To attract foreign investment, the Philippine government offers a range of fiscal and non‑fiscal incentives to international companies that establish operations in the country. One of the most widely used incentive programs is administered by the Philippine Economic Zone Authority (PEZA). Foreign companies seeking these benefits must undergo the PEZA application process.
PEZA incentives help reduce operating costs through tax exemptions, duty‑free importation, simplified customs procedures, and special visa privileges. These benefits are designed to encourage foreign firms to invest, generate employment, and stimulate economic growth in designated economic zones across the Philippines.
Updated PEZA incentives for 2026
Under the CREATE Act (Corporate Recovery and Tax Incentives for Enterprises), PEZA incentives have been modernized and standardized. Registered Business Enterprises (RBEs) may qualify for the following:
Fiscal incentives
- Income Tax Holiday (ITH) – 4 to 7 years depending on industry, location, and project classification
- 5% Special Corporate Income Tax (SCIT) on gross income in lieu of all national and local taxes (for export enterprises inside ecozones)
- Enhanced Deductions (for domestic market enterprises or those opting out of SCIT), including:
- Additional 50% deduction on labor expenses
- Additional 50% deduction on power expenses
- Depreciation allowance of up to 10 years
- Enhanced R&D and training deductions
- VAT zero‑rating on local purchases (subject to BIR and PEZA compliance)
- Duty‑free importation of capital equipment, raw materials, and spare parts
Non‑fiscal incentives
- Simplified import and export procedures through PEZA’s automated systems
- Special non‑immigrant visas for foreign investors, executives, and technical staff
- Multiple‑entry visa privileges for qualified foreign nationals and dependents
- Employment of foreign nationals in supervisory, technical, or advisory roles
- Assistance with permits, clearances, and government coordination
Foreign ownership rules (2026 update)
Foreign ownership in the Philippines is governed by the Foreign Investment Negative List (FINL). Activities not listed in the FINL may be 100% foreign‑owned. However, certain industries remain restricted or require Filipino majority ownership.
PEZA registration does not override FINL restrictions. Foreign investors must ensure their business activity is allowed under Philippine law before applying.
Industries eligible for PEZA registration
To qualify for PEZA incentives, a business must fall under one of the following categories:
- Export Manufacturing
- Agro‑Industrial Export or Bio‑Fuel Manufacturing
- Information Technology (IT) Service Export
- Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO)
- Logistics, Warehousing, and Distribution
- Economic Zone Development and Operation
- Facilities Providers (e.g., utilities, data centers)
- Tourism and Eco‑Tourism
- Medical Tourism
Note: PEZA regularly updates its list of eligible activities to align with national investment priorities. Investors should verify current guidelines before applying.
PEZA application requirements (2026)
Foreign companies must prepare the following documents when applying for PEZA registration:
- Notarized PEZA Application Form
- Company Profile including:
- Parent company information (if applicable)
- Corporate history
- Description of proposed business activities
- List of affiliates registered with PEZA or BOI
- Certificates of Registration (if any)
- Profiles of principal officers
- Audited Financial Statements (if available)
- SEC Certificate of Registration
- Articles of Incorporation and By‑Laws
- Board Resolution authorizing the PEZA application and designating an authorized representative
- Project Brief detailing:
- Technical specifications
- Financial projections
- Manpower requirements
- Capital investment breakdown
How PEZA differs from BOI (2026 clarification)
Many foreign investors confuse PEZA with the Board of Investments (BOI). While both offer incentives, they serve different purposes:
PEZA
- Best for export‑oriented enterprises
- Requires operations inside an ecozone
- Offers SCIT (5% of gross income) after ITH
BOI
- Best for domestic‑market enterprises or strategic industries
- No need to locate inside an ecozone
- Offers enhanced deductions instead of SCIT
Foreign companies should evaluate which incentive structure aligns with their long‑term business model.
Where to get updated PEZA information
PEZA leadership, contact numbers, and zone administrators change frequently. For the most accurate and updated directory, investors should refer directly to:
Official PEZA Website: https://www.peza.gov.ph
The website provides updated contact details, ecozone listings, application forms, and advisory notices.
Conclusion
PEZA remains one of the Philippines’ strongest investment promotion agencies, offering competitive incentives that reduce operational costs and streamline business processes. For foreign companies planning to expand in Southeast Asia, PEZA registration provides a clear pathway to tax benefits, simplified customs procedures, and long‑term operational support.
However, eligibility depends on industry classification, export orientation, and compliance with Philippine investment laws. Thorough preparation and accurate documentation are essential for a successful application.