If you’re considering investing in the Philippines, you may have concerns about the local laws and regulations governing the repatriation of your investment income to your home country. Fortunately, the Philippine government has established an investor-friendly framework with liberalized policies to your advantage.
Under Section 4 of the Investment Incentives Act (R.A. 5186), as a non-resident investor, you have the right to repatriate your earnings and/or the full proceeds from the liquidation of your investment in the original currency based on the exchange rate prevailing at the time of repatriation. During repatriation of investments, Authorized Agent Banks (AABs) normally require your submission of a Bangko Sentral Registration Document (BSRD), supporting documents showing the amount to be repatriated, and/or original computation of peso amount to be converted to foreign exchange, as the case may be.
This is where a BSRD becomes essential. Read on as this article provides a step-by-step guide on obtaining this registration document, along with helpful tips for ensuring a smooth repatriation of your investment capital and earnings.
What is a Bangko Sentral Registration Document (BSRD)?
A Bangko Sentral Registration Document (BSRD) is a document issued by the Bangko Sentral ng Pilipinas (BSP) to non-resident foreign investors, listing all their onshore investments registered with the central bank.
Foreign Investments Registrable with BSP (for BSRD Issuance)
Under BSP Circular No. 1192, series of 2024, the following foreign investment instruments listed in Section 36 of the Manual of Regulations on Foreign Exchange Transactions (FX Manual) shall be registered with the BSP:
- Assigned capital and operational working fund for onshore branches, regional headquarters, regional operating headquarters and offices, and representative offices;
- Contributed capital for onshore partnerships and joint ventures;
- Ownership or purchase of condominium units;
- Capitalized expenses incurred by foreign firms pursuant to government-approved service contracts or similar contracts for oil, gas, and geothermal energy exploration and development;
- Equity securities issued onshore by residents that are not listed at an onshore exchange;
- Debt securities issued onshore by private sector residents that are not listed at an onshore exchange and not covered by the provisions of Part 3, Chapter I of the FX Manual;
- Investment funds created onshore by residents (e.g., MFs and UITFs), whether listed or not listed at an onshore exchange;
- Philippine Depository Receipts (PDRs) that are not listed at an onshore exchange;
- Debt securities issued onshore by non-residents that are not listed at an onshore exchange;
- Instruments issued by residents and non-residents which are not covered by Sections 33, 34, and the provisions of Part Three, Chapter I of the FX Manual; and
- Instruments under Section 36.1 (a-g) used as collateral involving the transfer of legal or beneficial ownership of the collateral to the non-resident investor.
Foreign Investments Registrable with BSP through AABs (no BSRD required)
On the other hand, the BSP Circular No. 1192 lifted the BSRD requirement for the following foreign investment instruments listed under Section 37 of the FX Manual:
- Debt securities issued onshore by the National Government and other public sector entities;
- Equity securities issued onshore by residents that are listed at an onshore exchange (e.g., Philippine Stock Exchange);
- Debt securities issued onshore by private sector residents that are listed at an onshore exchange and not covered by the provisions of Part Three, Chapter I of the FX Manual;
- Exchange-Traded Funds issued or created onshore by residents;
- Philippine Depository Receipts (PDRs) that are listed at an onshore exchange;
- Peso time deposits with an AAB with a maturity of at least 90 days;
- Equity securities issued onshore or offshore by non-residents that are listed at an onshore exchange;
- Debt securities issued onshore by non-residents that are listed at an onshore exchange; and
- Instruments under Section 37.1 (a-h) used as collateral involving the transfer of legal or beneficial ownership of the collateral to the non-resident investor.
These investment instruments are rather considered registered upon reporting by the registered AAB to the BSP. For this purpose, the non-resident investor or an authorized representative must submit the required documents, including proof of funding and an “Authority to Disclose Information” form, to the registering AAB.
