cebu, at the Session Hall, Legislative Building, Capitol Compound, Cebu City on June 16, 2014. PRESENT: Hon. Agnes A. Magpale Vice-Governor/Presiding Officer Hon. Julian B. Daan Presiding Officer Pro Tempore Hon. Arleigh Jay C. Sitoy Majority Floor Leader Hon. Jude Thaddeus Durano Sybico Assistant Majority Floor Leader Hon. Raul D. Alcoseba Sanggunian Member Hon. Peter John D. Calderon Sanggunian Member Hon. Christopher R. Baricuatro Sanggunian Member Hon. Grecilda P. Sanchez Sanggunian Member Hon. Alex S. Binghay Sanggunian Member Hon. Miguel Antonio A. Magpale Sanggunian Member Hon. Thadeo Z. Ouano Sanggunian Member Hon. Carmen Remedios Durano-Meca Sanggunian Member (PCL) Hon. Celestino A. Martinez III Sanggunian Member (FABC) ON OFFICIAL BUSINESS: Hon. Joven J. Mondigo, Jr. Sanggunian Member ON LEAVE: Hon. Sun J. Shimura Sanggunian Member RESOLUTION NO. 1105-2014 Author: Hon. Christopher R. Baricuatro WHEREAS, the Local Government Code of the Philippines empowers the local government units to grant tax exemptions, incentives or reliefs to encourage investment for economic growth and progress in the countryside; WHEREAS, there is a need to grant tax exemptions and investment incentives to qualified enterprises in the Province of Cebu to improve and develop the province's investment climate and attract both foreign and local investors in business and industry; WHEREAS, the comprehensive investment incentives program will serve to promote and attract private investments, both foreign and domestic, which could accelerate economic growth in the province; CAIHTE WHEREAS, last October 12, 2011, a Joint Memorandum Circular was issued by the Department of the Interior and Local Government (DILG) and the Department of Trade and Industry (DTI) regarding the formulation of Local Investment and Incentives Code with the aim of creating a business-friendly climate in every LGU to attract more local and foreign investors to contribute to the economic growth and development of the country; WHEREAS, it is the goal of the Province of Cebu to promote the inflow and direction of foreign and local investment capital within the province in order to promote and sustain economic and social development and generate job opportunities, increase productivity and improve the quality of lives of its constituents; NOW, THEREFORE, on motion of Member/Author, Hon. CHRISTOPHER R. BARICUATRO, duly seconded by Majority Floor Leader, Hon. ARLEIGH JAY C. SITOY, be it RESOLVED, to enact, as it is hereby ENACTED the following: CEBU PROVINCIAL ORDINANCE NO. 008-14 ENACTING AN ORDINANCE ESTABLISHING THE 2014 INVESTMENT AND INCENTIVES CODE OF THE PROVINCE OF CEBU, CREATING THE CEBU PROVINCE INVESTMENT AND INCENTIVES BOARD AND THE CEBU PROVINCE INVESTMENT AND INCENTIVES CENTER, AND FOR OTHER PURPOSES The Sangguniang Panlalawigan of Cebu, hereby ORDAINS, that: CHAPTER 1 Title, Declaration of Policy and Objectives SECTION 1. Title. This ordinance shall be known and cited as "THE 2014 PROVINCE OF CEBU INVESTMENT AND INCENTIVES CODE." SECTION 2. Declaration of Policy and Objectives. It is hereby declared as a policy of the Provincial Government of Cebu to spearhead the holistic development of its constituents through programs designed to enhance the socio-economic life of every Cebuano. It shall strive to attract, promote and encourage domestic and foreign investments in the Province of Cebu, as well as, develop a business environment that keeps and sustains said investments. Along this line, the following are the investment objectives of the Province of Cebu: a.) To encourage investment projects that utilize local labor, substantial amount of indigenous raw materials, and other natural resources of the province; b.) To spread the development from the urban areas to the undeveloped and underdeveloped rural areas of the province; DETACa c.) To promote Cebuano products in order to maximize production, attain self-sufficiency and optimal productivity; d.) To promote Cebu as a premier tourist destination while preserving the Cebuano culture and heritage. e.) To attract and encourage investments in priority areas such as agriculture/agri-business, manufacturing, tourism, information and communication technology and other economic activities that will significantly contribute to the socio-economic development of the province; f.) To promote Cebu Province as a favorable investment destination with adequate electricity and water resources, free of urban congestion and pollution and easily accessible to Asia Pacifc region and to the world; g.) To encourage local and foreign investments for globally competitive and innovative business activities that will generate employment and increase income to improve the quality of life and assure that the benefits of development accrue to the people of Cebu; h.) To promote the active participation of non-government organizations and private sector as partners and catalysts in achieving the development goals of the province; and, i.) To promote investor-friendly programs such as the streamlining of critical procedures of government frontline agencies and initiate transparency in their undertakings with their commitments. To this end, the Provincial Government shall endeavor to rationalize the systems and processes in investing in Cebu and intensify promotional and business development activities that would enhance the viability of the Province as one of the country's preferred investment destination. CHAPTER 2 Scope, Nature