Foreign enterprises seeking to establish an export-oriented company in the Philippines, such as outsourcing and offshoring operations, may opt to register with the Philippine Economic Zone Authority (PEZA) to maximize the tax incentives provided by the investment promotion agency.
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Our large pool of experienced business consultants and legal compliance specialists are dedicated to helping you determine your eligibility for such incentives while providing assistance in securing the necessary documentation to help speed the process of your application with PEZA.
What is the Philippine Economic Zone Authority (PEZA)?
The Philippine Economic Zone Authority (PEZA) is an investment promotion agency (IPA) responsible for administering and regulating tax incentives to foreign enterprises willing to set up or establish their business in Special Economic Zones (SEZs). It is one of the main regulating bodies for tax incentives other than the Board of Investments (BOI).
Foreign enterprises engaged in export-manufacturing or export-oriented business activities can register with PEZA to enjoy tax incentives such as:
- Income tax holiday (ITH) of four to eight years
- ITH bonus of years under certain conditions
- Special corporate income tax (SCIT) rate of 5% based on gross income in lieu of national and local tax rates
- Enhanced deductions (ED) for expenses on production of goods and services, labor, research and development, training, power generation, and domestic input
- Value-added tax (VAT) zero-rating and exemptions on importation or local purchases of goods and services directly and exclusively used on the registered project.
- Duty exemption on imported capital equipment, raw materials, spare parts, or accessories
- Exemption from wharfa*ge dues and export tax, duty, impost, and fees
- Tax credits on imported raw materials
- Tax and duty-free importation of consigned equipment
- Additional deduction for labor expenses
- Employment of foreign nationals in supervisory, technical, or advisory positions
Allow us to do the work for you while you focus on your business activities
With a full suite of business registration and corporate compliance services, our team is dedicated to ensuring that you secure complete and proper documents for your registration with PEZA.
Our pool of experts can also assist you in determining which incentives are best suited for your business in the Philippines. We can help you do the following:
- Determine eligibility for PEZA
- Process all required documents for PEZA
- Identify a PEZA building for you
- Register your new company with PEZA
How to Register Your Business with PEZA
Generally, PEZA follows a 7-step registration process:
- Submit application documents for pre-screening
- Pay application fee of ₱3,600 and secure official receipt
- Submit duly accomplished application form along with other required documents
- Wait for receipt of Board Resolution
- Submit Pre-Registration requirements as stated in Board Resolution
- Pay registration fee of ₱6,000
- Sign registration agreement with PEZA
Registration procedures and documentary requirements may vary depending on the type of business and industry your company will venture into.
Documentary Requirements for PEZA Registration
When registering with PEZA, foreign enterprises must ensure that their company is located within the designated SEZs to be eligible for the incentives. Entrepreneurs who wish to claim full foreign ownership of their business in the Philippines must adhere to the Foreign Investments Negative List provided by the Philippine government.
With the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act in March 2021, PEZA released Memorandum Circular (MC) No. 2021-47 providing guidelines for a uniform manner of registration with various IPAs.
The memorandum mandates all local and foreign enterprises seeking to register with PEZA must register through the PEZA Electronic Application Registration System (eARS).
Under Section 4, Rule 6 of CREATE Implementing Rules and Regulations (IRR), local and foreign enterprises seeking to register with PEZA must submit the following documents:
For enterprise-level Information:
- DTI or SEC Certificate of Registration, whichever is applicable
- Bureau of Internal Revenue (BIR) Certificate of Registration
- Tax Identification Number (TIN)
- General Company Information
- Business capitalization and Ownership Structure
- Authorized Business Representative Details
- Latest Audited Financial Statement (AFS), is applicable
For Project or Activity-level Information:
- Location address, contacts, activity representative details
- Description, classification, and type of activity
- Project or activity set-up timetable
- Committed investment capital and other related details
- Facility or utility requirements
- Projected financial performance
- Projected sales, raw materials, and production
- Projected employment, by type
PEZA may require additional documents depending on the nature of your business or application, such as:
- Articles of Incorporation and By-Laws
- Board Resolution of a duly authorized company representative/signatory
- Project Brief
- Anti-Graft Certificate
- Project Feasibility Study
Generally, the approval time for PEZA registration takes up to 21 days, depending on the requirements submitted and the type of industry you wish to invest into.
Additionally, PEZA Memorandum Circular (MC) No. 2021-48 requires new and existing enterprises in the following economic zones to register their business in the PEZA Information System on Compliance to Environmental Standards (PISCES):
- Cavite Economic Zone
- Mactan Economic Zone & Mactan Economic Zone-II-SEZ
- Baguio City Economic Zone
- Pampanga Economic Zone
- Laguna International Industrial Park-SEZ
- Gateway Business Park-SEZ
- Subic Shipyard-SEZ
- Clark TI-SEZ
PEZA Reportorial Requirements
Once you have registered your company with PEZA, the agency requires PEZA-registered companies to comply with its reportorial requirements on a regular basis. Failure to comply to such requirements may result in fees or penalties on your business.
To help you, provided below is an in-depth list of the applicable dates and requirements as stated under Rule XXI, Section 4 of the PEZA Rules and Regulations to Implement R.A. No. 7916, as Amended:
