Surigao City Ordinance No. 246-06

June 8, 2006 SURIGAO CITY ORDINANCE NO. 246-06 AN ORDINANCE GRANTING TAX AND OTHER INCENTIVES TO INVESTORS: LOCAL, FOREIGN, WHO CHOOSES ANY AREA WITHIN THE TERRITORIAL JURISDICTION OF SURIGAO CITY AS THEIR INVESTMENT SITE AND FOR OTHER PURPOSES CHAPTER I Title and Declaration of Policy SECTION 1. This Ordinance shall be known as the SURIGAO CITY INVESTMENT INCENTIVE CODE OF 2006. SECTION 2. To accelerate the development of Surigao City, it is hereby declared as a policy of the City to encourage, attract, promote and welcome investment activities which will significantly contribute to the City's socio-economic development and industrialization, in line with what is allowed in the constitution and other relevant laws. Investments shall be encouraged in enterprises that significantly promote livelihood and employment opportunities for Surigaonons in the following industries: 1) Agriculture 2) Manufacturing/Processing Industries 3) Tourism 4) Renewable Energy Development 5) Industrial Tree Plantation CHAPTER II Definition of Terms SECTION 3. When used in this Ordinance, the following definition of terms shall apply. EHSITc 1. City comprises the territorial jurisdiction of the City of Surigao. 2. Investments projects based within the City of Surigao, which could generate employment, and contribute to the generation of government revenues. 3. Juridical Person refers to any person or entity, who by operation of law has acquired status and rights to operate a legitimate business; can sue and can be sued. 4. Registered Enterprises are establishments which are duly registered with the appropriate government agencies and have acquired rights and privileges to operate business within the jurisdiction of the City of Surigao. 5. Pioneering Enterprises refers to a project or business activity within the City of Surigao whose nature or type of operation is not present or similar to any existing enterprises during the enactment of this Code or during the application for registration. 6. Duly-Audited Financial Statement refers to financial statements of business establishments or enterprises prepared in accordance with standard accounting procedures and checked by an external or third party auditor. 7. Board refers to the Surigao City Investment Board. 8. Code refers to this Investment Incentives Ordinance. 9. Renewable Energy Development energization or electrification projects that uses such natural sources like hydro-power, solar, wind. CHAPTER III Registration of Enterprises SECTION 4. Qualification of a Registered Enterprise. To be entitled for registration under this Code, an applicant must satisfy the following: 4.A. Applicants shall either be natural or juridical person or persons qualified under Philippine laws to do business in the country. Sole proprietorships, partnerships, corporations, cooperatives or people's organizations may avail of such incentives under this Code. 4-B. Applicants shall be duly registered or accredited either with the Securities and Exchange Commission (SEC), the Department of Trade and Industry (DTI), Cooperative Development Authority (CDA), or with any other appropriate government agencies. DCcTHa 4-C. All applicants under this Code must comply with the requirements of all existing applicable laws. 4-D. Must have an initial investment of not less than Fifteen Million Pesos (P15,000,000.00) in case of Filipino investors and Three Hundred Thousand Dollars (US$300,000.00) for foreign investors. 4-E. Must deposit an initial amount as investment commitment fund of no less than Three Million Pesos (P3,000,000.00) for Filipino investors, and One Hundred Thousand Dollars (US$100,000.00) for foreign investors, to any local banks of the City of Surigao, and show a certificate of Bank Deposit duly signed by the Bank Manager. 4-F. Any business enterprise stated in Sec. 4-A, that is granted Certificate of Registration and exemption under the pertinent provisions of the Code must employ at least 70% of its workforce coming from the City of Surigao and Province of Surigao del Norte unless otherwise the skills required are not available. CHAPTER IV Surigao City Investment Board SECTION 5. For the purpose of overseeing and directing the implementation of this Code, the Surigao City Investment Board is hereby created with the following composition, powers and functions: 5-A. Composition . The Surigao City Investment Board shall be composed of the following. 