and Purpose SECTION 3. Scope, Nature and Purpose. This Code applies to all direct investments in the Province, including local and foreign; and resident and non-resident, but excluding portfolio investments. Moreover, this Code shall be consistent with the standards set by the existing 1987 Philippine Omnibus Investment Code and regulations of the Department of Trade and Industry (DTI) and the Department of Tourism (DOT), and shall be in conformity with the 1991 Foreign Investment Act, Retail Trade Liberalization Act of 2000, the Special Economic Zone Act of 1995 (R.A. No. 7916), the Tourism Act of 2009 (R.A. No. 9593), the Magna Carta for Micro, Small and Medium Enterprises MSMEs (R.A. No. 6977 as amended by R.A. No. 8289 and further amended by R.A. No. 9501), and other related laws. CHAPTER 3 Definition of Terms SECTION 4. Definition of Terms. When used in this Code, the following terms and phrases shall mean as follows: a) Investment means monetary value of intangible assets ( e.g. ,patents, software) and tangible assets ( e.g. ,real properties, buildings, factories, equipment, machinery) purchased acquired, constructed or donated; cash (whether from owners'/partners'/incorporators' equity, loans, donations or grants) used for or spent on legitimate business projects or activities to achieve economic gains and uplift the quality of life of the community where said projects are located; b) Incentives shall refer to fiscal and non-fiscal incentives as provided for in this Code; aDSIHc c) Board refers to the Cebu Province Investment and Incentives Board; d) Center refers to the Cebu Province Investment and Incentives Center created under this Code that serves as the Secretariat and implementing arm of the Board; e) Code refers to the 2014 Province of Cebu Investment and Incentives Code; f) Investment Zones shall refer to the provincial areas which are highly developed or which have the potential to be developed into agro-industrial, industrial, tourist/recreational, commercial, banking, investment and financial centers based on the definition of an Economic Zone under Republic Act No. 7916 known as "The Special Economic Zone Act of 1995"; g) Province refers to the Province of Cebu covering all the areas within its territorial jurisdiction now and existing or hereinafter acquired, as may be provided for by law and its chapter; h) Existing enterprises shall refer to those establishments or enterprises whose places of operation or production are physically located within the territorial jurisdiction of Cebu; i) New investors/enterprises shall refer to investors or enterprises that have not engaged or are not currently engaged in any kind or type of business in Cebu but intends to establish their place of operation or production in Cebu; j) Preferred or Priority Investment Areas refers to economic activities or sectors declared as priority investment areas by the Board in accordance with the provisions of this Code; k) Registered enterprises refers to enterprises or businesses registered in accordance with the provisions of the code; l) Micro-Small-Medium Enterprises (MSMEs) as defined in the Magna Carta for Micro, Small and Medium Enterprises (Republic Act 6977, as amended by RA 8289 and further amended by RA 9501), MSMEs shall refer to any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, must have a value falling under the following categories: Total Assets Number of Employees Micro: not more than P3,000,000 1 - 9 Small: P3,000,001-P15,000,000 10 - 99 Medium: P15,000,001-P100,000,000 100 - 199 Large: more than P100,000,000 more than 200 m) Portfolio Investments are defined as cross border transactions and positions involving debt or equity securities, other than those included in direct investment or reserve assets. CHAPTER 4 Cebu Province Investment and Incentives Board SECTION 5. Creation of the Cebu Province Investment and Incentives Board (CPIIB). There shall be created a Cebu Province Investment and Incentives Board which shall recommend policies and implement the provisions of this Code and shall hereafter, be referred to as the Board. SECTION 6. Composition of the Board. The Board shall be composed of the following: ETHIDa Chairperson: Provincial Governor Co-Chairperson: President, Cebu Chamber of Commerce and Industry Executive Vice-Chairperson: Provincial Vice Governor Regular Members: a) PEZA Administrator in relation to Section 15 of Republic Act 7916 or his representative b) Sangguniang Panlalawigan Member Chairman on Commerce and Industry c) Sangguniang Panlalawigan Member Chairman on Ways and Means d) Sangguniang Panlalawigan Member Chairman on Planning and Development e) Sangguniang Panlalawigan Member Chairman on Tourism and International Affairs f) Sangguniang Panlalawigan Member Chairman on Agriculture and Livelihood g) Sangguniang Panlalawigan Member Chairman on Environmental Conservation and Natural Resources h) President, League of Municipalities of the Philippines Cebu Chapter i) Head of Provincial Planning and Development Office j) Provincial Tourism Officer k) Provincial Director, Department of Trade and Industry Cebu Provincial Office l) Provincial Director, TESDA Cebu Provincial Office m) Provincial Director, DOLE Cebu Provincial Office n) Four (4) private sector representatives of a Duly Accredited NGO to be appointed by the Provincial Governor Advisory Members (on-call depending on the nature of the project): a) Director, Department of Agriculture b) Director, Department of Tourism c) Other relevant agencies and NGOs SECTION 7. Increase and Decrease of Membership. The membership of the Board may be increased or decreased by the Sangguniang Panlalawigan upon the recommendation of the Board for the effective implementation of the Code, except those four (4) representatives from the private sector who are appointed by the Governor. SECTION 8. Term of Office. The term of office of the Co-Chairperson and the members of the Board shall be coterminous with the term of office of local officials without prejudice to their reappointment by the succeeding Provincial Governor. SECTION 9. Board Meetings and Quorum. Within sixty (60) days upon approval of this Code, the Provincial Governor, in his/her capacity as Chairperson, shall convene the Board after appointing the members mentioned in Sec. 6 hereof. The Board shall meet at least once every quarter, on such a day and time as it may deem fit or as often as necessary if called upon by the Chairperson. The presence of majority of its members shall constitute a quorum and a majority of the quorum of a meeting shall be required to exercise its powers and perform its function. cSEDTC SECTION 10. Powers and Functions of the Board. The primary function of the Board is to establish a favorable and stable business climate that will encourage additional private sector investments and support expansion of existing business activities consistent with the development needs and environment objectives of the province. In this connection, the powers and functions of the Board shall be as follows, to wit: a) Formulates the implementing rules and regulations of the provisions of this Code and creates other technical working committees to facilitate the effective implementation of this Code; b) Approves the Cebu Provincial Investments Promotions Plan, which has to be updated every three (3) years in accordance with approved Comprehensive Development Plan (CDP),Comprehensive Land Use Plan (CLUP),updated Comprehensive Zoning Ordinance, and all other development planning documents of the Province of Cebu, and with consideration of the Investment Codes of the different cities and municipalities of the Province of Cebu, the national investment priorities of the Philippines, and global trends and developments that would have an impact on the Province; c) Approves the Cebu Provincial Investment Priorities Plan that will be drafted by the Cebu Provincial Investment and Incentives Center within the guidelines of the Cebu Provincial Investments Promotions Plan; d Supervises the operations and activities of the Cebu Province Investment and Incentives Center (CPIIC) for the effective implementation of the provisions of this Code; e) Reviews and approves the fiscal and non-fiscal incentives to be granted to the enterprises under this Code, taking into consideration the existing Investment Code of the different cities and municipalities of the Province of Cebu, subject to ratification by the Sangguniang Panlalawigan of Cebu; f) Promotes Cebu Province as a preferred investment destination through the conduct of outgoing investment missions, investment forum or conference, and hosting of incoming investment missions. In order to give more effect to the investment program under this Code, the Board is hereby empowered to conduct Investment Missions, both local and foreign, for the purpose of inviting investors as well as providing necessary information to parties willing to avail of the fiscal and/or non-fiscal incentives under this Code; Provided, however, that in the case of Foreign Investment Missions, the approval of the Sangguniang Panlalawigan must be secured. Investment Missions involving the Board of Investments, foreign embassies and consulates in the Philippines and abroad shall be headed by the Provincial Governor or in his/her absence, by any of the duly authorized member of the CPIIB; Provided, that in case of International Trade Organizations, there is a need for an endorsement or referral from the Department of Trade and Industry; g) Approves or rejects applications submitted to the Board for availment and entitlement of incentives under this Code within thirty (30) days upon receipt hereof; and issues the Certificate of Exemption to approved applications, subject to ratification by the Sangguniang Panlalawigan of Cebu; SDAaTC h) After due notice, suspend the enjoyment of incentives or benefits or cancel the registration of any registered enterprise for (1) failure to maintain the qualifications required under this Code for the registration with the Board, (2) violation of any provision of this Code and its implementing rules and regulations or the terms and conditions of registration and the availment of incentives and impose fines and penalties; i) Identify and recommend Industrial Estates and Business Parks and other investment areas in the Province of Cebu in accordance with the approved investment priorities of the cities and municipalities; j) Enter into agreement with any entity for the purpose of simplifying systems, procedures, and requirements on investments and business operation in the province of Cebu; k) Recommend to the Cebu Provincial Board any amendment on the Code; l) Review periodically the Investment Priority Areas (IPA) that are eligible for incentives; m) Recommend to the Cebu Provincial Board the establishment of Investment Zones within the province; and n) Perform such other tasks necessary and incidental to the exercise and performance of