Investment Incentives

Philippine Economic Zone Authority

PEZA incentives for Developers of Economic Zones include the following:

• Income Tax Holiday (ITH) or Exemption from Corporate Income Tax for four years;

• After the ITH, option to pay a special 5% Gross Income Tax, in lieu of all national and local taxes;

• Permanent resident status for foreign investors and immediate family members;

• Employment of foreign nationals;

• Incentives under the Build-Operate-Transfer Law; and

• Other incentives under Executive Order No. 226 (The Omnibus Investment Code of 1987 ), as may be determined by the PEZA Board

PEZA Incentives for Locator Companies such as export enterprises and I.T. companies are the following:

• Income Tax Holiday (ITH) or Exemption from Corporate Income Tax for four years, extendable to a maximum of eight years;

• After the ITH period, the option to pay a special 5% Tax on Gross Income, in lieu of all national and local taxes;

• Exemption from duties and taxes on imported capital equipment, spare parts, supplies, and raw materials.

• Domestic sales allowance of up to 30% of total sales;

• Exemption from wharfage dues and export taxes, imposts and fees;

• Additional deduction of 50% of the total cost of manpower training

• Permanent resident status for foreign investors and immediate family members;

• Employment of foreign nationals and dependents; and

• Other incentives under Executive Order 226 (Omnibus Investment Code of 1987), as may be determined by the PEZA Board.

Aside from these incentives, PEZA likewise registers 100% foreign-owned companies that are export-oriented companies.

· Board of Investments

The Board of Investments (BOI) is the lead agency of the government in the promotion of investment in the Philippines for high-priority projects catering to both the local and export markets. BOI’s mandate is spelled out in Executive Order No. (E.O.) No. 226, otherwise known as the Omnibus Investments Code 1987. Enterprises wishing to avail themselves of investment incentives under E.O. No. 226 need to register with the BOI.

Fiscal Incentives:

1. Income tax holiday. Newly registered pioneer projects are exempt from income taxes for six years from the start of commercial operations, and non-pioneer firms for four years from the start of commercial operations. The exemptions period may be extended for another year in each of the following cases:

-The project uses indigenous raw materials

-The project meets the BOI-prescribed ratio of capital equipment to number of workers

-The net foreign exchange savings or earnings amount to at least US$500,000 annually during the first three years of the project’s commercial operations.

Non-fiscal Incentives:
1. Simplification of customs procedures. Under E.O. 226, customs procedures for the importation of equipment, spare parts, raw materials and supplies, and the export of products by BOI-registered enterprises have been simplified by the Bureau of Customs (BOC).

2. Unrestricted use of consigned equipment. There are no restrictions on the use by BOI-registered enterprises of consigned equipment provided a re-export bond is posted. E.O. No. 226 provides further that if the consigned equipment and spare parts were imported tax- and duty-free, the re-export bond may be waived.

3. Employment of foreign nationals. Foreign nationals may be employed in supervisory, technical, or advisory positions within five years from a registered project’s registration, extendible for limited periods to be determined by the BOI. The positions of president, general manager, and treasurer of their equivalents, of foreign-owned registered firms may be retained by foreign nationals for a longer period.

· Local Government Units

Of the eleven (11) municipalities and one (1) city, Limay, Mariveles, and Dinalupihan do not have Investment Incentive Ordinance while the rest provide the following incentives to registered enterprises:

1. Exemption from payments of Mayor’s Permit, Building Permit, and other Licenses;

2. Exempted from paying Business Tax as provided for under Section 143 (a) Article 2, Book II R.A. 7160;

3. Based on guidelines as provided for in their respective Local Investment Incentives Code, exemptions from:

· Basic Real Property Tax

· Tax on Transfer of Real Property Ownership

· Franchise Tax

· Amusement Tax

· Other local taxes applicable



Related Links:


Bataan Provincial Investment Promotion Plan (2008-2010)
Strategic Location of the Province
Proximity & Accessibility
Water & Power Utilities
Agricultural Produce
Cost of Doing Business
Investment Areas
Investment Priority Areas

Posted in: Economic Zone,equipment,income tax,investment,LGU,manpower