When you’re outsourcing to the Philippines, one of the many upsides of this venture is to save on costs. You would want a seamless experience in all aspects — especially in terms of transitioning your teams. You’re probably eager to tap into the world-acclaimed Filipino talent pool and start focusing on your core business functions again. When you’re ready to reap the benefits of outsourcing, falling in line for business permits and paying fees to government agencies should be the last thing you worry about. Instead of worrying about the legwork and the potential hassle of old-school paperwork — you can skip to the good part by looking for this specific keyword instead: PEZA.
What is PEZA?
Also known as the Philippine Economic Zone Authority, PEZA is an agency from the Department of Trade and Industry (DTI) created to promote investments into the Philippines. It specifically provides assistance to foreign entities in facilitating business operations of investors within selected areas in the country, which are called PEZA Special Economic Zones. Once accredited, business with PEZA certificates are entitled to fiscal and non-fiscal incentives. This is on top of the prospect of avoiding certain taxes and experiencing a more efficient processing of necessary permits and registration requirements.
Related Video: A look into PEZA-accredited Eastvantage Offices
In order to qualify for PEZA accreditation, your business must be in the following verticals: Export Manufacturing, Information Technology (IT) Service Export, Tourism, Medical Tourism, Agro-Industrial Export Manufacturing, Agro-Industrial Biofuel Manufacturing, Logistics and Warehousing Services, Economic Zone Development and Operation, Facilities Providers, and Utilities.
Each of these enterprises are entitled to their own sets of incentives. To give you specifics, we would be focusing on IT Service Export below:
- Income Tax Holiday. This is applicable for certain number of years which translates to 100% exemption from corporate income tax.
- Tax and Duty-Free for Importation. This is for importation for IT equipments and parts.
- Fees & Dues Exemption. This covers wharfage dues on import shipments on equipment.
- VAT zero rating. This incentive is for local purchases of goods and services, including land-based telecommunications, electrical power, water bills, and lease on building subject to compliance with the Bureau of Internal Revenue (BIR) and PEZA requirements.
- Exemption from Government Payments. This covers all government imports, fees, licenses or taxes.
- Exemption from Expanded Withholding Tax
- Simplified Trade Procedures. Import and export procedures are aided by Electronic Permit System and Automated Export Documentation system.
- Employment for Foreign Nationals. Non-residents can be employed in the country by PEZA-registered Economic Zone Enterprises in supervisory, technical, or advisory positions.
- Special Visa Privileges. This means a Special Non-Immigrant Visa with Multiple Entry Privileges for the following non-resident Foreign Nationals in a PEZA-registered Economic Zone Enterprise. This includes investors, officers, and employees in supervisory, technical, or advisory positions. This benefit is extended to spouses and unmarried children under 21 years of age.
Related Infographic: Benefits of Outsourcing to the Philippines
Outsource to the Philippines the right way
As of November 2017, there is a total of 379 operating economic zones in the country — ensuring a spot for business owners who want to establish their business roots in the Philippines. Hence, Eastvantage makes a very practical outsourcing partner in the country. You can outsource staff extension or experience our premium managed services. Whether you want business incubation, B-O-T, and incorporation services, you can become a PEZA-accredited company through Eastvantage. Not only are we PEZA-accredited, but we are an experienced and dedicated knowledge process outsourcing company that wants to take your business to the next level.
Let us walk you through our business solutions and get in touch with us today.
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