its functions. SECTION 11. Powers and Functions of the Chairperson. The Chairperson of the Board shall have the following powers and functions: a. Preside over the regular and special meetings of the Committee; b. Approve the application for registration of eligible enterprises as defined under this Code, together with the majority of the Board; c. Sign the Certificate of Registration in accordance with the rules and regulations of this Code; d. Exercise such other powers and performs such other functions as may be necessary to carry out the objectives of this Code. SECTION 12. Powers and Functions of the Vice-Chairperson. The Vice-Chairperson of the Board shall have the following powers and functions: a. Preside over the regular and special meetings of the Committee in the absence of the Chairperson; and b. Perform such other duties and functions as may be necessary in behalf of the latter. CHAPTER 5 Cebu Province Investment and Incentives Center SECTION 13. Creation of the Cebu Province Investment and Incentives Center (CPIIC). There is hereby created a Cebu Province Investment and Incentives Center, hereinafter referred to as the Center which shall be headed by the Local Economic Investment Promotions Officer with SG-24 and shall be supported by three (3) Technical Staff: one (1) Senior Industry and Investment Development Specialist with SG-18, one (1) Industry and Investment Development Specialist with SG-15 and one (1) Industry and Investment Development Researcher with SG-10 and Two (2) Clerks II with SG-4 and other necessary positions that the Board may recommend to the Sangguniang Panlalawigan. Should there be no available source to fund said creation, employees with appropriate competency and skills shall be designated to perform the duties and functions attached to the aforementioned positions so as not to hinder the implementation of the Code and not to defeat its objectives and principles. SECTION 14. Powers and Functions of the Center. The Center shall have the following duties and functions: acEHCD a) Screen and evaluate applications for investment incentives and privileges under this Code and submit such applications to the Board for approval and issuance of Certificate of Exemption, within thirty (30) days upon receipt hereof; b) Undertake pro-active and re-active market development and investment promotion activities; c) Implement the annual investment promotions and development plan as formulated and approved by the Board; d) Serve as one-stop shop for accepting, processing and evaluating all applications for registration for the availment of the local incentives and submit its recommendation to the Board within fifteen (15) working days from the receipt of application; e) Assist in (1) securing licenses and permits, (2) arranging for the availment of Local and National Government incentives, and (3) providing a listing of joint venture partners, raw materials suppliers, possible business sites and other requirements of existing and potential investors and enterprise; f) Establish network with counterpart investment promotion organizations and coordinate with support agencies of government, LGUs and the private sector in investment promotion efforts; g) Organize and train CPIPC's staff with the competence to conduct investment and environment management promotion functions; h) Serve as the Secretariat of the Board; and i) To perform such other functions as may be directed by the Board. SECTION 15. Cebu Province Investment and Incentives Center Services. Pursuant to its duties and functions, the Cebu Province Investment Promotions Center (CPIIC) shall provide the following services, among others: a) Provide information on investment opportunities, business procedures, permit requirements, government regulations and other data required by the investors; b) Assist investors in completing the requirements of government regulatory agencies; c) Make referrals to relevant government bodies, support organizations, service providers and important contacts; d) Organize appointments, itineraries and site visits including arrangements for logistical support; e) Report updates regarding major infrastructure projects in the province both existing and planned, as well as the other programs and developments that will impact the business; f) Undertake an active advocacy campaign to push infrastructure programs aimed at providing necessary facilities, as well as policy reforms to enhance Cebu investment climate. SDHTEC SECTION 16. Visitorial Power of the Board and Center. The Board or any duly authorized member thereof, is hereby empowered and authorized to conduct an ocular inspection of the premises or examination of the business activity of any enterprise, including the records and books of any enterprise, registered or applying for registration at any reasonable time of the day, during office hours, for verification or ascertaining, the enterprise's strict compliance with the provisions of the Code, or when the Board deems it necessary or incidental to the effective exercise and performance of their functions and powers. CHAPTER 6 Investment Priorities Plan SECTION 17. Criteria in Determining Investment Priority Areas. Economic activity that shall be included in the Cebu Provincial Investment Priorities Plan (CPIPP) must be environmentally, socio-economically, technically and financially sound after thorough investigation and analysis by the Board. The determination of preferred areas of investment to be listed in the CPIPP shall be based on the following: a) long-run comparative advantage b) economic soundness c) extent of contribution of the activity to a specific development goal d) market and technical considerations e) value of social objectives f) the job generation potential of the enterprise g) utilization of the available raw materials in Cebu Province h) multiplier effect i) support to environmental protection and conservation j) other indicators of comparative advantage SECTION 18. Preferred Investment Areas. Business enterprises applicants having the following type or nature of business shall be given priority under this Investment Incentive Program in pursuance to: 1) Agriculture/Agribusiness and Fishery 2) Mass Housing 3) Energy 4) Infrastructure 5) Motor Vehicles 6) Tourism 7) Mining 8) Clean Water Projects 9) Renewable Energy 10) Export Activities SECTION 19. Additional Preferred Investments. The Board may, if necessary, add new investment areas to the list. The bases for addition to the list found in this Code are (a) investment areas recommended by the LGUs not listed in Section 18; (b) any project that results in one or more of the following based on the assessment and evaluation of the Board; 1. High levels of employment; 2. High degree of added value to raw materials; 3. Linkages with local industries; and 4. Positive impact on the environment. AScHCD SECTION 20. Delisting of Preferred Investments. The Board may, by majority vote, remove any activity from the list of Preferred Investments under Section 18, or introduce additions thereto under the same section in the following cases: 1. The investment or activity does not attract investors within a reasonable length of time or may result in an unfavorable business climate; 2. The project is no longer compliant with the national laws, specifically on environment. SECTION 21. Exclusion. In no case shall incentives be granted to investments related to number games/gambling. SECTION 22. Review of Investment Incentives and Support Measures. To promote the growth of investments in the province particularly in the preferred investment areas, the Board shall review the package of incentives and support measures once every two (2) years and recommends for approval of the Sangguniang Panlalawigan the appropriate specific fiscal and non-fiscal incentives that the government shall grant to targeted investors and enterprises. Nothing in this Section shall also prevent the Board from reviewing the provisions of this Code and recommend revisions of the same to the Sangguniang Panlalawigan. The Sangguniang Panlalawigan by itself may also make such revisions. CHAPTER 7 Registration of Enterprise SECTION 23. Qualifications for New Enterprises. This shall apply to any person, partnership or corporation, association and cooperative, provided that they meet the following qualifications: a. Must be qualified to do business under existing National Laws; b. Must be duly registered with the appropriate government agencies, such as Department of Trade and Industry, the Securities and Exchange Commission, or the Cooperative Development Authority; c. Must have an initial capital investment of not less than Two Hundred Thousand Dollars ($200,000.00) for foreign investors and not less than Five Million Pesos (P5,000,000.00) for local investors. A corporation, association, partnership and other juridical persons are considered foreign when more than 40% of its equity is owned by foreign nationals; d. Foreign companies intending to apply for registration must comply with Foreign Investments Act of 1991; e. The type of business or investment must be among the list of identified Priority/Preferred/Areas of Investment as set forth by the Board; f. The prospective investor's place of operation or production shall be located within the province of Cebu; g. Project must not negatively impact the environment, whether in terms of pollution or resource use; SECTION 24. Employment Preference for Cebuano Residents. Any person, partnership, corporation, association whose application has been accepted and granted Certificate of Registration/Exemption under the pertinent provisions of this Code must employ at least seventy-five percent (75%) Filipino working force and residents of Cebu Province as certified by the employee's Barangay Captain. SECTION 25. Qualifications for Existing Enterprises. Any existing enterprise may avail of the incentives under this Code provided that the following qualifications are met: a) The business enterprise must have complied with all the requirements mandated under the existing laws, rules and regulations; b) The intended expansion or diversification of the existing enterprise must engage in an economic activity identified as an investment priority area by the Board; AcICHD c) The existing enterprise whose place of operation or production is already located within the territorial jurisdiction of the province, but which intends to undertake any of the following activities: 1) Relocate its principal but not the production site of activity, generating employment from other places of the country to Cebu; or 2) Expand its existing production capacity or construct new buildings and other civil works for the installation of new machinery and equipment or improvements thereof which will result in an increase in production capacity; d) The existing enterprise at the time of the passage of this code may avail of the incentives provided that the requirements found