The Philippine Economic Zone Authority or PEZA encourages investments in export-oriented industries by offering incentives to qualified businesses who choose to operate within the PEZA Special Economic Zones (ecozones).
Businesses operating within PEZA ecozones are afforded a slew of tax incentives, along with perks like easier import/export and foreign exchange processes, and less stringent requirements in hiring foreign employees.
Who may qualify for PEZA incentives?
Only certain activities are allowed within the PEZA ecozones. These are:
· Export manufacturing
· Information Technology (IT) service export
· Medical tourism
· Agro-industrial export manufacturing
· Agro-industrial bio-fuel manufacturing
· Logistics and warehousing services
· Economic Zone Development and Operation
· Facilities providers
Before a business can start operating within an ecozone, it must first comply with PEZA registration requirements.
PEZA Registration Requirements
Registration requirements vary according to the type of activity to be carried out. Medical tourism, tourism, and agro-industrial operations, for example, need to get an endorsement from relevant government agencies, such as the Department of Health, Department of Tourism, and Department of Agriculture.
A minimum paid-up capital is also required for certain activity types. Documentation requirements for registration also vary by activity type.
Registration Requirements for IT Service Export Companies
IT service export companies, including BPO (business process outsourcing), KPO (knowledge process outsourcing) and ITES (information technology-enabled services) companies make up the largest bulk of businesses operating within PEZA ecozones.
For an IT service export company to be eligible for PEZA incentives, the following requirements must be submitted (info taken from the PEZA website):
Application Form (notarized)
Corporate Profile (including that of parent company, if applicable) which should include:
Brief company history
Existing or proposed business activities and projects
List of affiliated companies registered with PEZA
List of affiliated companies registered with the Board of Investments (BOI) and copies of the Certificates of Registration with Terms and Conditions and annual reports submitted, if applicable
Principal officers and biodata
Audited Financial Statements (for the last 3 years for existing companies)
Certificate of Registration with SEC and updated Articles of Incorporation
Board Resolution authorizing the filing of application with PEZA and designating the representative(s) authorized to transact registration with PEZA
Project Brief (i.e., Information on Market, Technical, Financial and Management aspects of the project to be registered)
IT Parks and Buildings
PEZA also offers incentives to registered IT parks and buildings which host PEZA-registered IT service export companies. These structures may be built within or outside Metro Manila.
Eligibility requirements for PEZA incentives, both within and outside Metro Manila, include:
A minimum floor area of 5,000 square meters for facilities within Metro Manila, and five hectares for facilities outside Metro Manila
Minimum facilities as follows:
- High-speed fiber-optic telecommunication backbone and high-speed international gateway facility or wide-area network (WAN); or any high speed data telecommunication system that may become available in the future.
- Clean, uninterrupted power supply
- Computer security and building monitoring and maintenance systems (e.g. computer firewalls, encryption technology, fluctuation controls, etc.)
Application to be a PEZA-registered IT park or building is three-fold.
· It first has to go through consideration by the PEZA board.
· The PEZA board then endorses the application to the Office of the President for the issuance of a Presidential Proclamation
· Once the Presidential Proclamation is obtained, the PEZA Registration Agreement may be signed
Several documents are required in each of the three stages mentioned above. Some of these documents are as follows:
· Application Form (notarized)
· Anti-Graft Certificate (notarized)
SEC Registration Certificate and updated Articles of Incorporation;
Board Resolution authorizing the filing of application with PEZA and designating the representative(s) authorized to transact registration with PEZA;
Audited Financial Statements (for the last three (3) years of operation, for existing companies)
IT Park / Building Project Description and / or Feasibility Study, which should provide, among others, information on the financial capability of the proponent, present and proposed land use of the area for the IT Park / Building, and development plan and schedule for the proposed IT Park/Building;
Other documentation requirements may be found on the PEZA website.