Outline:

1.) PEZA/BOI Incentives

2.) Requirements to avail Incentives
3.) Reportorial Requirements
4.) BOI vs PEZA

Fiscal and non-fiscal incentives given by PEZA to extend assistance to

several business operations.

 Fiscal Incentives

o Income Tax Holiday (ITH) – 100% exemption from

corporate income tax

o Upon expiry of the Income Tax Holiday - 5% Special Tax on

Gross Income and excemption from all national and local
taxes (“Gross Income” refers to gross sales or gross
revenues derived from the registered activity , net of sales
discounts, sales returns and allowances and minus cost of
sales or direct costs but before any deduction is made for
administrative expenses or incidental losses during a given
taxable period)

o Tax and duty free importation of raw materials, capital

equipment, machineries and spare parts.

o Exemption from wharfage dues and export tax, impost or

fees

o VAT zero-rating of local purchases subject to compliance

with BIR and PEZA requirements

o Exemption from payment of any and all local government

imposts, fees, licenses or taxes. However, while under
Income Tax Holiday, no exemption from real estate tax, but
machineries installed and operated in the economic zone
for manufacturing, processing or for industrial purposes
shall be exempt from real estate taxes for the first three (3)
years of operation of such machineries. Production
equipment not attached to real estate shall be exempt
from real property taxes

o Exemption from expanded withholding tax

  Non-fiscal Incentives

o Simplified Import – Export Procedures (Electronic Import

Permit System and Automated Export Documentation
System).

o Non-resident Foreign Nationals may be employed by PEZA-

registered Economic Zone Enterprises in supervisory,
technical or advisory positions.

o 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. PEZA extends Visa Facilitation
Assistance to foreign nationals their spouses and
dependents.

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.

Activities Eligible for PEZA Registration and Incentives

1. Export Manufacturing - manufacturing, assembly or processing activity
resulting in the exportation of at least 70% of production. (“Manufacturing /
Processing” shall mean the process by which raw materials or semi-finished
materials are converted into a new product through a change in their
physical, mechanical or electro-magnetic characteristics and/or chemical
properties. “Assembly” shall mean the process by which semi-finished parts
or materials are put together or combined to form a distinct product without
substantially changing its physical or mechanical characteristics or electro-
magnetic and/or chemical properties.) Eligible firms shall qualify for
registration as “Economic Zone Export Manufacturing Enterprise.”

2. IT (Information Technology) Service Export - IT service activities, of

which 70% of total revenues is derived from clients abroad. (“IT Service
Activities” are activities which involve the use of any IT software and/or
system for value addition). Among the IT Service activities eligible for
incentives are: IT-enabled services such as business process outsourcing, call
centers, data encoding, transcribing and processing, etc.; software
development and application, including programming and adaptation of
system softwares and middlewares; for business, media, e-commerce,
education, entertainment, etc.; content development for multi-media or
internet purposes; and others. Eligible firms shall qualify for registration as
“IT Enterprise.”

3. Tourism – establishment and operation within PEZA Tourism Special

Economic Zones of sports and recreation centers, accommodation,
convention, and cultural facilities and their special interest attraction
activities / establishments, with foreign tourists as primary clientele. Eligible
firms shall qualify for registration as “Tourism Economic Zone Locator
Enterprise.”

4. Medical Tourism – medical health services, endorsed by the Department

of Health, with foreign patients as primary clientele. Eligible firms shall
qualify for registration as “Medical Tourism Enterprise” in a Medical Tourism
Special Economic Zone Park or Center.

5. Agro-industrial Export Manufacturing – processing and or

manufacturing of agricultural products resulting in the exportation of its
production. (“Processing” shall mean the conversion of any agricultural and
marine products from its raw state into intermediate or final product which
undergo physical and/or chemical change through mechanical and/or
chemical process.) Eligible firms shall qualify for registration as “Agro-
Industrial Economic Zone Export Enterprise.”

6. Agro-industrial Bio-Fuel Manufacturing – specialized manufacturing

of agricultural crops and eventual commercial processing which shall result
in the production of clean energy such as bio-fuels and the like. Eligible firms
shall qualify for registration as “Agro-Industrial Economic Zone Enterprise.”

7. Logistics and Warehousing Services - (a) operation of a warehouse

facility for the storage, deposit, safekeeping of goods for PEZA-registered
Economic Zone Export Manufacturing Enterprises, and or (b) importation or
local sourcing of raw materials, semi-finished goods for resale to - or for
packing / covering (including marking / labeling) cutting or altering to
customers’ specification, mounting and/ or packaging into kits or marketable
lots for subsequent sale to - PEZA-registered Export Manufacturing
Enterprises for use in their export manufacturing activities, or for direct
export, or for consignment to PEZA-registered Export Manufacturing
Enterprises and eventual export. Eligible firms shall qualify for registration
as “Economic Zone Logistics Services Enterprise.”

