For foreign investors eyeing manufacturing in Lapu-Lapu City or IT-BPO scaling in Davao, timing and export quotas dictate when capital can be deployed.
1. How Long Does PEZA Registration Take?
Once a complete application is submitted to the PEZA board, the approval process generally takes 30 to 60 days. Under recent ease-of-doing-business initiatives and the CREATE MORE Act, processing timelines for complete submissions under ₱15 Billion in capital are handled directly by the IPA to eliminate bureaucratic bottlenecks.
2. The 70% Export Threshold Requirement
To qualify as a Registered Export Enterprise (REE) under PEZA:
Foreign-Owned Entities: Must generate at least 70% of total gross revenue from direct foreign exports or export-service sales to other qualified ecozone entities.
Filipino-Owned Entities: Can qualify with a minimum 60% export sales threshold.
Total Annual Revenue
┌───────────────────────────────────────────┐
│ 70%+ Direct/Indirect Export Sales (PEZA) │ ──► Tax Incentives Apply
├───────────────────────────────────────────┤
│ Max 30% Domestic Market Sales │ ──► Subject to Standard Local Taxes
└───────────────────────────────────────────┘
What If You Exceed the 30% Domestic Cap?
If your sales to the local Philippine domestic market exceed 30% of your total output, your PEZA status may be penalized or downgraded, exposing that portion of revenue to full Corporate Income Tax (RCIT).
Key Takeaway: Build your financial projections around the 70% export rule from Day 1 to ensure seamless board approval and long-term compliance.
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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