under this code hereof are met except that it must invest an additional investment of not less than $200,000.00 U.S. Dollars ,for foreign investors and not less than P5,000,000.00 for local investors; e) The expansion or diversification project will provide employment to bonafide residents of the province; and f) The expansion or diversification will include an environmental management plan. SECTION 26. Registration Requirements. The following are requirements for registration: (a) Single Proprietorship: 1) Four (4) copies of completed registration forms which is duly notarized; 2) A copy of the complete project study of the proposed investment/expansion showing that the project is economically, technically, financially and environmentally feasible and viable; 3) A certified true copy of the Business Name Registration issued by the DTI; 4) A copy of audited Financial Statements (if existing); 5) A complete copy of the Environmental Impact Study, if applicable; and 6) A copy of the Environmental Compliance Certificate, if applicable; 7) A copy of the Mayor's Permit. (b) For Partnership/Corporation: 1) Four (4) copies of completed registration forms which is duly notarized; TAIaHE 2) A copy of the complete project study of the proposed investment/expansion showing that the project is economically, technically, financially and environmentally feasible and viable; 3) A copy of the Articles of Partnership or Incorporation as approved by the Securities and Exchange Commission (SEC) for partnership, corporation, association and foundation; 4) A certified true copy of its Certificate of Registration issued by the Securities and Exchange Commission (SEC); 5) Resolution of the applicant's Board of Directors, in case of a Corporation authorizing the filing of application; 6) A copy of audited Financial Statements (if existing); 7) A complete copy of the Environmental Impact Study, if applicable; and 8) A copy of the Environmental Compliance Certificate, if applicable; 9) A copy of the Mayor's Permit. (c) For Cooperative: 1) Four (4) copies of completed registration forms which is duly notarized; 2) A copy of the complete project study of the proposed investment/expansion showing that the project is economically, technically, financially and environmentally feasible and viable; 3) A copy of the Articles of Cooperation as approved by the Cooperative Development Authority (CDA) for cooperatives; 4) CDA Registration; 5) A copy of audited Financial Statements (if existing); 6) A complete copy of the Environmental Impact Study, if applicable; and 7) A copy of the Environmental Compliance Certificate, if applicable. SECTION 27. Registration Procedures and Approval of Applications. The Board shall formulate appropriate rules and regulations to facilitate action on applications filed, prescribe criteria for the evaluation of applications with payment of corresponding fees/charges, and devise standard forms for use by applicants. The Chairman of the Board shall approve all applications processed by the CPIIC. SECTION 28. Certificate of Registration. Under this Code, an enterprise is considered registered upon approval of its application by the Board and ratification by the Sangguniang Panlalawigan, and as such, is legally entitled to fully avail of any or all of the incentives provided in this Code. A registered enterprise shall be issued a Certificate of Registration duly signed by the Board's Chairman in such style and form as the Board may determine. The Certificate of Registration with the signature of the Chairman of the Board or such other officer as the Board may designate for the purpose, shall state among others, the following: (1) Name of the Registered Enterprise; (2) The Investment Priority Area (IPA) in which the registered enterprise will engage in; (3) The incentives granted and period of its availment; and (4) Such other terms and conditions to be observed by virtue of its registration. cDHAES SECTION 29. Annual Registration Fees. Upon the approval/acceptance of any applicant to the Investment Program, the applicant shall be required to pay the annual Registration Fee to the Provincial Treasurer's Office at 1/10 of 1% of the amount of investment, after which the Cebu Province Investment and Incentives Board (CPIIB) Office shall issue a Certificate of Tax Incentives to the business concerned as member/applicant duly stating the incentives and privileges granted under the provisions of the Ordinance. SECTION 30. Rates for Succeeding Annual Availment Fees. For the Succeeding Annual Availment Fees, the applicable rate shall be 1/10 of 1% of the gross income (not on the amount of investment) of the registered enterprise in the effective year. SECTION 31. Remittance of Annual Availment Fees. All participating members who are granted the incentives/privileges for more than one year shall remit their annual Availment Fee in full to the Provincial Treasurer's Office on or before January 31 of each calendar year. CHAPTER 8 Rights and Privileges SECTION 32. Rights and Privileges. The Provincial Government of Cebu, through the Cebu Provincial Investment and Incentives Board (CPIIB), guarantees all registered enterprises their full entitlement of the right and privileges provided under this Code and other laws and shall: a) Provide concise and comprehensive information to prospective investors regarding the economic priorities of the province, target investment areas, and the general conditions applicable to incoming direct private investments; b) Disseminate to investors and the general public, the investment evaluation criteria and registration procedures to enhance government transparency in the process of granting incentives; c) Take into full account the need of investors for industrial peace, stability, growth and profit in their operations whenever policies are to be formulated and modified affecting investments in the province; d) Facilitate implementation of the investment project; e) Not interfere or modify arrangements with investors after the details for the implementation of an investment project has been accepted and approved, and the ownership and management structure of the enterprise has been established, unless the law provides otherwise; f) Avoid and/or prevent undue distortion of competition between or among enterprises operating within the territorial jurisdiction of the province, whether domestic or foreign, when granting any special exemptions or incentives aimed at encouraging investment in the identified target areas; g) Resolve all doubts and/or conflicts concerning the benefits, privileges, and incentives granted under this Code or in other local ordinances enacted for the purpose of encouraging investment, in favor of the investor. CHAPTER 9 Tax Exemption Privileges and Incentives SECTION. 33. Tax Incentives for Registered Enterprises. In addition to the incentives provided by law, by Republic Act 7160, or Local Government Code of 1991, and Republic Act 7916 known as "The Special Economic Zone Act of 1995", and other pertinent laws, a registered enterprise shall enjoy the following tax incentives: ASEcHI a. From the date of approval of registration by the Board up to the start of commercial operation, which shall not exceed one (1) year, an enterprise registered under this Code, shall be fully exempt from charges imposed under the existing tax laws or specifically but not limited to the following provisions of the Rules and Regulations Implementing the Local Government Code of 1991 (R.A. 7160): Art. 224. Tax on Transfer of Real Property Ownership. (a) tax on the sale, donation, barter or any other mode of transferring ownership at the rate of not more than fifty percent (50%) of one percent (1%) of the total consideration or fair market value of property, whichever is higher; Art. 225. Tax on Business of Printing and Publication. at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year. In case of a newly started business, the tax shall not exceed one-twentieth (1/20) of one percent (1%) of the capital investment; Art. 226. Franchise Tax. (a) tax on businesses enjoying a franchise at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts, which shall include both cash sales and sales on account realized during the preceding calendar year within its territorial jurisdiction, excluding the territorial limits of any city located in the province; xxx xxx xxx (d) In the case of newly started business, the tax shall not exceed one-twentieth (1/20) of one percent (1%) of the capital investment. Art. 229. Amusement Tax. (a) tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other place of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees. b. A registered enterprise qualified under this Code shall within six (6) years to ten (10) years from start of its commercial operation, be exempt from the share of the province in the impositions of Real Property Tax under the conditions and manner herein prescribed; (1) For qualified enterprises: 100% 1st and 2nd year 80% 3rd year 60% 4th year 20% 5th year 10% 6th year 0% 7th year SECTION 34. General Guidelines. The Provincial Government of Cebu, upon recommendation of the Cebu Province Investment and Incentives Board, shall grant exemptions and incentives under the terms and conditions provided in this Code, and its implementing rules issued thereafter. However, this exemption shall not apply to regulatory fees, which are levied under the police power of the Provincial Government. ITAaHc Tax exemptions shall be conferred through the issuance of a tax exemptions certificate, which shall be non-transferable. The grant of these exemptions and incentives shall be governed further by the following: a. Tax exemptions: 1. The grant to a type or kind of business shall apply to all business similarly situated subject to the pertinent provisions of this Code. 2. The exemption shall extend only to the local government unit granting such exemption or relief on shared revenues, unless the LGU concerned shall extend the same privilege to such enterprise qualified under this Code. b. Tax incentives: Tax incentives shall be granted only to new investments in the locality qualified under this Code. Existing enterprises with proposed expansion may register and qualify for exemptions provided in this Code. CHAPTER 10 Non-Fiscal Incentives & Other Privileges SECTION 35. Non-Fiscal Incentives. Registered enterprises and investors shall be granted the following non-fiscal incentives: a) Assistance in the documentation procedure of the exports; b) Consistent support of the Provincial Government for industrial peace and security; c) Assistance in securing direct source of electric power and water supply connection; d) Assistance in the negotiation of special rates for industries with a minimum load of at least 1000 kilowatts; e) Assistance in site selection and negotiation for right of way; f) Assistance in labor recruitment and arbitration; g) Other non-fiscal incentives as may be