Nothing Beats Paying Zilch in Taxes with PEZA or BOI Accreditation

So you’ve decided to set up shop in the Philippines. Your timing couldn’t be better – not only is the country’s economy currently one of the region’s fastest growing, more government incentives are now in place as well. By registering your business with the BOI (Board of Investments) or PEZA (Philippine Economic Zone Authority), you can enjoy tax holidays, credits and exemptions as well as a slew of other fiscal and non-fiscal incentives.

The main function of both government agencies is to attract investors and foster the growth of enterprises. They have similar yet distinct sets of incentives offered and they have different requirements as well. We will help you determine which one will be the better fit for your business. Read on for a brief overview of what you can expect:

BOI or PEZA?
  • The primary difference between PEZA and BOI is that the former requires companies to be located in a PEZA designated zone or building. The latter has no location requirements.

  • Businesses registered with PEZA as Pioneer Enterprises benefit from a 6-year Income Tax Holiday (4 for Non-Pioneers). The BOI offers the same Income Tax exemptions – 6 years for Pioneer projects or those that are located in Less Developed Areas (LDAs) and 4 years for Non-Pioneer ones.

  • PEZA has a special 5% tax rate on gross income after the end of the Income Tax Holiday period. The BOI also offers additional deductions from taxable income.

  • Both PEZA and the BOI also have export commitments – for the former, at least 70% of a company’s production must be for export (50% if the company is Filipino). For the latter, if a company is more than 40% foreign-owned then it has a 70% export commitment as well.

Other Advantages

Apart from the financial benefits, there are also quite a few other advantages that come with being registered. These include permanent residency for foreign investors whose initial investment is at least $150,000; simplification of customs procedures; smoother visa processing for foreign employees; and more.

Would you like to learn more about the other advantages of a PEZA or BOI registration? Schedule a consultation with us at FilePino today. We provide seamless concierge service at a flat price and we look forward to helping you build your business in the Philippines.