An Ordinance Enacting the Makati City Investment and Incentives Code

December 11, 2014 MAKATI CITY ORDINANCE NO. 076-14 PRESENT: Councilor ARNOLD C. MAGPANTAY Temporary Presiding Officer Councilor MARIE ALETHEA SJ. CASAL-UY Councilor MARIA THERESA N. DE LARA Councilor MANUEL MONSOUR T. DEL ROSARIO III Councilor VIRGILIO V. HILARIO Councilor HENRY A. JACOME Councilor LEONARDO M. MAGPANTAY Councilor TOSCA CAMILLE T. PUNO-RAMOS Councilor VINCENT T. SESE Councilor MARY RUTH C. TOLENTINO Councilor MA. CONCEPCION M. YABUT Councilor NEMESIO S. YABUT, JR. ABSENT: Vice Mayor ROMULO V. PEA, JR. Councilor ISRAEL S. CRUZADO Official Business Councilor FERDINAND T. EUSEBIO Councilor ROMEO C. MEDINA Councilor NELSON S. PASIA Official Business LnB President MA. ARLENE M. ORTEGA By unanimous vote of the Sangguniang Panlungsod members who are present, the following City Ordinance was enacted on third and final reading: Authors: Councilors A.C. Magpantay, N.S. Yabut, Jr.,N.S. Pasia, V.T. Sese, F.T. Eusebio, M.A.S.J. Casal-Uy, I.S. Cruzado, M.M.T. del Rosario III, V.V. Hilario, H.A. Jacome, L.M. Magpantay, R.C. Medina, T.C.T. Puno-Ramos, M.R.C. Tolentino, M.C.M. Yabut and M.A.M. Ortega AN ORDINANCE ENACTING THE MAKATI CITY INVESTMENT AND INCENTIVES CODE WHEREAS, in line with the thrusts of maintaining its strong foothold and scaling new heights as the premier financial hub and investment destination of the Country, it is imperative for the City Government of Makati to come up with policies on investment promotion on preferred industries/enterprises together with set of incentives and programs designed to entice new players to invest in and for the existing investors to stay put and increase their stakes in the city's economy; WHEREAS, new capital inflows and expansions in the preferred areas of investment will drive the redevelopment of some areas to more conducive and sophisticated places to live, work and play thereby consequently raising the bar of human resource development, economic development and quality of life indexes towards the realization of the vision of a smarter city; WHEREAS, the presence of an Investment and Incentives Code is one of the requirements/indicators embodied under the Local Governance Performance Management System (LGPMS). The said system aims to determine/assess the capabilities of LGUs in the delivery of public service. NOW, THEREFORE, BE IT ENACTED AS IT IS HEREBY ENACTED BY THE SANGGUNIANG PANLUNGSOD OF MAKATI, METRO MANILA, BY VIRTUE OF THE POWERS VESTED IN IT BY LAW, IN A SPECIAL SESSION ASSEMBLED: CHAPTER I Title and Policy Statement SECTION 1. Title. This ordinance shall be known as the "Makati City Investment and Incentives Code". SECTION 2. Policy Statement. It is hereby declared the policy of the City Government of Makati to align the inflow and direction of foreign and local investment capital within the City towards sustainable economic and social development by creating a business-friendly environment that provides incentives, both fiscal and non-fiscal, for investments that generate employment opportunities, increase productivity, and help improve the quality of life of Makati constituents and promote excellence in the delivery of basic services. CAIHTE SECTION 3. Purpose, Intent and Objective. It is the purpose, intent and objective of this Code: 1. To synchronize the City's Investment Code with the national government's initiatives/laws/regulations on investment related activities. 2. To provide fiscal and non-fiscal incentives to registered and qualified investors based on excellence and/or accomplishment; 3. To actively encourage, promote, induce and accelerate a sound and balanced investment climate; and 4. To rationalize the system and processes of investment accreditation and intensify promotional and business development. CHAPTER II Definition of Terms SECTION 1. Definition of Terms. For purposes of this Code, the following definitions shall apply: (a) City shall refer to the City Government of Makati or any of its departments and offices. (b) Code shall refer to the Makati City Investment and Incentives Code. (c) Board shall refer to the Makati Investment Board. (d) MIPFA shall refer to the Makati Investment Promotion & Facilitation Agency. (e) Expansion shall refer to infusion of new capital for higher/greater activity in the same line of business by an existing enterprise. (f) Diversification shall refer to branching/venturing out to another field of business activity by an existing enterprise. (g) Priority Investment Activities shall refer to enterprises where investments and growth are most desired. (h) Qualified Investments shall be defined as enterprises which have complied with and passed all the requirements set forth by laws. (i) Investment Development Plan (IDP) shall mean the over-all plan prepared by the Board which includes and