• List B : refers to areas that are defense-related, those with adverse effects on public health and morals and domestic market enterprises with paid-up capital of less than US$ 200,000,provided they involved advanced technology as determined by the Department of Science and Technology (DOST) or directly employ at least fifty (50) employee, in which case, the paid-up capital shall be lowered to US$ 100,000 only to non-Philippine nationals.
  
  

Foreign-owned firms, whose ownership exceeds 40% of the outstanding capital stock and which proposes to engage in domestic -oriented activities, may be entitled to incentives if the proposed activity is listed in the current IPP and qualifies as Pioneer.

Philippine Economic Zone Authority (PEZA)
The Special Economic Zone Act of 1995 as amended, mandates the PEZA to operate, administer, manage and develop Special Economic Zones or Ecozone.

Enterprises that may qualify for registration with PEZA are those that will manufacture and export 100% of their production. Permission has to be sought if the enterprise located within the zone will export below 100% and in most cases, PEZA has allowed 30% of production in the domestic market. There are 98 operating proclaimed Special Economic Zones in the country.

1. Investment Incentives for Ecozone Developers/Operators
   
   

   • Income Tax Holiday (ITH)
     
     • 4 years for IT Parks/Buildings located outside of Metro Manila;
       
     • 6 years for manufacturing located in less developed area;
       
       
   • Incentives under the Build-Operate-Transfer Law, which includes government support for accessing Official Development Assistance and other sources of financing;
     
     
   • provision of vital off-site infrastructure facilities;
     
     
   • Option to pay a special 5% gross income tax, Lieu of all national and local taxes;
     
     
   • Permanent resident status for foreign investors and immediate family members;
     
     
   • Employment of foreign nationals;
     
     
   • Assistance in the promotion of economic zones to local and foreign locators enterprises;
     
     
2. Incentives for Ecozone and IT Locators
   
   
   • Income tax Holiday (ITH)
     
     
     • New registered pioneer firms - six(6) years from commercial operations;
       
       
     • New registered non - pioneer firms - six(4) years from commercial operations;
       
       
     • Expanding firms -- six(3) years from commercial operations of the expression;
       
       
     • After the ITH period, the option to pay a special 5% Tax on gross income, in lieu of all national and local taxes;
       
       
   • Exemption from duties and taxes on imported capital equipment ,spare parts suppliers ,raw material ;
     
     
   • Tax credit on Domestic breeding stock and genetic materials –an Ecozone export enterprise which purchases breeding stocks and genetic materials from a domestic producer shall be entitled to a tax credit equivalent to 100% of the value of national internal revenue taxes and customs duties that would have been waived on the breeding stocks and genetic materials had these items been in ported;
     
     
   • Domestic sales allowance equivalent to 30% of total sales;
     
     
   • Exemption from wharfage dues and export taxes, imposts and fees;
     
     
   • Simplified import and export procedures;
     
     
   • Other incentives under execution 226 (Omnibus investments code of 1987),as may be determined by the PEZA Board.
     
     
3. Other Incentives Programs
   
   Enterprises allowed to operate within the Subic Bay Freeport (SBF) shall, in lieu of paying all other taxes ,pay a final tax of 5 % of gross income provided their income from local (non –export ) sales shall not exceed 30% of their income from all source .

   Enterprises locating within the Clark Special Economic Zone (former Airbase at Clark Field) and Poro Point Special Economic and Freeport Zone (formely Wallace air station and its adjoining areas) are granted incentives similar to those given SBF enterprises.

   Two other special economic zones were created under two Separate special laws. These are the Cagayan Special Economic Zone Authority (CEZA) and the Zamboanga Economic Zone Authority (ZEZA).

   The incentives granted to those that will locate in these Ecozone are similar to the incentives granted to PEZA Ecozone enterprises.

The activities of the RHQ are limited to acting as a supervisory, communication and coordinating center for its subsidiaries affiliates and branches in the region.

It is neither allowed to derive any income form sources in the Philipines and to participate in any manner in the management of any subsidiary or branch office it might have in the Philippines nor to solicit or market goods and services whether on behalf of its mother company or its branches, affiliates, subsidiaries or any other company.


Regional Headquarters (RHQ) Incentives

1. Exemption from income tax;
   
2. Exemption from branch profits remittance tax;
   
3. Exemption from value –added tax;
   
4. Sales or lease of goods and property and services to the RHQ are zero rated;
   
5. Exemption from all kinds of local taxes, fees or charges imposed by a local government unit, except real property tax on land improvement and equipment ;
   
6. Exemption from all kinds of local taxes, fees or charges imposed by a local government unit, except real property tax on land improvement and equipment ;
   
7. Importation of brand new motor vehicle but subject to payment of taxes and duties.
   

Regional Operating Headquarters (ROHQ)

The regional operating Headquarter s may engage in any of the following qualifying services:

1. The regional operating Headquarters may engage in any of the following qualifying services;
   
   • General administration and planning
     
     
   • Business planning and coordination
     
     
   • Sourcing/procurement of raw material components
     
     
   • corporate finance advisory services
     
     
   • marketing control and sales promotion
     
     
   • Training and personnel management
     
     
   • logistics services
     
     
   • Research and development services and product development
     
     
   • Technical support and maintenance
     
     
   • Data processing and communications
     
     
   • Business development
     

    

Regional Operating Headquarters (ROHQ) Incentives

ROHQ is allowed to offer qualifying services only to its affiliates, branches or subsidiaries as declared in its registration with the Securities and Exchange Commission (SEC).It is not allowed to directly and indirectly solicit or market goods and services whether on behalf of their mother company, branches, affiliates, subsidiaries or any other company.

1. Multiple Entry Visa:
   
   • Expatriates, including spouse and unmarried children below 21 years old will be issued this type of visa;
     
     
   • Non immigrant visa will be processed within 72 hours form submission of documents to the bureau of immigration;
     
     
   • Validity period of 3 years extendible for another 3 years;
     
     
   • Exemption from payment of fees except reasonable administrative costs;
     
     
   • Exemption from securing Alien Certificate of Registration;
     
     
2. Withholding tax of 15% on compensation income allocable to both alien and Filipino executive holding managerial and technical positions
   
   
3. Tax and duty free importation of used household goods and personal effects;
   
   
4. Travel tax exemption
   
   • Personnel and their dependents.
     
     

1. He is not been convicted of a crime involving moral turpitude.
   
   
2. He is not affiliated with any loathsome, dangerous or contagious disease.
   
   
3. He is not been institutionalized for mental disorder or disability.
   
   
4. He is not willing and able to invest the amount of at least US$75,000,00 in the Philippines.