TL;DR (Summary Box)

BOI and PEZA incentives in the Philippines provide tax breaks, exemptions, and business-friendly perks to encourage investments. BOI mainly supports local industries and priority projects, while PEZA focuses on export-oriented and IT enterprises. Both offer fiscal incentives (like tax holidays and duty exemptions) and non-fiscal perks (like streamlined permits and simplified processes). Choosing between the two depends on your business model: BOI suits companies serving the domestic market, while PEZA is ideal for exporters and foreign investors.

Introduction: Why BOI and PEZA Incentives Matter

When starting or expanding a business in the Philippines, one of the biggest questions is:

“What incentives do BOI and PEZA companies get in the Philippines?”

The government offers generous investment incentives in the Philippines through the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA). These agencies make it easier for companies—whether local startups or multinational corporations—to set up operations and remain competitive.

But here’s the challenge: many entrepreneurs are confused about which set of incentives applies to their business. Should you register with BOI? Or is PEZA better for your operations? This guide explains both clearly so you can decide with confidence.

BOI and PEZA Incentives in the Philippines: An Overview

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BOI and PEZA incentives in the Philippines exist to attract both local and foreign investments.

• BOI (Board of Investments): Focuses on priority industries that support national development (e.g., renewable energy, manufacturing, agribusiness).

• PEZA (Philippine Economic Zone Authority): Specializes in export-oriented enterprises and IT-enabled services, mostly located within economic zones.

Both agencies provide a mix of fiscal and non-fiscal incentives to reduce costs and ease compliance burdens.

Fiscal Incentives: Tax Holidays and Exemptions

BOI Incentives for Local Businesses

The tax incentives for BOI-registered companies are designed to strengthen industries serving the domestic market:

• Income Tax Holiday (ITH): Up to 4 years for new projects, extendable to 6 years for pioneer projects.

• Additional Deductions: Up to 100% of training expenses for employees.

• Exemption from Customs Duties: On importation of capital equipment, spare parts, and accessories.

PEZA Tax Perks and Exemptions

The PEZA benefits for foreign investors in the Philippines are especially attractive for exporters:

• Income Tax Holiday (ITH): 4 to 6 years, depending on the project.

• 5% Special Corporate Income Tax (SCIT): After the ITH, instead of the standard 25% CIT.

• Zero VAT on Local Purchases: Huge savings for exporters and IT service providers.

• Exemption from Customs Duties and Taxes: On imported machinery, raw materials, and equipment.

In short, BOI suits domestic-market businesses, while PEZA is ideal for export-focused enterprises.

Non-Fiscal Incentives: More Than Just Tax Savings

Both BOI and PEZA go beyond tax breaks, offering non-fiscal incentives that simplify operations.

• BOI Non-Fiscal Incentives:
  • Simplified customs procedures.

  • Employment of foreign nationals in supervisory, technical, or advisory positions.

  • Guarantee of protection against government competition in pioneer industries.

• PEZA Non-Fiscal Incentives:
  • Special visa privileges for foreign investors and workers.

  • Streamlined import/export processing inside ecozones.

  • Simplified business permits and registrations.

These fiscal and non-fiscal incentives in the Philippines make a big difference in reducing administrative headaches.

BOI vs PEZA Incentives Explained: Which One Is Better?

The classic question is: BOI vs PEZA incentives— which is better for businesses?

• Choose BOI if:
  • Your business caters mainly to the local market.

  • You’re part of an industry included in the government’s Investment Priorities Plan (IPP).

  • You want flexibility in location.

• Choose PEZA if:
  • Your company exports at least 70% of its products or services.

  • You need duty-free imports of equipment and materials.

  • You prefer operating inside designated economic zones for added perks.

Both are good, but your choice depends on whether you’re serving domestic demand (BOI) or global markets (PEZA).

How to Apply for PEZA Registration and BOI Accreditation

Step-by-Step Guide to Applying for BOI and PEZA Incentives

• For BOI:
  1. Check if your project is in the Investment Priorities Plan (IPP).

  2. Submit an application with supporting documents (business plan, financials, etc.).

  3. Attend evaluation meetings with BOI officers.

  4. Receive your Certificate of Registration once approved.

• For PEZA:
  1. Select an accredited PEZA economic zone for your operations.

  2. Submit a Letter of Intent and Project Proposal.

  3. PEZA reviews your application and investment plan.

  4. Once approved, you’ll be issued a PEZA Registration Certificate.

This step-by-step process makes it clearer how to apply for PEZA registration and BOI approval.

Compliance Requirements After Approval

Both agencies also require companies to comply with BOI and PEZA compliance requirements, such as:

• Submit annual reports on performance.

• Adhering to labor and environmental laws.

• Meeting export or production targets (for PEZA companies).

• Staying aligned with approved project scopes.

Failure to comply can lead to penalties, loss of incentives, or deregistration.

How BOI and PEZA Help Foreign and Local Investors

For businesses wondering how BOI and PEZA help foreign and local investors, the advantages are clear:

• Lower operating costs due to tax incentives.

• Easier market entry through simplified permits.

• Global competitiveness for exporters.

• Local industry support for domestic companies.

This mix of benefits is why both agencies remain attractive to investors deciding where to expand.

Frequently Asked Questions (FAQs)

1. What are BOI and PEZA incentives in the Philippines?
   They are government programs offering fiscal and non-fiscal benefits to attract local and foreign investments.
2. What types of tax holidays and exemptions do BOI-registered enterprises get?
   BOI grants up to 6 years of income tax holiday, customs duty exemptions, and extra deductions on training.
3. What benefits do PEZA-registered companies enjoy?
   PEZA enterprises enjoy tax holidays, 5% SCIT, VAT zero-rating, and customs duty exemptions.
4. What is the difference between BOI and PEZA incentives?
   BOI suits domestic industries, while PEZA favors exporters and IT-enabled service providers.
5. Who is eligible to apply for BOI or PEZA registration?
   Enterprises in priority industries (BOI) or export-oriented/IT service industries (PEZA).
6. Do BOI and PEZA offer both fiscal and non-fiscal incentives?
   Yes, both provide tax perks plus simplified procedures and foreign worker privileges.
7. How do foreign investors benefit from BOI and PEZA incentives?
   They gain lower costs, easier compliance, and global competitiveness.
8. What industries are covered under BOI and PEZA incentives in the Philippines?
   Manufacturing, IT services, renewable energy, agribusiness, and more.
9. How can a company apply for BOI or PEZA registration?
   By submitting applications with project proposals and undergoing agency evaluations.
10. What are the compliance requirements after BOI or PEZA approval?
    Annual reports, compliance with labor/environmental laws, and adherence to project commitments.

Final Thoughts

The investment incentives in the Philippines offered by BOI and PEZA are powerful tools to help businesses thrive.

• BOI incentives for local businesses are perfect if you want to tap into the domestic market.

• PEZA tax perks and exemptions are best if you’re export-driven or an IT-enabled enterprise.

Instead of viewing it as BOI vs PEZA incentives explained simply, think of it this way:
👉 BOI strengthens industries at home.
👉 PEZA positions businesses for global success.

The right choice depends on your business model, target market, and growth plans.

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