contains: (1) Criteria or requirements in addition to those set forth in this Code to qualify for registration of the enterprise entitled to incentives; and (2) Such other information, analyses, data, guidelines or criteria as the Board may deem appropriate. (j) Incentive shall refer to any fiscal and non-fiscal privileges/concessions/assistance, in any form, which local enterprises may enjoy or avail of, including those granted in recognition of active support and participation relative to the implementation of the city's programs and projects e.g. ,Clean and Green, Gender and Development, etc. (k) New Enterprise shall refer to those which shall register to engage in a particular line of business for the very first time in the city. Relatively and interchangeably, it shall also refer to untapped pioneering industries. (l) Existing Enterprise shall refer to those which have been registered and engaged in a particular line of business in the city. Relatively and interchangeably, it shall refer to already thriving industries in various stages of development. DETACa CHAPTER III Investment and Incentives Board SECTION 1. Investment and Incentives Board. There is hereby created the Makati Investment Board, hereinafter referred to as the Board, which shall administer and implement this Code. SECTION 2. Composition of the Board. The Board shall be composed of the chairman, vice-chairman, and nine (9) members all appointed by the city mayor provided that five (5) members of the board shall come from the members of the Local Finance Committee and the other four (4) members from the private sector. The Executive Director of the MIPFA shall serve as ex-officio member of the board. SECTION 3. Powers and Functions. The primary function of the Board shall be to establish a consistent and favorable economic policy which will encourage and support private sector investments in the city. Pursuant thereto, the Board is hereby vested with the following powers and functions: 1. Prepare annually the Investment Development Plan (IDP) for the City as defined in Chapter II, Section 1 (i),regardless of which investors may engage into provided that investments shall generate employment opportunities, increase productivity, and help improve the quality of life of Makati constituents, and promote excellence in the delivery of basic services; 2. Promulgation of the governing IRR by the Board should be subject to the approval of the Mayor; 3. To evaluate and approve the applications of business enterprises availing the incentives set forth in this Code; 4. Recommend policies and promotional programs to strengthen and enhance Makati City's attractiveness to investors; 5. Coordinate with related offices, departments, organizations, and/or other appropriate agencies from the national level or city government; 6. Ensure compliance of registered enterprises with the provisions of this code as well as any other conditions that may be agreed upon between the city government and the registered business enterprise for the continued enjoyment of the incentives granted hereunder; 7. In coordination with the office of the City Treasurer or with appropriate agencies of the national or city government, periodically check and verify, by inspection of the books and premises of the registered enterprise or by requiring periodic reports, compliance with this Code, the implementing rules and regulations and other terms and conditions of registration; 8. After due notice, cancel the registration or suspend the enjoyment of incentives of any registered enterprise and/or require refund of the incentives enjoyed by such enterprise including interests and monetary penalties, for failure to maintain the qualification required by this code as well as for violation of any provision of this code, of its implementing rules and regulations, or the terms and conditions of registration. 9. Review and adopt the investment promotions programs and projects submitted by the MIPFA; 10. Within two months from the close of the calendar year, submit an annual report to the Sangguniang Panlungsod covering its activities in the administration of this Code including recommendations on investment policies; aDSIHc 11. Generally, exercise all the powers ascribed to it by this Code and those necessary or incidental to attain the purpose of this Code. SECTION 4. Term of Office. The term of office of the members of the Board shall be co-terminus with the term of office of local officials without prejudice to their reappointment by the succeeding City Mayor. SECTION 5. Duties and Responsibilities of the Chairman. The Chairman shall have the following duties and responsibilities: (a) To preside over the meetings of the Board. (b) To ensure that applications for registration are acted upon expeditiously; (c) In consultation with the private sector, to appoint