Is BOI better than PEZA?
TL;DR: BOI vs. PEZA
If you’re torn between BOI and PEZA for your business in the Philippines, the answer depends on your operations, location, and expansion plans. PEZA is ideal for export-oriented businesses inside special zones, while BOI supports priority industries nationwide. Both offer tax holidays and investment perks, but your choice should align with your long-term goals.
Is BOI Better than PEZA? A Clear Comparison for Businesses
When expanding or establishing a business in the Philippines, one of the most important decisions you will face is whether to register with the Board of Investments (BOI) or the Philippine Economic Zone Authority (PEZA). Both are key investment promotion agencies in the Philippines, but they cater to different business needs and have varying eligibility criteria.
So, is BOI better than PEZA? Let’s break it down.
Understanding BOI and PEZA
Before comparing the benefits, it’s important to understand the difference between BOI and PEZA in the Philippines.
BOI (Board of Investments)
- Supports businesses that fall under the Philippine Investment Priorities Plan (IPP)
- Offers nationwide incentives
- Ideal for businesses that are not located in economic zones
PEZA (Philippine Economic Zone Authority)
- Caters mainly to export-oriented companies
- Requires location within a PEZA-accredited economic zone or IT park
- Offers tax perks for companies serving international markets
This is the fundamental difference between BOI and PEZA in the Philippines: BOI is more flexible with location and industry, while PEZA is more structured and zone-based.
BOI vs PEZA: Tax Incentives and Perks
BOI Incentives
- Income Tax Holiday (ITH) for 4 to 6 years
- Exemption from import duties on capital equipment
- Simplified customs procedures
- Employment of foreign nationals in supervisory, technical, or advisory positions
PEZA Incentives
- ITH for 4 to 6 years
- 5% Special Corporate Income Tax (SCIT) in lieu of all national and local taxes (after ITH)
- Zero-rated VAT on local purchases
- Duty-free importation of capital equipment and raw materials
If you’re comparing BOI vs PEZA tax incentives, note that PEZA’s 5% SCIT is a huge draw for many.
Which Is Better for Tax Incentives?
PEZA is often considered more attractive for tax incentives, especially for businesses that rely on importing/exporting. The PEZA vs BOI tax incentives debate hinges on how centralized and simplified PEZA’s taxation model is.
However, BOI incentives are still highly beneficial, particularly for domestic enterprises or companies not tied to specific economic zones.
BOI vs PEZA Registration Process
PEZA Registration Process
- Must be located in a PEZA-accredited economic zone
- Submit application to PEZA with the zone endorsement
- Attend board evaluation and approval
- Sign a registration agreement
BOI Registration Process
- Submit the project plan and documents under IPP
- Evaluation by BOI
- Attend the board presentation
- Receive Certificate of Registration
When comparing PEZA vs BOI which is easier, BOI tends to have a more straightforward process, especially if you’re not tied to specific zones.
BOI or PEZA for Foreign Investors?
Both BOI and PEZA welcome foreign ownership under certain conditions. However:
- BOI is often preferred by foreign investors in priority sectors like renewable energy, manufacturing, and infrastructure.
- PEZA is more suitable for export-oriented BPOs, IT firms, and manufacturers within ecozones.
So, if you’re wondering BOI or PEZA for foreign investors, it really depends on whether your market is local or global.
BOI vs PEZA for IT Companies
If you’re in tech or outsourcing, the PEZA vs BOI for IT companies comparison is crucial.
- PEZA is generally better for BPOs and IT firms due to economic zone perks and tax treatments.
- BOI is a viable option for IT firms with a domestic focus or those located outside of PEZA zones.
Can a Business Register with Both BOI and PEZA?
No, you can’t register the same project with both BOI and PEZA. However, companies with multiple projects or entities can register separate operations under each agency.
Pros and Cons of BOI and PEZA
BOI Pros
- Greater location flexibility
- Encourages local industry growth
- Easier for domestic companies
BOI Cons
- Limited to IPP sectors
- Less simplified post-ITH tax regime
PEZA Pros
- Excellent for exporters
- Tax efficiency with SCIT
- Well-established ecosystem in ecozones
PEZA Cons
- Requires an ecozone location
- Zone availability may limit options
How to Decide Between BOI and PEZA
Here are some guiding questions:
- Are you export-oriented? → PEZA is likely better.
- Are you a domestic business? → BOI may be your route.
- Is your office outside a PEZA zone? → Consider BOI.
- Do you want simplified taxation? → PEZA’s SCIT is attractive.
- Do you qualify under the IPP? → Then BOI registration is possible.
This analysis helps you weigh the tax incentives for businesses in the Philippines and choose the right investment promotion agency.
FAQs: BOI vs PEZA
What is the difference between BOI and PEZA?
BOI supports domestic and priority industries across the country, while PEZA promotes export-oriented businesses within ecozones.
Is BOI better than PEZA for tax incentives?
PEZA is often considered better due to its 5% SCIT scheme, but BOI also offers strong perks under the IPP.
Which agency offers more benefits: BOI or PEZA?
It depends on your business type and location. PEZA is great for exporters in zones; BOI works for nationwide priorities.
Can foreign companies register with BOI or PEZA?
Yes. Foreign companies can register with either, depending on qualifications and market focus.
What types of businesses are eligible for BOI registration?
Priority sectors under the IPP: manufacturing, green energy, infrastructure, tech, healthcare, etc.
What types of businesses qualify for PEZA?
Export-oriented manufacturing, IT-BPM, logistics, and other service providers are located in ecozones.
Which is easier: BOI or PEZA registration?
BOI is typically easier for businesses not located in ecozones.
How long does it take to register with BOI or PEZA?
Both take around 1 to 3 months, depending on project complexity and documentation.
Can a business register with both BOI and PEZA?
Not for the same project, but different projects or legal entities can be registered separately.
Do BOI and PEZA offer the same tax holidays?
Both offer 4 to 6 years ITH, but post-ITH benefits differ.
Is PEZA better than BOI for BPO or IT companies?
Yes, especially for export-oriented firms in ecozones.
What are the disadvantages of BOI vs PEZA?
BOI has fewer location restrictions but may lack PEZA’s streamlined tax perks.
Do both BOI and PEZA offer income tax holidays (ITH)?
Yes, both offer 4 to 6 years of ITH for eligible projects.
How do I decide between BOI and PEZA for my business?
Assess your location, industry, export percentage, and tax priorities.
Final Thoughts
There’s no one-size-fits-all answer to the BOI vs PEZA debate. It’s not just about asking “Is BOI better than PEZA?”, but rather, which one aligns with your growth strategy. Whether you need location flexibility or simplified taxation, choosing the right agency can make a huge impact on your business’s success in the Philippines.
If you’re unsure, consult a local business advisor or incentives specialist to help navigate the BOI vs PEZA registration process. It could save you time, money, and future headaches.