PEZA

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PEZA Registration in the Philippines

Many foreign companies setting up export enterprises in the Philippines such as outsourcing and offshoring operations may opt to register with PEZA for tax incentives. K&C’s tax lawyers and accountants will assist in determining eligibility for PEZA registration¬†and organize all financial documents to be processed.

PEZA – Philippine Economic Zone Authority
Enterprises registered with the Philippine Economic Zone Authority (PEZA) may be entitled to income tax holidays of four, six, or eight years. After that, they are subject to 5% tax on gross income (sales less direct costs) in lieu of all local and national taxes. Enterprises that are registered with the Subic Bay Metropolitan Authority (SBMA) or Subic Bay Freeport Zone, which administers the economic zone established by the conversion of the former United States military base in Subic, are also subject to the special 5% tax and cannot avail of tax holidays. Qualified entities registered with the Clark Development Corporation and located in the Clark Freeport Zone are entitled to similar incentives.

To obtain tax breaks and incentives offered by PEZA, an enterprise must register with PEZA and locate their operation in one of the PEZA zones, buildings, IT Parks, or Technology Parks. PEZA registrants must generally be export-oriented. Enterprises located inside the zones are required to export 100% of their production. In some cases, PEZA may approve the sale of up to 30% of production in the domestic market. Full foreign ownership of a PEZA enterprise is allowed, provided they are not engaged in activities that appear on the Foreign Investment Negative List. PEZA approval and specific incentives granted are on a case by case basis. Applicants must supply an application for providing information on capital structure, nationality of investors, and a feasibility report in accordance with a PEZA-prescribed format. Applicants can expect a fast turn-around once the application is submitted.

Our Tax Lawyers will perform the following:

  • Determine eligibility for PEZA
  • Process all required documents for PEZA
  • Identify a PEZA building for you
  • Register your new company with PEZA

Documentary Requirements

  1. Project brief – the completion of the project brief entails the submission of additional documents relating to the statements made therein
  2. Anti-graft certificate
  3. Board Resolution authorizing the filing and designation of a representative
  4. SEC Certificate of Registration, Articles of Incorporation and By-Laws (if not yet available, submit draft of Articles of Incorporation)
  5. Project Feasibility Study – information and documents necessary in the preparation of the project feasibility study

General and Technical Data and Document Requirements

  • Parent company and product brochures
  • Description of the new project (include description and uses of the service)
  • Detailed organizational chart
  • Project timetable
  • Potential market, marketing costs, marketing program
  • Service process and flowchart
  • List of equipment, country of equipment origin, rated capacity, and corresponding costs
  • Materials, their sources and prices; supply contracts, if any; ratio of imported to local materials, if applicable
  • Area requirement, office lay-out
  • Equipment lay-out
  • Electricity and water requirements
  • Types and volume of wastes and waste disposal system
  • Bio-data of principal officers
  • Certificate of registration with the Securities and Exchange Commission; and
  • Articles of incorporation

Financial Data and Document Requirements

  • Number of employees, position and salary rates, training to be provided and length of training, classification of employees as to a) skilled, semi-skilled, and unskilled, b) direct, indirect, and administrative
  • Number of foreign experts to be hired, positions, salary rates, length of stay
  • Projected volume of sales, selling price, and unit of measure
  • Breakdown of other dollar costs (interest on loans, salaries of foreign personnel)
  • Number of workdays per year, number of shifts per day
  • Sources of financing (please indicate whether loans to be obtained are foreign-currency-denominated or not)
  • Latest audited financial statements, if any; and
  • Parent company’s latest volume and value of sales, net income, total assets, and number of total employees, if applicable