BOI vs. PEZA: Which Incentive Agency Is Right for Your Business?
TL;DR (Too Long; Didn’t Read)
Trying to decide between BOI and PEZA? Here’s the quick rundown:
- BOI (Board of Investments): Ideal for businesses serving the domestic market and foreign-owned companies.
- PEZA (Philippine Economic Zone Authority): Best for export-oriented businesses operating inside PEZA zones.
- Tax Incentives: Both offer tax perks, but PEZA incentives are more generous for exporters.
- Ease of Setup: BOI has simpler geographic requirements, while PEZA requires locating in designated zones.
Bottom line: Choose BOI for flexibility and local market access; go with PEZA if you’re focused on exports and want higher tax perks.
Summary: BOI vs PEZA for Businesses in the Philippines
Foreign and local companies looking to expand in the Philippines often face a strategic question: BOI vs PEZA. Both are investment promotion agencies in the Philippines, and each offers tax incentives, regulatory support, and government backing. But they serve different business models.
In this blog, we break down the difference between BOI and PEZA incentives, compare their advantages, and help you decide which is better suited for your business.
What Are BOI and PEZA?
Board of Investments (BOI)
The BOI operates under the Department of Trade and Industry and supports enterprises that are part of the Philippines’ Investment Priorities Plan (IPP). BOI is a good fit for:
- Companies catering to the domestic market
- Foreign-owned companies (with 100% foreign equity allowed in select industries)
- Enterprises involved in priority sectors like manufacturing, renewable energy, and IT
Philippine Economic Zone Authority (PEZA)
PEZA promotes investments in special economic zones. It targets companies that export goods or services abroad. PEZA registration is suitable for:
- Export-oriented businesses (at least 70% export)
- BPOs, IT companies, manufacturers, and logistics firms
- Businesses willing to locate inside PEZA-accredited zones
BOI vs PEZA: Key Differences
| Feature | BOI | PEZA |
| Primary Focus | Domestic & export (flexible) | Export-oriented only |
| Location Requirement | No need to be in a special zone | Must be in a PEZA zone |
| Foreign Ownership | Allowed for priority sectors | Allowed, but must export at least 70% |
| Tax Incentives | Yes (including ITH) | Yes (ITH, 5% GIE, VAT zero-rating) |
| Regulatory Perks | Simplified import/export process | Streamlined customs, tax perks |
| Common Users | Local manufacturers, energy companies | BPOs, exporters, IT firms |
This PEZA vs BOI Philippines comparison helps you decide based on your business model and market focus.
BOI Incentives at a Glance
Here are the benefits of registering with BOI:
- Income Tax Holiday (ITH): Up to 6 years, depending on location and industry
- 100% foreign ownership in qualified sectors
- Tax and duty exemption on imported capital equipment
- Employment of foreign nationals in supervisory roles
- Simplified customs procedures
These BOI incentives attract companies in key growth sectors and encourage domestic market development.
PEZA Incentives at a Glance
Here are the advantages of PEZA registration:
- Income Tax Holiday (ITH): Up to 8 years
- 5% Special Gross Income Tax (GIT) in lieu of all local and national taxes (after ITH)
- VAT zero-rating on local purchases
- Duty-free importation of capital equipment and raw materials
- Special visas for foreign employees and simplified immigration procedures
These PEZA incentives are especially beneficial for exporters and IT-BPO companies.
How to Choose Between BOI and PEZA
Wondering which is better: BOI or PEZA? Consider the following:
Choose BOI if:
- You are targeting the Philippine domestic market
- You don’t plan to set up in a PEZA zone
- You belong to an IPP-listed industry
- You want flexible ownership structures
Choose PEZA if:
- Your business is at least 70% export-oriented
- You plan to establish operations in an economic zone
- You want to maximize PEZA tax incentives
- You’re in the IT-BPO, manufacturing, or logistics sector
This simple PEZA vs BOI registration guide can help foreign and local investors find the right fit.
Foreign-Owned Companies: BOI vs PEZA
If you’re a foreign investor, the choice depends on your business activity:
- BOI allows 100% foreign ownership in sectors like renewable energy, BPOs, and infrastructure.
- PEZA allows 100% foreign ownership only if you export 70% or more.
So, for BOI vs PEZA for foreign investors, the key difference lies in the export requirement.
Common Questions: BOI vs PEZA FAQs
1. What is the difference between BOI and PEZA?
BOI supports domestic and export businesses across the Philippines. PEZA focuses on export-oriented businesses operating inside PEZA zones.
2. What are the benefits of registering with BOI?
BOI provides tax holidays, capital equipment exemptions, and full foreign ownership in priority sectors.
3. What incentives does PEZA offer to businesses?
PEZA offers income tax holidays, 5% gross income tax, VAT zero-rating, and duty-free importation.
4. Which is better for tax incentives: BOI or PEZA?
PEZA incentives are often more generous for exporters, while BOI incentives offer more flexibility for businesses not in PEZA zones.
5. Can foreign-owned companies register with BOI or PEZA?
Yes. Foreigners can register with BOI or PEZA, depending on their industry and export percentage.
6. What types of businesses are eligible for PEZA registration?
Exporters, IT-BPO firms, manufacturers, logistics companies, and agro-industrial businesses.
7. Is it easier to register with BOI or PEZA?
BOI has simpler location requirements. PEZA requires your business to operate in a PEZA-accredited zone.
8. How do I choose between BOI and PEZA for my business?
Base your decision on your market (local vs. export), location flexibility, and the tax incentives you want to access.
9. Can a business register with both BOI and PEZA?
No, a business can only register with one incentive agency at a time.
10. Do PEZA and BOI offer the same incentives?
Not exactly. While both offer income tax holidays (ITH), PEZA provides VAT zero-rating and 5% GIT after ITH.
11. What is the process of applying for BOI incentives?
Submit your application through BOI, including project details and proof of IPP alignment. Processing time is usually 3–6 weeks.
12. How long does PEZA registration take?
The full PEZA application and registration process typically takes 2 to 3 months, depending on compliance and zone availability.
13. What industries are supported by BOI vs PEZA?
- BOI: Manufacturing, infrastructure, agriculture, energy, logistics
- PEZA: BPO, IT services, export manufacturing, ecozone development
14. Are PEZA and BOI incentives available for IT-BPO companies?
Yes. IT-BPOs can register with either, but PEZA is often preferred due to more generous tax perks.
15. Do BOI or PEZA registrations offer income tax holidays (ITH)?
Yes, both agencies provide ITH. Duration and scope vary based on industry and location.
Conclusion: Make the Right Choice for Your Business
Choosing between BOI and PEZA is a crucial step in maximizing your government incentives for businesses in the Philippines. Whether you’re a foreign investor or a local entrepreneur, this BOI vs PEZA comparison helps you align with the right agency.
If your business is export-driven and ready to operate within an economic zone, PEZA registration may offer the most value. On the other hand, if you need more operational flexibility or target the local market, BOI incentives could be your best bet.
Still unsure? Consult with experts who can guide you through the PEZA vs BOI tax incentives, registration processes, and industry requirements.
Need help navigating BOI or PEZA registration? Contact us today to learn how you can maximize your tax benefits and streamline your expansion in the Philippines.