Guidelines for Outward Remittance Repatriation for Payment of Royalty, Technical Knowledge/Technical Know-how Fee(s), Technical Assistance Fee(s), and Franchise Fee(s)-2020 (Updated on March 3, 2021)

Domestic and foreign companies are now able to send a certain amount of money abroad as technical assistance fee, royalty, or franchise fee in the following way without the prior approval from BIDA:

1. Technical knowledge/technical knowhow or technical assistance fee(s) – Up to $10,000 per agreement once a year. If this is an advance payment, it must be adjusted with the accumulated C&F value of import of machineries or with the sales revenue of the company after going into operation.

2. Royalty and technical fees – (a) For projects under implementation, not exceeding 6% of the total accumulated C&F value of imported machineries of the concurrent year(s) before going into commercial operation. (b) For projects under commercial operation, not exceeding 6% of the previous years’ sales (excluding Value Added Tax) as declared in the income tax returns.

3. Franchise fee(s) – Fee(s) more than US$ 0.1 million USD will be allowed to be remitted in installments. The 50% of the approved claim will be allowed to remit in the 1st year, 30% in the 2nd year, and the rest of the 20% in the 3rd year.

4. Advance fee(s) – All advance payments, if allowed before generating revenue must be adjusted within one year of going into commercial operation by the entity.

5. Fee(s) payable to Contractor(s) in a project – In case of recurring payments required by any obligatory agreement, maximum 6% of sales revenue (excluding Value Added Tax) as declared in the previous year’s income tax return or VAT return (VAT retruns will be considered only for the first year in case of new project) may be allowed. The payment of such fee(s) may be allowed on quarterly, semi-annually and annual basis as stipulated in the agreement.