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TWENTIETH CONGRESS )
REPUBLIC OF THE PHILIPPINES _)
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No._ 4417

Introduced by Representative FRANZ FERNANDEZ LEGAZPI

EXPLANATORY NOTE

Overseas Filipino Workers (OFWs) are the modern-day heroes of our nation. They leave the
country in search for better-paying jobs in foreign lands to provide for their families they leave
behind. Personal remittances of overseas Filipinos grew to its all-time high in 2024, amounting to
$3.73 billion (dollars) or approximately P213 billion (pesos), representing 8.3% of the country’s
gross domestic product (GDP).'

‘The narrative of the OFW as the sole breadwinner of many Filipino families has created an
undue, unnecessary and unstainable burden among our Filipino workers overseas. Despite the
overwhelming recognition and acknowledgment to the sacrifices of every OFW and their significant
contributions to the economy, little to no government support has been available to them upon their
retum to the Philippines.

It is imperative on the government to provide the most needed support systems for all
returning OFWs in recognition to their primary role as a major driver for national economic growth
and development, both at the present and throughout the past several decades.

Under this bill, OFWs are encouraged to engage in business and invest in the country through
the provision of certain benefits and incentives in contribution to the development of the national and
local economy. The measure endeavors to exempt OFW-owned registered enterprises from their
initial income tax and reduce real property and importation of taxes for raw materials, capital
equipment, machineries and spare parts exclusively used in the operation of the OFW-owned
business enterprise.

Furthermore, this measure intends to effectively aid the OF Ws’ reintegration in the Philippine
society through the productive use of their hard-earned income abroad which will inevitably
contribute towards the development of our country.

For the foregoing reasons, the approval of this bill is earnestly sought.

FRANZ FERNANDEZ LEGAZPI
Representative, PINOY WORKERS PARTYLIST

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TWENTIETH CONGRESS )
REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No, 4417

Introduced by Representative FRANZ FERNANDEZ LEGAZPI

AN ACT
PROVIDING BENEFITS AND INCENTIVES TO OVERSEAS
INVESTING IN BUSINESS IN THE PHILIPPI

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Business Incentives for OFWs
Act."

SEC. 2. Declaration of Policy. - It is the policy of the State to promote, at all times, the
welfare of its citizens whether in country or overseas. Further, the State recognizes the significant
contribution of Overseas Filipino Workers (OF Ws) to the national economy through their foreign
exchange remittances and their valuable role as a partner of our nation's progress. At the same time,
the State recognizes the role of business enterprises for employment generation resulting in economic
growth and a strong development foundation for the country

Pursuant to these policies, it is likewise hereby declared to be the policy of the State to
pioneer and develop innovative means to provide incentives and other benefits to returning migrants
who shall engage in business and invest in the Philippines, in order to effectively aid their
reintegration through the productive use of remittances and at the same time contribute towards the
development of national and local economies and skills-transfer.

SEC. 3. Definition of Terms. - As used in this Act the following terms shall mean:

a) "Overseas Filipino Worker (OF W)" is a person who is to be engaged, is engaged or
has been engaged in a remunerated activity in a State of which the person is not a
citizen or on board a vessel navigating the foreign seas other than a government ship
used for military or non-commercial purposes or on an installation located offshore
or on the high seas: Provided, That one whose employment overseas has ceased, by
reason of expiration of such contract or otherwise, shall still be considered an OFW
under this Act if the cessation took place not more than five (5) years before the
filing of an application for registration provided for in Section 8 hereof,

b) “Business Enterprise” is a duly registered business engaged in industry, agribusiness
and/or services, whether a single proprietorship, cooperative, partnership or
corporation. A business engaged in services shall exclude those rendered by (i)
natural persons who are duly licensed by the government afler having passed a
government licensure examination, in connection with the exercise of their
profession, and (ii) juridical persons such as partnerships or corporations engaged in
consultancy, advisory and similar services where the performance of such services
are essentially carried out through licensed professionals, likewise in the connection
with the exercise of their profession

c) "OFW-owned Business Enterprise" is a business enterprise that falls under one of
the following categories: (i) a Sole Proprietorship owned by an OFW; (ii)

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Partnerships, morethan fifty percent (50%) of the capital of which was contributed
by one or more partners who are OFWs; or (iii) a Stock Corporation, more than fifty
percent (50%) of the outstanding capital stock of which is held by one or more
OFWs.

SEC. 4. Tax Exemption. - An OFW-owned business enterprise shall be exempt from the
payment of income tax for a non-extendable period of five (5) years following registration. This
exemption is without prejudice to any other benefit or tax exemption granted to the enterprise by any
other laws.

All Local Government Units (LGUs) are encouraged either to reduce the amount of local
taxes, fees and charges imposed or to exempt an OFW-owned business enterprise from local taxes,
fees and charges

SEC. 5. Other Benefits and Incentives. - An OF W-business enterprise may also avail of the
following incentives:

a) Fifty Percent (50%) reduction on real property taxes imposed on real property for the
operation of the OF W-owned business enterprise:

b) Tax and duty-free importation of raw materials, capital equipment, machineries and
spare parts exclusively used in the operation of the OF W-owned business enterprise:
Provided, that the OFW business shall not sell or re-sell the said equipment for a
period of five (5) years from the time the exemption was granted; and/or

c) Preferential access to financing from government financial institutions at rates below
the market rates,

Provided, That an OF W-owned business enterprise may avail of these incentives for a period
of five (5) years following registration

SEC. 6. Access to Credit. ~ The Overseas Workers Welfare Administration (OWWA) shall
set aside a portion of its fund for reintegration for the purpose of establishing a credit facility for the
start-up or expansion of an OFW business enterprise. The credit facility shall be managed by the
Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP).

SEC. 7. Eligibility of OF W-owned business enterprises. - To qualify for the benefits and
incentives provided to OFW-owned business enterprises under this Act, a business enterprise must
fall under one of the following categories

i, A Sole Proprietorship owned by an OF W;
ii, A Partnership, more than fifty percent (50%) of the capital of which was
contributed by one or more partners who are OF Ws; or
iii, A Stock Corporation, more than fifty percent (50%) of the outstanding capital
stock of which is held by one or more OFWs

SEC. 8. Registration and Issuance of Certificate. - To qualify for the benefits and incentives
under this Act, a business enterprise must apply for registration with the Bureau of Internal Revenue
(BIR) as an OF W-owned business enterprise. Any such application shall be processed by the BIR
free of charge within fifteen (15) working days upon submission of complete documents as provided
in Section 9 of this Act. Otherwise, the OF W-owned business enterprise shall be deemed registered.

SEC. 9. Documentary Requirements. - The BIR shall require an OFW-owned business
enterprise to submit the following requirements in its application for the Certificate of Registration

a) Certificate from the Philippine Overseas Employment Administration (POEA) or
the OWWA that the person seeking registration hereunder of their business entity or
enterprise are OFWs as defined in Section 3(a) of this Act or a copy of their
‘overseas employment contract duly approved by the POEA;

b) Taxpayer Identification Number (TIN);

c) Documents of registration as a business entity or enterprise issued by the
appropriate government agencies such as the Security and Exchange Commission


(SEC) for corporations and partnerships and the Department of Trade and Industry
(DTI) for sole proprietorships; Provided, That in the case of micro enterprises as
defined herein, registration with the office of the municipal or city treasurer shall be
deemed sufficient compliance with this requirement,

d) Articles of Incorporation in the case of new corporations;

e) Partnership Agreement in the case of new partnerships;

f) General Information Sheet (GIS) in the case of existing corporations and
partnerships.

No other document shall be required for the processing of this application.

SEC. 10. Financial Literacy Program for OFWs; Information Dissemination. - To ensure
that the incentives and benefits provided for under this Act shall be effectively harnessed and
maximized, the Commission on Filipinos Overseas (CFO), the OWWA, and the National
Reintegration Center of OFWs (NCRO) shall institutionalize the conduct of financial literacy
programs and capacity building seminars on entrepreneurship and investment programs for Overseas
Filipino Workers: Provided, That in the conduct of pre-employment/pre-departure orientation
seminars, post-arrival/reintegration seminars, the financial literacy programs shall likewise be
incorporated as an integral part thereof: Provided, further, That the Department of Foreign Affairs
(DFA), CFO, POEA, OWWA, and all other relevant government agencies with respect to overseas
Filipinos, including all local government units, shall extensively carry out information dissemination
on the benefits and program provided for in this Act.

SEC. 11. Fraud or Misrepresentation. - Any business entity found to have committed fraud
or misrepresentation for the purpose of qualifying for the benefits hereunder shall be immediately
disqualified as a beneficiary hereof and its Certificate of Registration cancelled, without prejudice to
the assessment and collection of back taxes for the period corresponding to its exemption, as well as
to any administrative, criminal or civil liability under existing laws

SEC. 12. Non-Transferability. - The benefits and incentives provided in this Act cannot be
transferred to any other person, association or business entity.

SEC. 13. Cessation of Operations or Retirement of Business. - Any enterprise registered
hereunder that retires or otherwise ceases its business operations shall thereupon be excluded from
the coverage of this Act. Within thirty (30) days therefrom the enterprise shall report the fact of such
retirement or cessation to the BIR, which shall then cancel the enterprise's Certificate of Registration.

SEC. 14. Implementing Rules and Regulations. - The BIR in coordination with the POEA,
DTI, and SEC shall promulgate, not later than sixty (60) days upon the effectivity of this Act, the
necessary rules and regulations for its effective implementation

or unconstit
and effect.

©. 15. Separability Clause. - \f any provision of this Act is subsequently declared invalid
ional, other provisions hereof which are not affected thereby shall remain in full force

SEC. 16. Repealing Clause. -All laws, presidential decrees, executive order, issuances,
presidential proclamations, rules and regulations or parts thereof which are contrary to and
inconsistent with any provisions of this Act are hereby repealed, amended or modified accordingly

SEC. 17. Effectivity Clause. - This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in two (2) newspapers of general circulation in the
Philippines.

Approved,