the staff of the MIPFA and recommend at least three (3) nominees for appointment as Executive Director of MIPFA to the city mayor; (d) To render annual reports to the Sangguniang Panlungsod; (e) Generally, to exercise such powers and perform such other duties to carry out the objectives of this Code. SECTION 6. Duties and Responsibilities of the Vice-Chairman. The Vice-Chairman shall have the following duties and responsibilities: (a) To preside over the meetings of the Board in the absence of the Chairman. (b) To perform the other duties of the Chairman in the absence of the latter. SECTION 7. Board Meetings and Quorum. The Board shall meet every month, and a special meeting may be called upon the request of the Chairman or by the majority of the members of the Board. CHAPTER IV Investment Development Plan SECTION 1. Investment Development Plan. The Board, after consultation with the appropriate government agencies and the private sector, shall submit to the Office of the City Mayor an Investment Development Plan (IDP) after every three (3) years (not later than the end of the third year).Provided, however, that the deadline for submission, is extended by the City Mayor. SECTION 2. Approval of the Investment Development Plan. The plan prepared by the Board shall be reviewed by the Local Finance Committee members, together with the Chairman and members of the concerned committees of the Sangguniang Panlungsod. The reviewed plan shall be forwarded to the Sangguniang Panlungsod for enactment into an Ordinance upon the approval of the City Mayor. SECTION 3. Amendments. The Board may, after due notice and proper public consultation, recommend to the City Mayor additional amendments to the Code. In no case, however, shall any amendment of the plan impair whatever rights may have already been legally vested in qualified enterprises which shall continue to enjoy such rights to the full extent allowed under this Code. SECTION 4. Publication. Upon approval of the plan, in whole or in part, or upon approval of an amendment thereof, the plan or the amendment, shall be published in at least one (1) newspaper of general circulation until publication of an amendment or deletion thereof, or until the Board approves registration of qualified enterprises. SECTION 5. Priority Investment Activities. The determination of the particular priority investment activities for each investment priority areas under the investment development plan shall be anchored in the City's development goals as stipulated in the City's CLUP 2013-2023. ETHIDa CHAPTER V Incentives to Registered Enterprises SECTION 1. Fiscal Incentives. All enterprises registered under this Code, in addition to the incentives as provided for by the Omnibus Investments Code of 1987 (Executive Order 226), the Foreign Investments Act of 1991 (Republic Act 7042), and other laws granting fiscal incentives including and not limited to the Local Government Code of 1991 (RA 7160), shall be entitled to enjoy fiscal incentives as may be recommended by the City Investment and Incentives Board for enactment by the Sangguniang Panlungsod. Pending the enactment by the Sangguniang Panlungsod of the recommended Schedule of Fiscal Incentives, the Board may recommend fiscal incentives to investors subject to conditions of the Implementing Rules and Regulations that may be later on promulgated with the approval of the Sangguniang Panlungsod. SECTION 2. Non-Fiscal Incentives. Aside from the fiscal incentives stated in the foregoing section, the following non-fiscal measures are herein provided purposely to assist investors in successfully accomplishing their activities prior to, during, and after the registration of their businesses: 1. The establishment of the MIPFA that shall be equipped with business support facilities and equipment, which shall be accessible and made available to all enterprises registered with this Code; 2. Provision of the following services through the MIPFA: a. Assistance in securing local permits and licenses; b. Assistance in identifying business location and prospective sites; c. Access to business information; d. Access to the local labor pool; e. Provide academic programs in the city university and other learning institutions as may be required by registered enterprise for their human resource requirements; f. Business or joint venture matching; g. Facilitate access to financial and technical assistance programs of the City Government; h. Establishment and operations of modern health services facilities; i. Facilitate service connections with local utilities; j. Facilitate the provision of security measures and facilities such as hotlines with the local fire and police departments; and k. Other services that may be authorized by the Board. 3. Non-fiscal measures embodied in the City's CLUP/Zoning Ordinance 2013-2023, such as but not limited to granting of bonus incentives, transferable development rights, etc. 4. Such other non-fiscal measures that may from time to time be promulgated by the Board, subject to the approval of the Sangguniang Panlungsod. cSEDTC CHAPTER VI Support Programs and Commitments by the City SECTION 1. The City Government shall ensure a favorable and enhanced business climate through various support programs and projects, such as: a. Public Order, Safety and Security. The City Government shall maintain a peaceful and orderly environment with its strong commitment to provide training and modern equipment, among others, to the local enforcement agencies for higher morale and greater efficiency in the performance of their duties, complemented by a highly active and participative City Peace and Order Council (POC).Disaster prevention and response is also of high priority to promote constant alertness and readiness to prevent and respond to disasters, both natural and man made, in terms of disaster response protocols, trained rescue personnel and adequate equipment; b. Public Private Partnership (PPP). The City Government adopts and pursues PPP approach towards development. It created PPP regulatory authority and provided incentives under Makati City Ordinance No. 2014-051; c. Information and Communications Technology (ICT) Infrastructure. The City Government shall continuously develop and enhance existing ICT infrastructure and facilities to achieve greater and real time connectivity among people, private and government offices. d. Human Resource Development and Placement. The City Government, through the University of Makati and industry partners, had developed and adopted a dualized and ladderized school curriculum designed to teach trade skills that are highly sought in the local industries. The Public Employment Services Office (PESO) shall maintain linkages with local employers to assist them in their manpower requirements. e. Industrial and Labor Relations. The City Government shall promote industrial peace anchored on the principles of mutual respect and benefit between employees and employers. f. Green Policy. The City Government adheres to the policy of promoting the use of green technologies towards environmentally friendly and sustainable developments. An ordinance on green building standards and incentives shall be enacted by the City Government to complement the existing environmentally related legislations already in place. g. Urban Development. The City Government shall adopt a comprehensive urban development plan in sync with the requirements of the identified preferred areas of investment. A disaster resilient urban development plan shall be given strong emphasis in the crafting thereof. h. Business Resource Center. The City Government shall establish a unit dedicated to catering and assisting applicants for registration of new businesses following the one stop shop template. i. Transferable Development Right (TDR)/Carbon Credit. The economic schemes of Transferable Development Right and Carbon Credit in relation to urban development policy and City Green standards shall be considered as additional instruments or forms of incentive. The awards, citations or recognition for good corporate practices and advocacies by any enterprise in relation to the aforementioned areas of commitments shall likewise be bases for the grant of incentives under this code. SECTION 2. Rights and Privileges. The City Government respects and guarantees existing legal rights and privileges of registered enterprises under a contract, existing laws and the constitution. SDAaTC CHAPTER VII Qualification Requirements and Registration of Enterprises SECTION 1. Qualifications for New Enterprises. All new enterprises intending to avail themselves of the incentives as provided in this Code must be able to satisfy all of the following general requirements: 1. The business enterprise must have complied with all the requirements mandated under existing local and national laws and the Philippine Constitution; 2. The enterprise must show proof of financial capacity and capability to undertake the establishment and operation of the intended project; 3. The prospective investment must engage in any of the areas or activities cited in the IDP as may hereafter be declared by the Board and hereafter approved by the city mayor; 4. The initial or additional capital infusion thresholds vis--vis the corresponding fiscal or non-fiscal incentives shall be recommended by the Board for enactment into an Ordinance by the Sangguniang Panlungsod; 5. The new enterprise shall provide to bonafide residents of the city full-time or regular job of not less than 20% of the job opportunities it generates; otherwise, it shall provide not less than 30% of the contractual job opportunities it generates. Provided, that the Board may provide for additional specific requirements for each preferred investment area and/or activity in the Investment Development Plan. SECTION 2. Qualifications for Existing Enterprises. Any existing enterprise may avail itself 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 existing local and national laws and the Philippine Constitution; b. The intended expansion or diversification of the enterprise must engage in any of the specifically identified preferred or priority investment areas as may hereafter be declared by the Board; c. The enterprise must show proof of financial capacity and capability to undertake the expansion or diversification project and its operation; d. The existing enterprise whose place of operation or production is already located within the territorial confines of the city, but which intends to undertake any of the following: i. Relocate its principal office from other places in the country to Makati City; ii. Or 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; e. The expansion or diversification shall have a project cost which may later on be recommended by the Board and enacted by the Sangguniang Panlungsod with reference to Chapter VII of this Code, provided, that the amount of capitalization shall be based on the total project cost of such expansion or diversification as stated in the investor's project study submitted to and approved by the Board; f. The expansion or diversification project will provide employment to bonafide residents of the City in accordance with the numbers and scale as provided for under Section 5, Chapter VII of this Code. SECTION 3. Registration Requirements. Application for registration by any and all interested enterprises, whether new or existing, shall be secured and filed with the Board through the MIPFA. All applications shall be recorded in a registration book and the date appearing therein and stamped on the application shall be considered the date of official receipt thereof. A non-refundable filing fee of One Thousand Pesos (Php1,000.00) shall be paid by the applicant together with the submission of the following documents for registration: acEHCD 1. Three (3) copies of duly completed application form. The form shall be provided to the applicant by the Board through the Center in accordance with the provisions of this Code; 2. A complete copy of the project feasibility study of the proposed investment; 3. Environmental clearance from the Department of Environment and Natural Resources for projects requiring such clearance and such other permits and clearances required and issued by other agencies of the national government; 4. A copy of the Articles of Incorporation, By-Laws and Certificate of Registration, in the case of corporate or partnership entities, as approved or issued by the Securities and Exchange Commission; Articles of Cooperation and By-Laws in the case of a cooperative, as approved by the Cooperative Development Authority; or Business Name Registration, in the case of a sole proprietorship. 5. A resolution authorizing the filing of application by the Board of Directors of the applicant firm, in the case of a corporation and cooperative; and 6. For existing enterprises, a copy of the latest audited Financial Statement of the applicant firms. SECTION 4. Registration Procedures and Approval of Applications. The Board shall formulate appropriate rules and regulations to facilitate final action on applications filed with it to prescribe criteria for the evaluation of applications, and to devise standard forms for use by the applicants. SECTION 5. Certificate of Registration. Under this Code, an approved applicant enterprise shall be considered a registered enterprise, and as such, legally entitles it to fully avail itself of any and/or all of the incentives that this Code so provides for. A registered enterprise shall be issued a Certificate of Registration duly signed by the Board's Chairman and/or such other officially designated officer of the Board in such style and form as the Board may determine. CHAPTER VIII The Makati Investment Promotion & Facilitation Agency SECTION 1. The Makati Investment Promotion & Facilitation Agency. There is hereby created the Makati Investment Promotion & Facilitation Agency (MIPFA) purposely to assist the Board in all of its activities pertinent to and concerning investment policies, investment promotion, and investment development and assistance. As such, the Board shall supervise the same in its operations especially in the implementation of the provisions of the Code. SECTION 2. Timeframe for the Establishment and Existence of MIPFA. Once constituted, an Executive Director shall head the MIPFA who shall be appointed by the City Mayor upon the recommendation by the Board and shall have a rank, qualifications and compensation equivalent to City Assistant