Many businesses celebrate once they receive their PEZA approval—and rightly so. But from a legal standpoint, this is the moment I give clients a gentle warning:
PEZA approval is not the finish line. It is the start of continuous compliance.
As a lawyer handling PEZA-registered companies, I can say this clearly: most PEZA problems happen after approval, not during application.
This guide explains what happens after PEZA approval, what PEZA expects from registered companies, and how to stay compliant without disrupting operations.
What Does PEZA Approval Really Mean?
Once approved, your business becomes a PEZA-registered enterprise (locator) under the supervision of the Philippine Economic Zone Authority (PEZA).
This gives you:
Access to tax and non-tax incentives
Authority to operate inside a PEZA-accredited zone
Eligibility for simplified government transactions
📌 But incentives come with obligations—and PEZA monitors them closely.
First Obligations After PEZA Approval
1. Register With BIR Under PEZA Status
After approval, your company must:
Register with the BIR as a PEZA-registered entity
Secure books of accounts and official receipts
Reflect PEZA incentives properly in tax filings
📌 PEZA does not replace BIR—both must be complied with.
2. Activate Operations According to Your Approved Project
PEZA expects you to:
Operate strictly within your approved business activity
Follow your declared export or service model
Meet your committed start-of-operations timeline
📌 Deviation without approval can trigger compliance issues.
Ongoing PEZA Compliance Requirements
1. Regular Reports and Submissions
PEZA requires periodic submission of:
Operational reports
Employment reports
Export or revenue reports
Financial summaries
📌 Late or inaccurate reporting is one of the most common violations.
2. Compliance With Employment and Investment Commitments
Your PEZA approval is based on:
Promised number of employees
Declared capital investment
PEZA monitors whether:
✔ Hiring targets are met
✔ Investment commitments are honored
📌 Significant deviations must be reported and justified.
3. Compliance With Zone Rules and Inspections
PEZA conducts:
Regular inspections
Compliance checks
Audit coordination
Companies must:
Maintain proper records
Allow PEZA access when required
Correct issues promptly
📌 Non-cooperation raises red flags.
4. Strict Use of Incentives
PEZA incentives must be used only for approved activities.
🚫 Misuse of VAT zero-rating
🚫 Unauthorized duty-free imports
🚫 Non-PEZA-approved transactions
📌 Improper use of incentives can result in penalties or revocation.
Immigration and Foreign Employee Compliance
If employing foreign nationals:
Work visas and permits must align with PEZA rules
Reporting to PEZA and immigration authorities is required
📌 PEZA closely coordinates with immigration agencies.
Common Post-Approval Mistakes
🚫 Treating PEZA approval as “permanent”
🚫 Ignoring reporting deadlines
🚫 Operating beyond approved scope
🚫 Poor internal compliance systems
🚫 Assuming penalties are “lenient”
📌 PEZA incentives can be suspended or cancelled.
What Happens If You Fail to Comply?
Depending on severity, PEZA may:
Issue warnings or notices
Suspend incentives
Require corrective action plans
Cancel PEZA registration
📌 Loss of incentives can significantly affect profitability.
Lawyer’s Advice: How to Stay PEZA-Compliant
✔ Assign a compliance officer or team
✔ Maintain accurate records
✔ Calendar reporting deadlines
✔ Seek approval before changes in operations
✔ Conduct regular internal compliance reviews
📌 Compliance is easier when it is planned—not reactive.
Final Thoughts
PEZA registration is a privilege with ongoing responsibility.
📌 Approval gives you incentives. Compliance keeps them.
For PEZA-registered companies, long-term success depends not only on business performance—but on disciplined, consistent compliance with PEZA rules.
If you treat PEZA registration as a long-term partnership with government, the incentives can support your growth for years to come.
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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