determined by the Board investment promotion. CHAPTER 11 Salaries and Wages of Employees Working within the Investment Zones SECTION 36. Salaries and Wages. Employees and workers working in the investment zone shall in no case receive salaries and wages less than the amount presently set by the National Wages and Productivity Commission for the Province of Cebu, except those registered under the Barangay Micro Business Enterprise (BMBEs). SECTION 37. Occupational Safety. All enterprises operating in the investment zone shall comply with the occupational safety and health standards set by law and by appropriate orders issued by the Secretary of Labor and Employment to eliminate or reduce occupational safety and health hazards in the workplace and update existing programs to ensure safe and healthful working conditions in the place of employment. CHTAIc CHAPTER 12 Funding SECTION 38. Appropriation. An annual budgetary appropriation of at least TWO MILLION PESOS (P2,000,000.00) shall be included in the Annual or Supplemental budget of the Province for office supplies and equipment, operational expenses and for investment missions of Cebu Province Investment and Incentives Board (CPIIB) and Cebu Province Investment and Incentives Center (CPIIC). SECTION 39. Revenues from the Operation of the Code. Income derived from the operation of this Code shall go to the provincial coffers captioned "Investment Incentives Fund". Said fund shall be used solely for the operation of the Cebu Province Investment and Incentive Code and for capital outlays and maintenance and other operating expenses of the Cebu Province Investment and Incentives Board (CPIIB) and Cebu Investment and Incentives Center (CIPC). CHAPTER 13 Prohibited Acts SECTION 40. Prohibited Acts. The following shall constitute prohibited acts and are hereby declared punishable under this Code: a) Submission of false information relative to its application for registration; b) Submission of falsified documents in relation to Section 26 of this Code. CHAPTER 14 Final Provisions SECTION 41. Disqualified Enterprise. This Investment Incentive Program shall not apply to financing or banking institutions which are governed by the Central Banking Act and under the supervision of the Central Bank of the Philippines. SECTION 42 . Non-Transferability of Incentives. The incentives and privileges granted to the registered enterprises of this Investment and Incentives Code are non-transferable, except in the event of death, permanent incapacity of a participating member, where the incentives and privileges shall be transferred to the heirs of the decedent in accordance with the law on succession, if the applicant is a natural person. Mergers, consolidations, buy-outs and the like of corporations or partnerships shall be decided on a case-to-case basis by the Board provided that when such movements are done to strengthen the corporation and increase its capital investment, then such movement may be treated as an expanding enterprise. SECTION 43. Reporting. At the end of each calendar year but not later than April 30th, all accredited enterprise to this program shall submit copies of duly audited financial statements and Income Tax Return (ITR) to the Board, the Sangguniang Panlalawigan, and the office of the Governor for evaluation and record purposes. SECTION 44. Formulation of Provincial Investment Code Implementing Rules and Regulations. After the effectivity of this Code, the Provincial Governor shall convene the Board to formulate and enact Implementing Rules and guidelines necessary for the efficient and effective implementation of this Code. SECTION 45. Penalty. Any person who violates any provision of this Ordinance and/or its implementing rules and regulations shall be penalized with a fine of not less than Two Thousand Five Hundred Pesos (P2,500.00) but not more than Five Thousand Pesos (P5,000.00) or perpetual disqualification from availing the incentives granted in this Code whether as a principal owner, director or stockholder; or both such fine and perpetual disqualification at the discretion of the court. In case of violation committed by the partnership, corporation, association, or cooperative, the Manager or President or Chief Executive Officer, as the case may be, shall suffer the penalty provided herein. Any accredited enterprise that is found to have violated any provisions of this Ordinance shall forfeit the incentives and privileges granted, and shall be required to pay all taxes and fees due from the start of its business operation, upon the recommendation of the Cebu Province Investment and Incentives Board (CPIIB). SECTION 46. Repealing Clause. All ordinances, resolutions, orders, or parts hereof, which are in conflict with the provisions of this Ordinance, to the extent of such conflict, are deemed repealed accordingly. EATCcI SECTION 47. Separability Clause. If any section, paragraph, clause or provision of this Ordinance is held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Ordinance. SECTION 48. Effectivity. This ordinance shall take effect following its publication in a newspaper of general circulation, pursuant to the Local Government Code of 1991 (R.A. 7160). ENACTED AND CARRIED UNANIMOUSLY. I hereby certify to the correctness of the afore-quoted resolution. (SGD.) ANECITA G. PASAYLO Provincial Secretary ATTESTED: (SGD.) AGNES A. MAGPALE Vice-Governor/Presiding Officer APPROVED: July 1, 2014 (SGD.) HILARIO P. DAVIDE III Provincial Governor