PEZA vs. BoI Registration in the Philippines

REQUIREMENTS

Physical Location:
Companies are required to relocate operations inside a PEZA IT Zone or PEZA building

Eligibility:
Any new or existing firm is eligible for PEZA benefits, as long as it closes all operations outside PEZA zones and relocates inside a PEZA designated location

Documentation

• Project brief- entails the submission of additional documents to confirm the statements made therein
• Anti-graft certificate
• Board Resolution Authorizing the designation of a representative
• SEC Certificate of Registration
• Project feasibility study- includes reference documents and other information used for the study
  

Filing Fee

Application Fee

• Application of New Project (Non-Pioneer)........P3,600.00
• Application of New Project (Pioneer)...............P6,000.00

Registration Fee

• Registration of New Projects.....P6,000.00

Export Commitment

• There are no export commitments for registrable IT services
• For Filipino citizens, at least 50% of total services must be exported
• For foreigners, at least 70% of total services must be exported

REQUIREMENTS

Physical Location:
Companies are not required to relocate to a designated zone

Eligibility:
Any new or existing firm is eligible for BoI benefits

Documentation:

• (3) copies of BOI application Form 501
• (3) copies of project report and supporting documents

Filing Fee

Application for registration

• Project costs not exceeding P4 million..........P1,000.00
• Project costs exceeding P4 million (but not over P20 million).........P2,000.00
• Project costs exceeding P20 million (but not over P50 million)...P3,000.00
• Project costs exceeding P50 million..........P4,000.00
  

Export Commitment:

• For Filipino citizens, there is no export commitment
• For more than 40% foreign-owned companies, at least 70% of total services must be exported
• For firms that engage in pioneer activities, 100% of activities may be invested in domestic markets provided that the firm complies with requirements under the Foreign Investments Act (FIA). [paid-up capital of at least USD 200,000 w/c may be lowered to USD 100,000 for projects that involve advanced technology as determined by the Dept. of Science and Technology and hire at least (50) direct employees]

TAX INCENTIVES

• Offshore profit remittances, not subject to remittance tax;
• Income Tax Holiday for four (4) years for Non-Pioneer IT Enterprises, or six (6) years for Pioneer IT Enterprises;
• After the ITH period, the option to pay a special 5% tax on gross income earned, in lieu of all national and local taxes, except real property taxes on land owned by developers;
• Exemption from payment of import duties and taxes on imported machinery and equipment and raw materials;
• Additional deduction equivalent to 50% of training expenses, chargeable against the 3% share of the national government in the special 5% tax on gross income;
• Permanent resident status for foreign investors with initial investments of US$ 150,000.00 or more;
• Special tax rate of 5% of gross income (measured as sales less direct costs) in lieu of all Philippine taxes after the ITH;
• Exemption from Branch Profit Remittance tax for PEZA-registered branches of foreign corporations; and
• Other incentives, as determined by the PEZA Board.

TAX INCENTIVES

• Three (3) to Eight (8) year income tax holidays;
• Four (4) to Six (6) year exemption from local business taxes for pioneer and non-pioneer industries;
• Exemption from Taxes and Duties on Imported Spare Parts
• Exemption from Wharf Dues and Export Tax, Duty, Impost and Fees
• Tax Exemption on Breeding Stocks and Genetic Materials
• Tax Credits
• Additional Deductions from Taxable Income

INDUSTRIES SUPPORTED

• Software Development and Application: including programming and development of system software for business, media, e-commerce, education, entertainment and many others
• IT-enabled Services: Call centers, Data Encoding, Transcribing and Processing, Directories, etc.
• Content Development for the Internet and other forms of media
• Knowledge Based and Computer Enabled Support Services: Engineering, Architectural design services, and Consultancies
• Business Process Outsourcing (BPO)
• IT research
• other IT-related services

INDUSTRIES SUPPORTED

• ICT Services: software development, computer graphics, animation
• ICT-enabled Services: business that can be delivered through the use ICT infrastructure [call centers, contact centers, legal transcription, medical transcription, engineering, design, back-office operations, business process outsourcing]
• ICT-support Services: business that supports the development of ICT Services [R&D Centers, Incubation Centers, Educational/Training Institutions, Community Access Facilities, Internet Service Providers]

REGISTRATION PROCEDURE

• PEZA application is submitted
• PEZA application is evaluated
• Application is presented and reviewed before the PEZA board

Turnaround Time: depends on the availability of the PEZA board

REGISTRATION PROCEDURE

• Submission of BoI application
• Project Outline
• Feasibility Report
• Five year Financial Plan
  

Turnaround Time: 5-21 days