Doing Business in the Philippines

Contact An Agent

Why the Philippines – Doing Business in RP
The IT and ITES sectors fall under the government’s Investment Priorities Plan, a list of promoted areas of investments issued annually by the Board of Investments. As such, investors in the local ICT industry enjoy fiscal incentives such as income tax holiday, exemption from taxes and duties on spare parts, exemption from wharfage dues and export tax, duty, impost and fees, and additional deductions from taxable income. The government’s investment policies likewise provide non-fiscal incentives to ICT investors, which include employment of foreign nationals in supervisory, technical or advisory positions, simplified customs procedures, and duty-free importation of consigned equipment.

The Philippine Economic Zone Authority (PEZA, www.peza.gov.ph) is a government corporation set up to oversee the promotion of world-class economic zones (ecozones) and the establishment of ready-to-occupy locations for foreign investments. The agency has put in place additional incentives for ecozone and IT investors, developers, and operators.

For ecozone developers and operators, the following incentives are available:
• Income tax holiday
• Incentives under the Build-Operate-Transfer Law (BOT Law), including government support for accessing Official Development Assistance and other sources of financing
• Provision of vital off-site infrastructure facilities
• 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
• Assistance in the promotion of economic zones to local and foreign locator enterprises
For ecozone and IT locators, the following incentives are offered:
• Income tax holiday or a four-year exemption from corporate income tax, extendable up to eight years, with the option to pay a special 5% tax on gross income, in lieu of all national and local taxes, after the tax holiday
• Exemption from duties and taxes on imported capital equipment, spare parts, supplies, raw materials
• Domestic sales allowance equivalent to 30% of total sales
• Exemption from wharfage dues and export taxes, imposts and fees
• Permanent resident status for foreign investors and immediate family members
• Employment of foreign nationals
• Simplified import and export procedures
• Other incentives under Executive Order 226 (Omnibus Investment Code of 1987), as may be determined by the PEZA Board.
(Source: “PEZA Incentives,” www.dti.gov.ph/contentment/9/60/65/206.jsp)

The Bureau of Investments (BOI, www.boi.gov.ph), an attached agency of the Department of Trade and Industry (DTI), is the lead government agency tasked to promote investments in the Philippines by assisting local and foreign investors to venture in appropriate and profitable areas of economic activities. The agency offers a separate range of incentives to ICT investors, which include the following:
• Income tax holiday
• Exemption from taxes and duties on imported spare parts
• Exemption from wharfage dues and export tax, duty, impost and fees
• Tax credits
• Additional deductions from taxable income
(Source: “BOI Incentives,” www.dti.gov.ph/contentment/9/60/65/69.jsp)

Detailed information on investment costs, including registration and tax rates, as well as tariff topics, are all available from the official website of the DTI (www.dti.gov.ph).

Makati Central Business District