PEZA and Its Benefits

One of the many benefits of outsourcing to the Philippines is the ability to reduce expenses. You would want a smooth experience in every way, but especially when changing teams. You probably can't wait to start utilizing the highly esteemed Filipino talent pool and returning to your primary business objectives. Waiting in line for business licences and paying fees to government organizations shouldn't be a concern when you're ready to benefit from outsourcing.

What is PEZA?

Philippine Economic Zone Authority (PEZA) promotes the establishment of economic zones in the Philippines for foreign investments. PEZA is also the Philippine government agency tasked to extend assistance, register, grant incentives to and facilitate the business operations of investors in export-oriented manufacturing and service facilities inside selected areas throughout the country proclaimed by the President of the Philippines as PEZA Special Economic Zones. - PEZA

PEZA Incentives

To be eligible for PEZA accreditation, your company must operate in an Ecozone and must fall under one of the following sectors:

• Simplified Import and Export Procedures

• IT (Information Technology) Service Export

• Tourism

• Medical Tourism,

• Agro-industrial Export Manufacturing,

• Agro-industrial Biofuel Manufacturing,

• Logistics and Warehousing Services,

• Economic Zone Development and Operation,

• Facilities Providers

• Utilities

Registered business enterprises (RBEs) are also qualified to:

Fiscal Incentives

1. Export enterprises may be granted an Income Tax Holiday (ITH) of four (4) to seven (7) years depending on the location and industry priorities*

2. Export enterprises may be granted an Income Tax Holiday (ITH) of four (4) to seven (7) years depending on the location and industry priorities*

3. Tax-and-duty-free importation of capital equipment, raw materials, spare parts or accessories

4. VAT exemption on importation and VAT zero-rating on local purchases for goods and services directly or exclusively used in the registered project or activity of export enterprise for the period of registration of the said project or activity.

5. Domestic sales allowance of up to 30% of total sales

6. Exemption from payment of local government taxes and fees for the duration of the period of availment of the 5% SCIT incentive

Non-fiscal Incentives

1. Special non-immigrant visa with multiple entry privileges for foreign investors and immediate family members

2. Employment of non-resident foreign nationals in supervisory, technical, or advisory positions

3. Long-term land lease of up to 75 years

There are a number of post-registration requirements that must be met once your company has received PEZA registration.

1. Application for Approval of Start of Commercial Operations (SCO)
   This is a one-time application that validates your Income Tax Holiday(ITH) Incentives and PEZA Certificate of Available Incentives. Upon approval, PEZA will make available a notarized certification of the confirmed SCO date for your business. (ERD.2.F.005).

2. Re-validate Income Tax Holiday(ITH) Entitlement
   There are two items to be re-evaluated.

   a. Validation of Machinery and Equipment
   Once you have made the necessary investment in equipment, machinery, and investment cost per seat, PEZA will issue a Notice of Confirmation.

   b. Value-Added Tax (VAT) Zero-Rating and Available Incentives
   After receiving the SCO approval and ITH incentive validation, you can obtain the PEZA Certificate of Available Incentives. This certificate lists the incentives offered and the requirements set forth for firms registered with PEZA.

3. Renewal of Your PEZA Certificate

   a. Renewal of PEZA Certificate of Available Incentives
   You can obtain the updated certificate once you have the SCO approval and ITH incentive validation. It also lists the incentives that are available to your business and the requirements for utilizing them.

   b. Renewal of VAT Zero-Rating Certificate
   Your compliance with PEZA's standards for registration is attested to by the VAT Zero-Rating Certificate. It also lists the financial incentives that your PEZA-registered business is eligible to earn each fiscal year.

4. Reportorial Compliances

For your convenience, we provide post-registration services to help you submit reportorial paperwork, update your certificates, and verify your ITH incentives with PEZA.