1) Chairperson The City Mayor 2) 1st Vice Chairperson SP Chairperson, Committee on Trade & Industry 3) 2nd Vice Chairperson President or the duly elected representative of the Surigao City Chamber of commerce and Industry Members 4) President or duly elected representative of the Surigao Filipino Chinese Chamber of Commerce and Industry 5) Provincial Director, Department of Trade and Industry of Surigao del Norte 6) President or duly elected representative of Surigao Bankers Association 7) Lawyer-member of the Sangguniang Panlungsod duly elected by the majority of the SP members 8) President or duly elected representative of the Small and Medium Enterprise Development (SMED) Council of Surigao del Norte acHCSD 9) Representative of duly accredited Non-Government Organization to be elected from among the accredited NGO's of Surigao City 10) The City treasurer 11) Chairman Finance Committee 5-B. Powers and Functions. The Surigao City Investment Board shall have the following powers and functions: 1) To screen, evaluate, accept, approve or reject applicants who want to avail of the benefits provided for in this Code, and to issue certificates of registration exemptions. The approval or rejection of applicants shall require the affirmative vote of those present were there is a quorum. 2) The Chairperson or any six (6) of its Members of the Board can call for a meeting to formulate rules and guidelines to ensure compliance with the provisions of this Code. The Board shall meet as often as necessary but shall not be less than once a month. 3) To act on all applications within a period of 30 days. 4) To conduct trade and investment missions both local and foreign, to include image-building and marketing activities to promote the city as an investment location, in line with its strategic development directions and policies. The conduct of foreign trade and investment mission(s) must be approved by the Sangguniang Panlungsod and must also secure the approval, where necessary, by concerned national government agencies. 5) Trade and investment mission(s) launch or conducted abroad by the City of Surigao shall be headed by the City Mayor or in his absence by any of his duly authorized member of the Surigao City Investment Board. Provided however that endorsement, participation and/or approval of concerned government agencies like the Department of Foreign Affairs (DFA), DTI-Board of Investments, Bureau of International Trade Promotions, foreign embassies/consulates, and other agencies must be secured. 6) To formulate/recommend strategic development initiatives to facilitate entry of investments to include the promotion and development of industrial estates, business parks and other areas. 5-C. Board Secretariat: The City Investment Promotions Office. 1) To provide secretariat, administrative and technical support services to the operations of the Surigao City Investment Board, the City Investment Promotions Office (CIPO) is hereby created as a separate Division under the Office of the City Mayor. ASEcHI 2) The CIPO shall be headed by one (1) Special Operations Officer IV with salary grade 22, and shall be assisted by two (2) technical assistants with salary grade 14, and one (1) Information Communications Technology (ICT) staff with salary grade 10. 3) Aside from the functions stipulated in item number one hereof, the CIPO shall also be tasked with the formulation and creating of an Investment Promotions Program for consideration and approval by the Board and the Sangguniang Panlungsod, which among others should contain the analysis of the factors surrounding the local investment climate and potentials, the City's competitive advantages, and the strategic directions the City should adopt to effectively attract and service in-bound investments. SECTION 6. An Annual Budgetary Appropriation of not more than Three Million Pesos (P3,000,000.00) shall be provided for in the Regular or Supplemental Budget of the City to support the operations for the Board and the CIPO. CHAPTER V Investment Priority Areas & Incentives SECTION 7. Coverage. Business enterprises or investments in the following areas or activities shall qualify to avail of the incentives and other privileges granted in this Code, viz. : 1) Manufacturing enterprises using raw materials that are available locally within the City and/or neighboring provinces. 2) Manufacturing or processing plants that uses other materials not necessarily available in the locality. 3) Resorts, Hotels. 4) Pioneering enterprises. 5) Renewable energy development projects. 6) Export-oriented industries. 7) International trans-shipment facilities. 8) Information, communications technology (ICT) industries. SECTION 8. Employment. Applicant firms should have a minimum number of 30 employees and of which at least seventy percent 70% of their total workforce should be Surigaonons provided that the skilled labor requirement of the firm is available in Surigao City and the Province of Surigao del Norte. Expatriate workers should constitute not more than twenty percent (20%) of the total workforce. IcSEAH SECTION 9. Amount of Investment. Applicants who shall qualify for incentives and privileges under this Code, provided they fall within the priority areas under Section 7 hereof, shall invest the initial amount of at least 15,000,000.00 excluding the cost of land. The incentives and privileges shall be enjoyed for a period of 3 years reckoned from the approval of the application. Amount of Investment Period of Exemption P15,000,000.00 