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Investors may also register with the Philippine Economic Zone Authority (PEZA) to avail of incentives for activities that are conducted within PEZA Ecozones and PEZA-registered buildings.


To disperse industry and generate employment in non-urban areas, the government has established several Ecozones. An Ecozone or Special Economic Zone is a selected area with highly developed or which have the potential to be developed into agro-industrial, industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are fixed or delimited by Presidential Proclamations.


Enterprises that establish their businesses within an Ecozone may register with the PEZA as any of the following:

  1. Export Manufacturing Enterprise

    An Ecozone Manufacturing Enterprise is an entity engaged in the assembly, manufacturing or processing activities resulting in the exportation of at least 70% of its production. “Manufacturing or processing” is the process by which raw materials or semi-finished materials are converted into a new product through a change in their physical, mechanical, or electromagnetic characteristics and/or chemical properties. “Assembly” is the process by which semi-finished parts or materials are put together or combined to form a distinct product without substantially changing their physical or mechanical characteristics or electromagnetic and/or chemical properties.

  2. Information Technology (IT) Service Export Enterprise

    An IT Service Export Enterprise is a company operating or offering IT services, of which 70% of total revenues are derived from clients abroad. “IT Service Activities” are activities that involve the use of any IT software and/or system for value addition. Among the IT Service Activities eligible for incentives are IT-enabled services such as business process outsourcing, call centers, data encoding, transcribing, and processing; software development and application, including programming and adaptation of system software and middleware; content development for multimedia or Internet purposes; and others.

  3. Tourism Enterprise

  4. Medical Tourism Enterprise

  5. Agro-industrial Export Manufacturing Enterprise

  6. Agro-industrial Biofuel Manufacturing Enterprise

  7. Logistics and Warehousing Services Enterprise

  8. Economic Zone Development and Operation, such as:

    • Manufacturing Economic Zone

    • IT Park

    • Tourism Economic Zone

    • Medical Tourism Economic Zone

    • Agro-Industrial Economic Zone

    • Retirement Economic Zone

    • Facilities Providers, such as: 

    • Facilities for Manufacturing Enterprises

    • Facilities for IT Enterprises

    • Retirement Facilities

  9. Establishment, operation, and maintenance of light and power systems, and water supply and distribution systems inside Special Economic Zones.

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As a general rule, an Ecozone Enterprise (except a Logistics and Warehousing Services Enterprise, an Ecozone Developer and Operator, a Facilities Provider and an Ecozone Utilities Enterprise) is entitled to income tax holiday, which may have a duration of four years for new registered non-pioneer firms or six years for new registered pioneer firms. Expanding firms may be entitled to an income tax holiday of three years from the start of commercial operation of the expansion.

Upon expiry of the income tax holiday, an Ecozone Enterprise becomes entitled to a preferential rate of 5% of gross income in lieu of all national and local taxes.


Ecozone Enterprises (except Logistics and Warehousing Services Enterprises, Ecozone Developers and Operators, Facilities Providers, and Ecozone Utilities Enterprises) are further entitled to the following incentives:

  1. VAT zero rating of local purchases of goods and services1;

  2. Exemption from duties and taxes on importation of merchandise, raw materials, and supplies of equipment and machineries, including importation of capital equipment, construction materials, specialized office equipment and furniture, specialized vehicles and other transportation equipment, professional instruments, and household effects;

  3. Tax credit for import substitution;

  4. Exemption from wharfage dues, export tax, impost, or fee;

  5. Additional deduction for training expenses;

  6. Tax credit on domestic capital equipment, breeding stocks and genetic materials (as applicable);

  7. Additional deduction for labor expenses;

  8. Unrestricted use of consigned equipment;

  9. Employment of foreign nationals in executive, supervisory, technical and advisory positions, provided that the total number of foreign nationals employed by an Ecozone Enterprise does not at any time exceed 5% of its workforce.

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Registrable Activities
Tax and Other Incentives



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