8. Economic Zone Development and Operation :

8.a. Manufacturing Economic Zone Development / Operation -

development, operation and maintenance of an economic zone for export
manufacturing enterprises, inclusive of the required infrastructure, facilities
and utilities such as light and power system, water supply and distribution
system, sewerage and drainage system, pollution control devices,
communication facilities, paved road network, administration building.
Eligible firms shall qualify for registration as “Manufacturing Economic Zone
Developer / Operator.”

8.b. IT Park Development / Operation – development, operation and

maintenance of an area as a complex capable of providing infrastructures
and other support facilities required by IT Enterprises, as well as amenities
required by professionals and workers involved in IT Enterprise, or easy
access to such amenities. Eligible firms shall qualify for registration as “IT
Park Developer / Operator.”

8.c. Tourism Economic Zone Development / Operation – development,

operation and maintenance of an integrated resort complex, with prescribed
carrying capacities of tourist facilities and activities, such as but not limited
to, sports and recreation centers, accommodations, convention and cultural
facilities, food and beverage outlets, commercial establishments and other
special interest and attraction activities / establishments, and provided with
roads, water supply facilities, power distribution facilities, drainage and
sewage systems and other necessary infrastructure and public utilities.
Eligible firms shall qualify for registration as “Tourism Economic Zone
Developer / Operator.”

8.d. Medical Tourism Economic Zone Development / Operation –

development, operation and maintenance of a Medical Tourism Park or
Medical Tourism Center which are planned and designed in accordance with
the standards of the Department of Health and the Department of Tourism to
have support facilities and services required for health and wellness, and
provided with required infrastructure facilities and utilities. Eligible firms shall
qualify for registration as “Medical Tourism Economic Zone Developer /
Operator.”

8.e. Agro-Industrial Economic Zone Development / Operation –

development operation and maintenance of an agro-industrial economic
zone planned and designed to have support facilities and services required
for processing and agro-based manufacturing facilities, and provided with
the required infrastructure facilities and utilities. Eligible firms shall qualify
for registration as “Agro-Industrial Economic Zone Developer / Operator.”

8.f. Retirement Economic Zone Development /Operation –

development. operation and maintenance of a Retirement Economic Zone
Park or Center, planned and designed in accordance with the accreditation
standards of the Philippine Retirement Authority, and provided with the
required infrastructure facilities and utilities. Eligible firms shall qualify for
registration as “Retirement Economic Zone Developer / Operator.”

9. Facilities Providers :

9.a. Facilities for Manufacturing Enterprises - construction as owner

/operator of factory buildings inside a PEZA Special Economic Zone for lease
to PEZA-registered Export Manufacturing Enterprises. Eligible firms shall
qualify for registration as “Economic Zone Facilities Enterprise.”

9.b. Facilities for IT Enterprises – construction as owner/operator of

buildings and other facilities inside IT Parks which are leased to PEZA-
registered IT Enterprises. Eligible firms shall qualify for registration as “IT
Park Facilities Enterprise.”

9.c. Retirement Facilities – establishment, operation and management of

retirement facilities and other related activities, with foreign retirees as
primary clientele, duly endorsed by the Philippine Retirement Authority, and
located in a Retirement Economic Zone. Eligible firms shall qualify for
registration as “Retirement Economic Zone Facilities Enterprise.”

10. Utilities – establishment, operation and maintenance of light and power

systems, water supply and distribution systems inside Special Economic
Zones. Eligible firms shall qualify for registration as “Economic Zone Utilities
Enterprise.”

Procedure For Registration and Requirements

Where to File:

Application to be filed with PEZA / EDD

PEZA

Roxas Boulevard corner San Luis Street, Pasay City, Philippines

Tel. No.: (632) 551-3454 or 551-3455; Fax No.: (632) 891-6380; Email:
info@peza.gov.ph

Ecozone Development Department

2/F Almeda Building, San Luis

Corner Roxas Boulevard, Pasay City

Tel. No.: (632) 551-3440

Fax No.: (632) 551-9518

Email: ecozone@peza.gov.ph

How to File:

V. PEZA Registration of IT Parks and Buildings

A. Procedure and Requirements for New Ecozone Development

Stage 1. Pre-qualification Clearance

ATTACHMENTS/ DOCUMENTARY REQUIREMENTS

Filing of Application

1. Owner/s of private lands or other person/s or entity/ies duly authorized by the

landowner/s intending to develop the area as ecozone shall file the application to
PEZA / EDD by submitting the following:

a. Application Form For registration as a Special Economic Zone(notarized)

b. Anti-Graft Certificate Anti-Graft Certificate(notarized)

c. SEC Registration and Articles of Incorporation

d. Audited Financial Statements (for the last three years of operation, where
applicable)

e. Board Resolution / Special Power of Attorney designating the company's

authorized representative to PEZA

f. Project Description (Development Plan and Timetable)

g. Vicinity map reflecting the various land uses and important verifiable landmarks
within one (1) kilometer radius of the project site

h. Proof of land ownership or any perfected contract / document confirming the

applicant's authority / clearance to use the land for economic zone development
and related purposes

If the applicant is not the registered owner, a perfected contract / document

confirming the applicant's authority / clearance to apply for and use the land for
ecozone and related purposes is required.

i. Endorsement from the Sangguniang Bayan / Panlungsod for the development of

the proposed economic zone (i.e. all local government units of all municipalities and
cities with areas included in the proposed economic zone)
j. Certification from the Department of Agriculture that the area for the proposed
economic zone is not or has ceased to be economically feasible and sound for
agricultural purposes (i.e. the area is marginal for agricultural use)

k. DAR Conversion Clearance or Exemption Certificate (or HLURB Zoning

Certification, whichever is applicable) and if the proposed area is zoned as
agricultural on or before 15 June 1988, a DAR Conversion Clearance / Order is
required. However, if the zoning of the area is non-agricultural on or before said
date, a DAR Exemption Certificate or HLURB Zoning Certification shall be required

l. Other documents as may be required by PEZA.

PROCEDURE

2. EDD checks completeness of documents.

a. If document is complete, EDD receives the application and issues the

corresponding Order of Payment.

b. If document is not complete, application shall not be received.

3. The proponent brings the Order of Payment to the PEZA Cashier and pays the
application / processing fee.

Processing and Evaluation

4. The EDD Manager assigns the application to the Evaluator. The Evaluator inspects
the proposed area and makes the evaluation report.

5. The EDD Division Head reviews evaluation report and submits to EDD Manager
for final review.

6. Manager reviews the evaluation report and endorses the same to the Group
Manager / Deputy Director General for final comments.

Approval Process

7. Group Manager endorses the recommendation to the Director General.

8. The final evaluation report and the recommendation is endorsed by the Director
General to the PEZA Board of Directors.

9. The Deputy Director General presents the recommendation to the Board for
approval.

10. The PEZA Corporate Secretary issues the corresponding Board Resolution within
a reasonable period of time.
11. EDD informs the proponent of the Board decision and correspondingly advises
the applicant to take the appropriate course of action:

a. If action on the application is deferred, the applicant is advised of the reason/s for
deferment;

b. If the application is approved, the applicant is advised to submit the documentary

requirements for Presidential Proclamation

Stage 2. Presidential Proclamation

ATTACHMENTS / DOCUMENTARY REQUIREMENTS

Submission of documents

12. Proponent submits the following documentary requirements for Presidential

Proclamation:

a. Proof of land ownership or long-term lease agreement on the whole area of the
proposed economic zone

b. Verified Survey Returns and technical description of the area for the proposed
economic zone

c. Certification from the National Water Resources Board that the identified
source(s) of water for the economic zone shall not cause water supply and related
problems in adjacent communities

d. Environmental Compliance Certificate issued by the Department of Environment

and Natural Resources

e. Other documents as may be required by PEZA

PROCEDURE

13. EDD checks completeness of documents.

a. If documents are not complete, EDD notifies proponent using PEZA EDD Form No.
004

b. If documents are complete, EDD evaluates and prepares the draft Presidential
Proclamation and the corresponding requests for Certifications of Concurrence from
concerned government agencies, as follows:

i. Local Government Unit/s where the ecozone is located;

ii. Department of Agrarian Reform;

iii. Department of Environment and Natural Resources;

iv. Housing and Land Use Regulatory Board; and

v. Land Registration Authority

14. The Certifications of Concurrence from concerned agencies are obtained

pursuant to the requirement of Completed Staff Work mandated under a
Presidential Memorandum dated 10 June 1999 Manager for final review.

15. EDD Manager, upon final review, endorses all documents to Deputy Director
General for endorsement to the Director General for signing.