to P100,000,000.00 3 years P100,000,000.00 above 4 years SECTION 10. Incentives. All qualified and accepted applicants to this Code shall enjoy the following Tax Exemption Privileges for a period stated under Section 8 hereof, viz. : 1) Exemption from the payment of business taxes, and basic property tax except one percent (1%) Special Education Fund, imposed by the City under existing Tax or Revenue Ordinances. SECTION 11. Other Privileges. Aside from the above-stipulated incentives in Section 9, applicants or business enterprises may also be granted the free use of city government-owned lands, provided such areas are not located within existing prime commercial zones, subject to the recommendation of the Board and the approval of the Sangguniang Panlungsod, provided that the applicant must develop the said area with a minimum capital investment on building and/or equipment of no less than Fifteen Million Pesos (P15,000,000.00). Further, the ownership of said development, including building and equipment will be transferred to the city government upon the expiration of the 10-year lease period. Should the registered enterprise however opt to continue the business operation after the expiration of the 10-year period, such may be granted provided a new lease contract on the occupied land/building and equipment shall be executed at a rate determined by the Sangguniang Panlungsod upon the recommendation of the Board. This shall be done with due consideration that the proposed site is not allotted for a specific government use. SECTION 12. Registration. Upon the approval/acceptance of any application to this Code, the applicant shall be required to pay a one-time Registration Fee to the City Treasurer in the amount of P50,000.00, after which the Board shall issue a Certificate of Registration and Exemption to the business enterprise concerned stating thereon the incentives privileges granted under this Code. SECTION 13. Disqualification. Existing business of whatever kind or nature and those that are retired for the purpose of availing of the investment incentives under this Code are not qualified to apply. SECTION 14. Exemption. This Code shall not apply to financing or banking institutions which are supervised by the Bangko Sentral ng Pilipinas (BSP). SECTION 15. Transferability. The incentives and privileges granted under this Code are non-transferable except in the event of death, permanent incapacity or ownership transfer where the transfer of incentives and privileges under this Code shall be in accordance with existing laws governing sole proprietorships, partnerships, corporations, cooperatives, associations and others. CHAPTER VI Miscellaneous Provisions SECTION 16. Annual Inspection. The Surigao City Investment Board shall conduct an annual inspection on the participating firms on their progress either by itself or by requesting a local government agency to conduct the same. Said inspection shall be limited to the total gross sales/receipts, compliance of the minimum wage law, or to the provisions of this Code and the incentives/privileges granted as stated in the Certificate of Registration and Exemption. DHcSIT With respect to those covered by the provisions of Chapter 5, Section 11, a physical examination and inventory of the building and equipment, may be had to determine compliance with the provisions of the lease contract. SECTION 17. Reporting. At the end of each calendar year but not later than April 30, all registered enterprises to this code shall submit copies of duly audited financial statement(s) to the Board, the Sangguniang Panlungsod, the City Treasurer, and the Office of the City Mayor for evaluation and recording purposes. SECTION 18. Violations and Penalty. Any registered enterprise which is found to have violated any provision of this code through misrepresentation, or non compliance thereof 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 Board and the approval of the Sangguniang Panlungsod, without prejudice to the filing of appropriate charges for related violations of applicable laws. SECTION 19. Effectivity. This Code shall take effect after compliance of the required publications and posting. Thereafter, the Surigao City Investment Board shall send copies of this Code to foreign embassies and consulates in the Philippines, to all major business groups and civic clubs in the City of Surigao, headquarters of the Philippine Chamber of Commerce and Industry, Inc., American Chamber of Commerce in the Philippines, and major international trade organizations referred to by the DTI-Board of Investments. SECTION 20. Repealing Clause. All existing City Ordinances inconsistent with the provisions of this Code are hereby repealed accordingly. Enacted on June 8, 2006. I HEREBY CERTIFY to the correctness of the foregoing ordinance. JUAN A. SALDO, JR. Sangguniang Secretary <http://www.surigaocity.gov.ph/phocadownload/userupload/ordinances/business_and_industry/or246-06.pdf> last visited May 20, 2014.