For business owners and investors in Region 7 (Central Visayas)—especially in Cebu, Bohol, Negros Oriental, and Siquijor—government incentives can make a world of difference. Whether you’re setting up a manufacturing plant, IT firm, or export company, two key government agencies often come into play: the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA).
Both agencies offer tax incentives and legal benefits designed to stimulate business growth. But here’s the critical question: Which one is better for Region 7 investors?
Let’s break it down from a legal and practical perspective.
Understanding BOI and PEZA
🏛️ The Board of Investments (BOI)
The BOI operates under the Department of Trade and Industry (DTI) and implements the Omnibus Investments Code of 1987 (Executive Order No. 226) and the CREATE Act (Republic Act No. 11534).
It grants fiscal and non-fiscal incentives to enterprises that engage in activities listed in the Strategic Investment Priority Plan (SIPP)—the government’s master list of preferred industries.
Key features of BOI registration:
Available nationwide, not limited to economic zones
Filipino-owned or foreign-owned businesses may qualify depending on the project
Incentives include Income Tax Holidays (ITH), duty-free importation, VAT zero-rating, and enhanced deductions
🏢 The Philippine Economic Zone Authority (PEZA)
PEZA, on the other hand, is a government agency attached to the DTI that manages designated ecozones across the Philippines.
It grants incentives to export-oriented companies operating within PEZA-registered areas such as Mactan Economic Zone (MEZ) in Cebu, one of the country’s most developed industrial hubs.
Key features of PEZA registration:
Only for businesses located inside PEZA zones
Focused on export and IT/BPO operations
Incentives include 4–7 years of ITH, 5% special tax on gross income (GIT) in lieu of all local and national taxes, VAT zero-rating, and customs privileges
Comparing Incentives and Legal Advantages
| Aspect | BOI Registration | PEZA Registration |
|---|---|---|
| Location Flexibility | Anywhere in the Philippines | Must be inside a PEZA zone |
| Target Businesses | Priority industries (manufacturing, energy, innovation, etc.) | Exporters, IT-BPM, manufacturers |
| Ownership Rules | Up to 100% foreign ownership (depending on SIPP) | Up to 100% for export-oriented firms |
| Tax Incentives | ITH + enhanced deductions under CREATE | ITH + 5% GIT regime |
| Administrative Supervision | BOI under DTI | PEZA under DTI but with autonomous zone management |
| Local Government Taxes | Subject to local taxes | Exempt from all national and local taxes (replaced by 5% GIT) |
| Ideal For | Businesses expanding outside ecozones or catering to domestic markets | Export-oriented firms and IT parks |
Legal and Practical Considerations for Region 7 Investors
1. If You’re Export-Oriented — PEZA May Be Ideal
Cebu’s Mactan Economic Zone offers world-class infrastructure, streamlined customs procedures, and on-site government offices for faster processing.
PEZA registration is especially advantageous for manufacturing and IT-BPM companies that export at least 70% of their production.
However, note that PEZA registration requires physical presence inside the ecozone, and space availability may be limited.
2. If You Want Flexibility — BOI Is Better
If your business caters to both domestic and international markets, BOI registration offers greater flexibility.
You can locate anywhere in Region 7—in Cebu City, Bohol, or Dumaguete—and still enjoy fiscal incentives, provided your business activity is listed in the SIPP.
BOI also supports strategic sectors such as renewable energy, logistics, agribusiness, and digital innovation—industries that are vital for sustainable growth in Central Visayas.
3. Legal Compliance and Ease of Registration
Both BOI and PEZA have established legal frameworks ensuring investor protection, but their compliance obligations differ:
PEZA firms undergo ecozone monitoring and reporting, including export documentation.
BOI-registered enterprises comply with annual reporting and performance commitments based on the approved project.
From a lawyer’s standpoint, it’s crucial to assess your business model, export ratio, and location preference before registration to avoid legal complications later on.
Which Is Better for Region 7?
There is no one-size-fits-all answer.
For export-driven manufacturers or BPO firms, PEZA offers unparalleled tax advantages and logistical support.
For domestic-oriented businesses, or those outside ecozones, BOI provides the better option under the CREATE law.
For hybrid businesses, legal consultation is key to determining which registration will yield the most favorable incentive mix.
📜 Legal Tip: Always consult a business lawyer or a registered BOI/PEZA consultant before filing. A professional can help you interpret eligibility clauses under Section 17 of E.O. 226 or Rule 5 of the PEZA IRR, ensuring you comply with all legal prerequisites.
Final Thoughts
For Region 7 investors, both BOI and PEZA are gateways to tax efficiency, legal protection, and long-term competitiveness.
The choice depends on your business nature, market reach, and operational needs.
Whether you’re setting up a Cebu-based export hub or expanding a domestic enterprise, aligning your registration with the proper investment authority ensures that your business grows legally, efficiently, and sustainably.
If you need assistance in registering your business with BOI or PEZA in Region 7, consult CBOS Business Solutions Inc. — your trusted partner in legal compliance, registration, and tax advisory for Cebu-based enterprises.
Navigating the business landscape in the Philippines can be both rewarding and intricate. Whether you’re embarking on a new venture or scaling up, ensuring that your corporate endeavors are in line with local regulations is paramount.
At CBOS Business Solutions Inc., we pride ourselves on simplifying these processes for our clients. As a seasoned professional services company, we offer comprehensive assistance with SEC Registration, Visa processing, and a myriad of other essential business requirements. Our team of experts is dedicated to ensuring that your business is compliant, well-established, and ready to thrive in the Philippine market.
Why venture into the complexities of business registration and compliance alone? Allow our team to guide you every step of the way. After all, your success is our commitment.
Get in touch today and let us be your partner in achieving your business goals in the Philippines.
Email Address: gerald.bernardo@cbos.com.ph
Mobile No.: +639270032851
You can also click this link to schedule a meeting.
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