PEZA Accreditation and BOI Registration for Philippine Businesses

One of the perks of doing business in the Philippines is the existence of government incentives programs aimed towards foreign investors. At FilePino, we can help you take advantage of these various fiscal and non-fiscal incentives by facilitating your registration with either the Board of Investments (BOI) or the Philippine Economic Zone Authority (PEZA). Both of these agencies are attached to the Department of Trade and Industry (DTI) and registering with either will have its own pros and cons.

PEZA Registration

Like the BOI, the PEZA is tasked with investment promotion, but is focused on enterprises that are engaged in export-oriented manufacturing and services, which are located in specially designated Special Economic Zones or ecozones.

PEZA Incentives

In general, enterprises located in ecozones are entitled to incentives that include:

• • An Income Tax Holiday (ITH) of 4 years for non-pioneer projects and 6 years for pioneer projects. Extension years can also be granted provided the company meets certain criteria.
  • After the ITH expires, a 5% Special Tax on Gross Income and exemption from all local and national taxes is applicable.
  • Zero taxes and duties in the importation of capital equipment, raw materials, machineries, and spare parts. An exemption on wharfage duties and export tax is applicable as well.
  • Zero VAT on local purchases and an exemption for all local government imposts, fees, licenses, or taxes.
  • Zero expanded withholding tax.
  • Non-fiscal incentives such as simplified import-export procedures, employment of non-resident foreign nationals, special visas for foreign employees in certain positions, and more.

Qualifications and Requirements

The main requirements that an enterprise must comply with in order to qualify for PEZA registration are location – it must be located in a zone or a building that is a PEZA designated zone – and eligibility of activity. Eligible activities include export manufacturing, information technology (IT) service export, tourism, medical tourism, agro-industrial export manufacturing, and so on. The documentary requirements for registration include a project brief and feasibility study and a financial outline.

How We Can Help

Whether you’re a new or an existing enterprise, you can rely on our team of experts for a broad range of services. These include the identification of a PEZA building or zone that will best meet your business’ needs, determining your eligibility, and the preparation and processing of all the required documents for registration.

BOI Registration

The BOI is the primary agency responsible for investment promotion in the country and offers a wide range of incentive schemes for both Filipino and foreign investors.

BOI Incentives

Among the incentives that BOI-registered companies enjoy are the following:

• • An Income Tax Holiday (ITH) commencing from the start of commercial operations: 6 years for pioneer-status new projects; 4 years for non-pioneer status new projects; 3 years for expansion projects; 6 years for new or expansion projects in less developed areas; and 3 years for modernization projects. Enterprises that meet certain requirements can also take advantage of a bonus ITH year.
  • Taxes and duties exemption on imported spare parts as well as an exemption on wharfage dues and export tax.
  • Reduced duty rates on capital equipment, spare parts, and accessories.
  • Tax credits on domestic breeding stocks, genetic material, raw materials, and supplies.
  • Additional deductions from taxable income on labor expense as well as necessary and major infrastructure work.
  • Other non-fiscal incentives such as the employment of foreign nationals, streamlined customs procedures, the importation of consigned equipment, and more.

Qualifications and Requirements

Firms can register with the BOI if they engage in any of the activities that are listed in the Investment Priorities Plan (IPP), which identifies the country’s priority investment areas. The IPP is prepared annually. For non-pioneer industries, however, foreign ownership is limited to 40% and below unless the company can commit to export sales of at least 70% of their total sales. Other requirements include a project outline and feasibility report and other supporting documents.

How We Can Help

We will not only help you determine whether or not your enterprise is eligible for BOI registration, we will also help you get a good grasp of which incentives are best for you. Our legal experts will help you prepare all the necessary documentation and take care of submitting and processing them with the BOI.

Our Other Services

For more information on tax incentives and the Philippine tax structure, take a look at our Tax & Licenses page. Contact us anytime if you require tax consultation services.