Purposes of BSRD
Basically, a BSRD serves as an investor’s proof of registration of onshore investments and the BSP’s monitoring of an investor’s compliance with financial regulations, such as the Anti-Money Laundering Act and payment of taxes under the National Internal Revenue Code (NIRC).
The BSRD allows an investor to buy foreign exchange (FX) with Philippine pesos from the Authorized Agent Banks (AABs) or AAB foreign corporations and swiftly process the repatriation of capital, dividends and/or earnings to the investor’s origin country. Without this registration document, your repatriation can be delayed or rejected, as banks will require this.
How to Apply for a BSRD (Step-By-Step Process and Requirements)
The application process for a Bangko Sentral Registration Document (BSRD) is straightforward, though you may need expert assistance in preparing the documentary requirements and additional compliance, if necessary. Here’s a step-by-step guide:
1. Ensure That You and Your Investments are Eligible for a BSRD.
You may qualify for a BSRD if you are a non-resident foreign investor, i.e., whether you are an individual, corporation, or juridical person, and apply for registration within one year prior to the date of your inward remittance of the foreign exchange (FX) to fund your investment in the Philippines.
2. Prepare Your Required Documents.
You need to prepare a cover letter, a completed application form (i.e., Application for Foreign Investments (Annex W of the FX Manual)), and other supporting documents under Appendix 10.C of the FX Manual.
3. Submit Your BSRD Application to BSP.
Once your documentary requirements are complete, you may submit them to the BSP-International Operations Department (IOD) at Room 301, 5-Storey Building, BSP Manila. Select AABs, such as the Land Bank of the Philippines, are also authorized to process BSRD applications. Additional documents may also be required during the review of your application.
4. Claim Your BSRD.
If your application is found complete and in order, you will be advised by the BSP-IOD or AAB to claim your Bangko Sentral Registration Document (BSRD). Keep this document for future repatriation of your funds.
Additional Tips for Smooth Repatriation of Your Investment Capital and Income
Repatriating investment capital and earnings is not a one-size-fits-all transaction. It can be a complex process depending on your circumstances. With careful planning, however, it can be a seamless experience. Here are our additional tips:
1. Ensure Your Legal Compliance and Proper Registration with BSP.
By registering your foreign investments with the BSP and obtaining a BSRD, you can easily repatriate your capital and remit earnings in the future through AABs. Without this registration, finding alternative repatriation channels can be challenging.
2. Understand Local Taxes on Foreign Investment Earnings.
Your earnings derived from your foreign investments in the Philippines are subject to taxes at varying rates. For instance, non-resident foreign corporation (NRFC) dividends are taxed at 25% (reduced to 15% with a tax treaty), branch profits at 15%, and interest from foreign loans at 20%, also with potential reductions under tax treaties.
3. Consult Local Experts.
If you’re unfamiliar with the investment laws and regulations in the Philippines, consider consulting local experts, such as corporate lawyers and tax professionals, who can help you ensure legal compliance, navigate complexities, and minimize transaction delays.
4. Keep Your Documents Organized.
Having the correct and up-to-date documentation can speed up the repatriation process. Secure your BSRD, proof of tax payments, and other financial documents in a single file to ensure you can quickly provide them when requested by banks or other regulatory authorities.
5. Consider the Impact of Currency Fluctuations.
Currency fluctuations can impact how much you receive when repatriating investment capital and income, with unfavorable exchange rates potentially reducing your realized returns. To manage this, consider studying the market trends and exploring hedging options.
… and you might just need our assistance.
FilePino is a one-stop business consulting firm headquartered in Bonifacio Global City (BGC), Taguig, Metro Manila—one of the major financial and business districts in the Philippines. We offer a comprehensive suite of top-tier corporate services, especially to foreign nationals and entities who want to start a business or make foreign investments in the country.
Need help with obtaining your BSRD? Set up a consultation with FilePino today! Call us at (02) 8478-5826 (landline) and 0917 892 2337 (mobile) or send an email to info@filepino.com.