Department Head, subject to Civil Service Rules and Regulations. SECTION 3. Duties and Responsibilities of the Executive Director. The Executive Director shall have the following duties and responsibilities: (a) To execute, direct and implement the policies, regulations and resolutions issued by the Board; (b) To manage and coordinate the implementation of the Investment Promotions Program; SDHTEC (c) To manage the budgetary appropriations and financial disbursements of the MIPFA; (d) To supervise the MIPFA and to maintain official records, files and proceedings of both the MIPFA and the Board. SECTION 4. Staff Complement. The staff complement of the MIPFA will be the city government's Investment and Trade Promotion Division of the International Relations Department. SECTION 5. Duties and Responsibilities. MIPFA shall have the following duties and responsibilities: 1. To serve as the Secretariat of the Board; 2. To pre-evaluate applications of business enterprises availing the incentives set forth in this Code, subject to the satisfaction of qualifications and completion of registration requirements, and recommend the same to the Board for its appropriate action; 3. To conduct appropriate and relevant studies, gather and analyze pertinent facts and figures, and inform the Board on international, national and local issues affecting the dynamics of investments; 4. To implement the annual investment promotions and development plan that shall be formulated and approved by the Board; 5. To spearhead the production, publication and dissemination of investment promotions collaterals and whenever needed, conduct briefings to investors and other interested parties; 6. To establish and maintain an appropriate databank and a library of literature regarding investments and other economics related materials; 7. To assist investors in the satisfaction and completion of all requirements demanded of them by law and, therefore, facilitate the actualization of investors intended investment projects in the City; 8. To assist the Board in receiving, processing, and approving investment registration applications and in the administration of incentives as provided for under this Code; 9. To represent the City Government in trade and investments meetings, conferences, fora, conventions and other similar gatherings in both domestic and foreign venues whenever so directed by the Board; 10. To perform such other functions as may be directed by the Board. SECTION 6. Tenure. The tenure of office of the Executive Director shall be three (3) years, co-terminus with the term of the Local Chief Executive (LCE),unless appointment is earlier withdrawn by the LCE. SECTION 7. Honoraria. The Members of the Board shall receive monthly honorarium in accordance with existing laws, rules and regulations. CHAPTER IX Final Provisions SECTION 1. Appropriations. Based upon the proposed budget presented by the Board, the City Government shall annually appropriate for the funding requirements deemed necessary for the continued and effective implementation of the provisions of this Code, subject to the usual government accounting and auditing procedures, rules and regulations. SECTION 2. Penal Provisions. Any violation of the provisions of this Code and other existing local and national laws, ordinances, rules and regulations committed by any registered enterprise, shall be ground for the cancellation or revocation of the registration of the enterprise and the withdrawal of all the incentives granted under this Code by the City Government. Further, any violation of the provisions of this Code committed by any official of the City Government shall be dealt with according to the gravity of the violation or offense committed and in accordance with the provisions of the Revised Penal Code of the Philippines and such other applicable laws of the land. SECTION 3. Separability Clause. It is hereby declared that the provisions of this Code are separable, and in the event that one or more of the provisions are judicially declared illegal or unconstitutional by a competent Court, the validity of the other provisions shall not be affected, and shall continue to be in force and effect. AScHCD SECTION 4. Repealing Clause. All ordinances, executive orders, rules, and regulations inconsistent or in conflict with the provisions of this Code are hereby repealed, amended, or modified accordingly. SECTION 5. Effectivity. This Ordinance shall take effect after fifteen (15) days following its publication in a newspaper of general circulation. ENACTED BY THE SANGGUNIANG PANLUNGSOD OF MAKATI, METRO MANILA, in its special session held on December 11, 2014. Certified true and correct by: ATTY. RODEL R. NAYVE Sanggunian Secretary Attested by: COUNCILOR ARNOLD C. MAGPANTAY Temporary Presiding Officer Approved by: JEJOMAR ERWIN S. BINAY, JR. City Mayor