16. Director General signs endorsement letter and forward it to the DTI Secretary for
endorsement to the President.

17. Office of the President transmits a copy of the Presidential Proclamation to the
Office of the Director General.

18. EDD Division Head reviews draft proclamation and submits to EDD Proclamation.

Stage 3. Registration

ATTACHMENTS / DOCUMENTARY REQUIREMENTS

22. Proponent submits the following documentary requirements for the signing of
the Registration Agreement:

a. Development plans of the economic zone; and

b. Other documents as may be required by PEZA.

PROCEDURE

19. EDD checks completeness of documents

a. If documents are not complete, EDD notify proponent using PEZA EDD Form No.
004 (Annex B-6).

b. If documents are complete, EDD issues the Order of Payment (PEZA-EDD Form
No. 002, Annex B-4) for the registration fee and the proponent shall pay the fee
prior to the actual signing.

20. EDD requests the Legal Services Group (LSG) for the preparation of the
Registration Agreement.

21. LSG prepares the draft Registration Agreement and provides EDD with a draft to
be forwarded to the developer / operator for comments.

22. EDD arranges the date of signing of the Registration Agreement with the Office
of the Director General and the proponent.
PEZA’S REPORTORIAL REQUIREMENTS

1. Rule XXI, Section 4 of the PEZA Rules and Regulations to

Implement R.A. No. 7916, as Amended

“An ECOZONE Enterprise shall maintain distinct and separate books of

accounts for its operations inside the ECOZONE and shall submit financial
and other reports/ documents to PEZA on or before their respective due
dates…”

2. General Circular No. 84-001 Dated January 2, 1984

“The herein guidelines shall apply to all PEZA-registered enterprises

for operation in its various regular EPZs and industrial areas designated
as special EPZs pursuant to Executive Order No. 567.”

“All PEZA enterprises in the zones shall submit to the Authority the
following annual and quarterly reports as herein prescribed…”

“The enterprise shall submit the following reports to the Authority’s

Enterprise Regulations Department – Enterprise Services Division on or before
their respective due dates…”
PEZA REPORTORIAL REQUIREMENTS
(non-compliance is subject to penalties under PEZA IRR)

TYPES OF REPORT DUE DATE

- Economic Zone Monthly Performance Report

(EZMPR) - Every 20th day of the following month

* Annual Report - 90 Days after the end of the accounting period

* Audited Financial Statement (AFS) - 30 Days after filing with BIR

* Quarterly Income Tax Returns - 15 Days after filing with BIR

(Including copy of O.R. of payment of 3% of the 5%
GIT to the BIR and the O.R. of payment of 2% of the
5% GIT to the LGU)

* Annual Income Tax Return (ITR) - 30 Days after filing with BIR
(Including copy of O.R. of payment of 3% of the 5%
GIT to the BIR and the O.R. of payment of 2% of the
5% GIT to the LGU)

+ Breakdown/ Schedule of - Together with the AFS & Annual ITR

Sales per Activity

+ Breakdown/ Schedule of - Together with the AFS & Annual ITR

Other Income

+ Data on Revenues and - Together with the AFS & Annual ITR
Taxes Paid

▪ COA Annual Audit Report - After the end of the year Audit Certificate

Notice of Start of Commercial - 7 Days after the said date

Operations

Replacement of any Board of - 30 Days after the said change

Director/ Member or Officer

Amendment of the Articles of - 30 Days after registering with SEC

Incorporation or By-Laws
 Change of Corporate Name & - 30 Days after the said change
Equity Ownership

PEZA report forms can be accessed and downloaded from our website: www.peza.gov.ph

For inquiries regarding these reports, please call our Tel. no. 556-6992 loc.423/424 or email us at
esd@peza.gov.ph (Enterprise Services Division)

* For Locator and Developer/ Operator Enterprises

+ Per MOA of PEZA and BIR
▪ For Developer/ Operator owned by the Government
- For Locator enterprises except Facilities and Utilities enterprises

PART XI OTHER PROVISIONS

Rule XXV – Miscellaneous and Transitory Provisions

Section 8. Penalties. -
ADMINISTRATIVE FINES – The following schedule of fines and/or administrative
sanctions shall apply to all ECOZONE Enterprises and/or to any person or group of
persons who have committed violations of these Rules and pertinent
circulars/memoranda issued hereunder:

For late filing of financial statements, income tax returns, performance reports,
annual reports and all other reports/documents as specifically enumerated under
Section 4 Rule XXI or required under existing circulars of the PEZA:

Basic Fine Daily Fine

1st Violation P 500.00 P 50.00
2nd Violation 1,000.00 150.00
3rd Violation 2,000.00 200.00