Philippines free zones

Philippines free zones

The Philippines authorities provide special economic zones (SEZs) in which larger foreign investment projects can be registered in order to benefit from multiple incentives. Investment projects are selected by the Philippines Economic Zone Authority (PEZA), according to multiple criteria including i) the nature of the business of the applicant ii) the expected customers (export oriented businesses are favored) iii) the existence of technologies transfers and iv) the size of the project in terms of initial investment and job creations. Kindly find below an overview of the main considerations for company registration in a Philippines free zone and a comparison of the characteristics of the most popular SEZs.

Main benefits of registering a company in a Philippines free zone

    Register Philippines free zone company

  • Projects registered in a Philippines SEZ benefit from tax holidays of up to i) six years for export oriented manufacturing and IT technologies businesses and ii) four years for tourism, medical tourism and agro industrial businesses. These tax holidays can be extended by up to eight years according to i) the nature and size of the project (minimum investment of US$500,000) and ii) whether the company uses indigenous raw materials;
  • Companies registered in a Philippines SEZ will also receive the following tax benefits: i) exemption from VAT on entrants purchased locally ii) duty free imports on raw material and equipment and iii) exemption from withholding tax on dividends distributed to overseas shareholders;
  • Non fiscal advantages also include: i) simplified import/export procedures for products manufactured within the Philippines export processing zones and ii) simplified procedures to obtain work permits for foreign employees working within the zones.

Requirements to register business within a Philippines free zone

  • Investment projects are assessed on a case by case basis by PEZA (or another relevant free zone authority when applicable). While there is no official investment threshold, Healy Consultants recommends our Clients to seek registration only if their investment project is likely to reach a minimum investment level of US$250,000;
  • See also this page for additional information regarding eligible activities.

Comparison of free zones

Special Economic ZoneSubay Bay Freeport ZoneClark Freeport ZoneZamboanga Ecozone and Free PortCagayan Economic Zone
Average annual Industrial space rent per 1000 sq. m.US$2,800US$3,600US$2,500US$4,800
Timelines for company formation?8 weeks8 weeks8 weeks8 weeks
How long to open company bank account?4 weeks4 weeks4 weeks4 weeks
Quality of utilities?FairExcellentExcellentGood
Allowed to sign sales contracts with Philippines Clients?YesYesYesYes
Allowed to invoice Philippines Clients?YesYesYesYes
Corporate tax payable in Philippines?YesYesYesYes
Corporate bank account?Maybank PhilippinesStandard CharteredDeutsche BankJP Morgan Chase
Physical office space required?YesYesYesYes
Industrial space availability?ManyLimitedManyMany
Allowed to import raw materials?YesYesYesYes
Allowed to export goods?YesYesYesYes
Wholly foreign owned?YesYesYesYes
Can the entity hire expatriate staff in Philippines?YesYesYesYes
Do you visit Philippines for company incorporation?NoNoNoNo
Minimum number of directors?5555
Resident director required?Yes, 3Yes, 3Yes, 3Yes, 3
Minimum number of shareholders?5555
Tax registration required?YesYesYesYes
Individual shareholders allowed?YesYesYesYes
Corporate shareholders allowed?YesYesYesYes
Public register of shareholders and directors?YesYesYesYes
LLC company allowed?YesYesYesYes
Can apply for immigration visas?YesYesYesYes
Annual audited financial statements?YesYesYesYes
Annual tax return to be submitted?YesYesYesYes

Frequently asked questions

Contact us

For additional information on our free zone company registration services in Philippines, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi