Tax incentives Options Available for Foreign Companies in the Philippines

Tax incentives Options Available for Foreign Companies in the Philippines

The Philippine government grants regulatory powers to agencies like the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BOI) to administer tax incentives to qualified enterprises. Foreign investors and enterprises can avail of tax incentives and other benefits under any investment laws in the Philippines. 


Among the most common tax incentives are administered by PEZA, BOI, CEZA, and TIEZA. The eligibility requirements for these agencies will vary depending on the type of business that foreign investors will engage in.


In forming businesses in the Philippines, there are certain tax incentives available for you. Some of these are discussed below.


Tax Incentive Options in the Philippines



Foreign enterprises engaged in export manufacturing, IT service export, tourism, and similar business activities, including logistics and warehousing services, economic zone development and operation, facilities providers, and utilities, are eligible to register their company with the Philippines Economic Zone Authority (PEZA), provided they set up their office in one of PEZA’s special economic zones (SEZs). Likewise, it must be classified as an export-oriented enterprise. 


PEZA-registered companies are entitled to tax exemptions and other benefits including but not limited to the following:


  • Income tax holiday (ITH) of four to seven years
  • Preferential final tax of five percent (5%) of gross income in lieu of all national and local taxes (after the ITH period) 
  • Tax and duty-free importation of capital equipment, spare parts, raw materials, and supplies, which are needed in the registered activity
  • Tax credits for exporters using local materials as inputs under RA 7844 or the Export Development Act of 1994
  • Value-added tax (VAT) rating on local purchases of goods and services, including land-based telecommunications, electric power, and water bills
  • Exemption from expanded withholding tax
  • Additional deduction for labor expenses
  • Employment of foreign nationals in supervisory, technical or advisory positions


PEZA Registration Requirements

The requirements for registering with PEZA are as follows. Note that some industries may require additional requirements for submission.


  • SEC Certificate of Registration 
  • Articles of Incorporation and By-Laws
  • Board Resolution of a duly authorized company representative/signatory
  • Project Brief
  • Anti-Graft Certificate
  • Project Feasibility Study



Foreign-owned enterprises engaged in export-oriented activities (70-100% export), including outsourcing and offshoring, can register with the BOI. Those engaging in other industries can also register with the BOI if their business activities are among the priority areas for the development of the government or included in BOI’s investment priorities plan (IPP). Additionally, foreign enterprises can be eligible for BOI incentives if they set up their office in one of the areas listed by BOI as Less Developed Areas (LDAs).


There are companies engaging in outsourcing/offshoring, staff leasing/augmentation, information technology – business process outsourcing (IT-BPO), knowledge process outsourcing (KPO), legal process outsourcing (LPO), contact/call center, or back-office.


Tax Incentives Offered by BOI  


  • ITH of 4 to 7 years (as provided under RA 11534)
  • duty exemption on imported capital equipment, spare parts, and accessories
  • exemption from wharfage dues and export, tax, duty, impost, and fees
  • tax credits on imported raw materials
  • tax and duty-free importation of consigned equipment
  • additional deduction for labor expenses
  • employment of foreign nationals in supervisory, technical, or advisory positions


BOI Registration Requirements

If eligible, foreign enterprises must submit the following to BOI to apply for incentives:


  • SEC Certificate of Registration
  • Articles of Incorporation and By-Laws
  • Audited financial statement (feasibility study that contains projected financial reports for the next 5 years)
  • Income tax return for the past 3 years (if applicable)
  • Board resolution of a duly authorized company representative/signatory
  • Project report (a report that contains activities listed or related to those listed in the IPP)



Foreign companies engaged in gaming, recreational, tourism-related business activities and sports and recreation-related activities can register their business with CEZA.


CEZA-registered enterprises are entitled to avail of tax incentives provided by PEZA, including zero-rating for articles admitted by CEZA under legal permit. Under Philippine laws, CEZA has the power to issue online gaming licenses to qualified enterprises.


CEZA Registration Requirements

In order to apply for a tax incentive with CEZA, the following requirements listed below are to be submitted:


  1. SEC Certificate of Registration
  2. Project Feasibility Study
  3. Articles of Incorporation and By-laws
  4. Economic Zone and Freeport
  5. Substantial evidence of intended enterprises’ physical location located within Cagayan Special Economic Zone and Freeport
  6. List of assets and other properties as applicable



Foreign enterprises engaged in tourism-related activities as but not limited to travel and tour agencies, restaurants, spas, theme parks, and galleries within the Tourism Enterprise Zone (TEZ) can register their business with TIEZA. The main purpose of their business must be to attract local and foreign tourists to travel to and in the Philippines.


TIEZA Registration Requirements

To be eligible, foreign-owned tourism enterprises must submit the following:


  • SEC Certificate of Registration
  • Articles of Incorporation and By-Laws
  • Company Profile
  • Board Resolution of a duly authorized company representative/signatory
  • Vicinity Map 
  • Proof of Land Ownership and/or Long-Term Lease Agreement/s for a period of not less than 25 years in the area of the proposed TEZ
  • Endorsement Letter from the National Historical Institute (NHI) in the case of Cultural and Heritage Tourism Zone, from the Department of Health (DOH) in the case of Health and Wellness Tourism Zone; or from the Philippine Retirement Authority (PRA) in the case of retirement villages/communities


In most circumstances, to avail of the Income Tax Holiday Incentive, it is best that your business is newly formed. As the incentives are provided to start-up businesses or those businesses that are in the infancy stage. 

Do you need help in forming your business?

We can assist you with the processing of your Tax Incentive for your business in the Philippines. Don’t hesitate to reach out to us through the following:


Landline: (02) 8478-5826

Mobile: 0917 892 2337

Email: [email protected]