PEZA registration is often seen as a badge of advantage—tax incentives, streamlined government processes, and investor-friendly rules. But from a legal standpoint, one thing must be clear:
Not every business qualifies for PEZA registration.
As a lawyer assisting companies with PEZA applications, I frequently encounter businesses that want PEZA incentives but do not actually meet the qualifications. This guide explains who is qualified for PEZA registration in the Philippines, and just as importantly, who is not.
What Is PEZA and Why Qualification Matters
The Philippine Economic Zone Authority (PEZA) is a government agency tasked with promoting investments through economic zones by granting fiscal and non-fiscal incentives.
Because these incentives are substantial, PEZA strictly screens applicants. Qualification depends on:
Nature of business
Location
Ownership structure
Compliance capacity
📌 PEZA registration is a privilege—not an automatic right.
Businesses Commonly Qualified for PEZA Registration
1. Export Manufacturing Companies
Export manufacturers are among the primary beneficiaries of PEZA.
✔ At least 70% of output is for export
✔ Engaged in manufacturing, assembly, or processing
✔ Operates within a PEZA-accredited economic zone
📌 This includes electronics, garments, automotive parts, and similar industries.
2. IT-BPM and Digital Service Companies
PEZA strongly supports IT and technology-driven businesses, including:
IT-BPM / BPO companies
Software development firms
Shared services and back-office operations
Digital design, engineering, and R&D
📌 Many PEZA-registered IT companies earn primarily from foreign clients.
3. Export-Oriented Service Enterprises
Service providers may qualify if their income is derived mainly from overseas clients, such as:
Accounting and finance outsourcing
Engineering and architectural services
Creative and digital services
📌 Export of services is treated similarly to export of goods under PEZA rules.
4. Logistics, Warehousing, and Support Services
Certain logistics and warehousing companies qualify if they:
Serve PEZA-registered enterprises
Support export-related activities
Operate within or directly support an economic zone
📌 Purely domestic logistics businesses usually do not qualify.
5. Economic Zone Developers and Facilities Providers
PEZA also accredits:
Ecozone developers
Building owners and facility operators
IT parks and industrial estates
📌 These entities enable other PEZA locators to operate.
Location Requirement: A Critical Qualification
To qualify, a business must:
✔ Be physically located inside a PEZA-accredited economic zone, or
✔ Operate in a PEZA-registered IT park or building
📌 Virtual offices or purely home-based setups generally do not qualify for PEZA.
Ownership: Can Foreign-Owned Companies Qualify?
Yes. In fact, PEZA is very foreign-investor friendly.
✔ 100% foreign ownership is generally allowed
✔ Subject to Foreign Investment Negative List (FINL) rules
✔ Compliance with capitalization and reporting requirements is mandatory
📌 Many PEZA locators are wholly foreign-owned.
Capital and Employment Considerations
PEZA evaluates:
Minimum investment or capitalization
Projected employment
Economic contribution
📌 Startups and SMEs may qualify, but must meet PEZA’s minimum thresholds.
Who Is Usually NOT Qualified for PEZA Registration?
🚫 Businesses serving purely local/domestic markets
🚫 Retail and trading businesses
🚫 Restaurants and consumer-facing shops
🚫 Freelancers or individuals without a corporate structure
🚫 Businesses outside PEZA-accredited locations
📌 These businesses may still operate legally—but without PEZA incentives.
Legal Prerequisites Before Applying to PEZA
Before PEZA application, a business must already have:
SEC registration (Corporation or OPC)
Clear business purpose aligned with PEZA activity
Capability to comply with PEZA reporting and audit rules
📌 PEZA registration builds on SEC and BIR compliance—it does not replace them.
Final Thoughts
PEZA registration is ideal for the right type of business—export-oriented, technology-driven, and investment-ready.
📌 Qualification is based on substance, not intention.
Before applying, businesses should carefully assess whether their operations, location, and revenue model align with PEZA’s mandate. When properly qualified and structured, PEZA registration can unlock powerful incentives and long-term advantages.
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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