PEZA Application: How to Register Foreign Business in the Philippines

In order to attract foreign investment, the Philippine government is extending certain incentives to international companies who wish to expand their business in the country. PEZA application is then required for foreign businesses to avail of such privileges.
Incentives and sweeteners for eligible companies include exemption of payment of certain taxes, import duties or other fees regularly charged to other businesses.
The Department of Trade and Industry established the Philippine Economic Zone Authority or PEZA aimed at providing fiscal and non-fiscal incentives such as tax holidays, zero-rated vat, and special visa privileges to businesses operating at certain areas classified as economic zones.

Summary of fiscal and non-fiscal incentives businesses of foreign investors can avail of from PEZA

• Income Tax Holiday or 100% for exemption from Corporate Income Tax.
  • 4 Years for Non-pioneer project
  • 6 Years for Pioneer project
• After the Income Tax Holiday, a 5% special tax on gross income will be levied.
• Exemption from expanded withholding tax
• Exemption from wharfage dues and export tax, impost or fees
• Exemption from payment of any and all local government imposts, fees, licenses or taxes
• Tax and duty-free importation of raw materials, capital equipment, machinery, and spare parts
• VAT zero-rating of local purchases subject to compliance with BIR and PEZA requirements
• Simplified Import-Export Procedures (Electronic Import Permit System and Automated Export Documentation System)
• Extended Visa Facilitation Assistance to foreign nationals their spouses and dependents
• Non-resident Foreign Nationals may be employed by PEZA-registered Economic Zone Enterprises in supervisory, technical or advisory positions
• Special Non-Immigrant Visa with Multiple Entry Privileges for the following non-resident Foreign Nationals in a PEZA-registered Economic Zone Enterprise: Investor/s, officers, and employees in supervisory, technical or advisory position, and their spouses and unmarried children under twenty-one years of age

Foreign ownership is restricted for enterprises undertaking activities listed in the Foreign Investment Negative List (FINL) of the Philippines. This means there is a specific list of industries where foreign entities are allowed to invest. This regulation tells you the business fields that are fully and partially open to foreign investment in the Philippines

Eligible businesses after PEZA application approval

To avail of the above list of incentives, businesses must belong within any of the following industries:

• Agro-industrial Bio-Fuel Manufacturing
• Agro-industrial Export Manufacturing
• Economic Zone Development and Operation
• Export Manufacturing
• Facilities Provider
• Information Technology (IT) Service Export
• Logistics and Warehousing Services
• Medical Tourism
• Tourism
• Utilities

As of November 2017, there are:

• 74 Manufacturing Economic Zone
• 262 Information Technology Parks/Centers
• 22 Agro-Industrial Economic Zone
• 19 Tourism Economic Zones
• 2 Medical Tourism Parks/Centers

PEZA Application Requirements

• Notarized PEZA Application Form
• Company Profile that includes:
  • The company applying for and the parent company, if any.
  • Outline of the company history
  • Includes the Business Projects and activities that are currently in the operation or proposal
  • List of affiliated companies that are currently registered already with PEZA and Board of Investments, alongside the:
    • Certificates of Registration for the Companies
    • Terms and conditions
  • Profile of the Company’s Principal Officers
  • Audited Financial Statements, if any.
  • Certificate of Registration with the Securities and Commission (SEC)
  • Articles of Incorporation
  • Board Resolution authorizing the PEZA Application noting the designated authorized personnel
  • A project brief stating the technical, managerial, and financial information of the project or business.

For more details, please reach out to PEZA through the main office trunk line or appropriate department under the directory below: