Can a Startup Apply for PEZA Incentives?
TL;DR Summary: Yes, startups can apply for PEZA incentives in the Philippines. As long as they meet eligibility criteria, including being export-oriented and operating within PEZA-accredited zones, startups can enjoy tax perks, duty-free importation, and regulatory support. This includes tech startups and foreign-owned ventures. While many assume PEZA is only for big multinational corporations, small businesses can also qualify.
Introduction: Is PEZA Only for Big Corporations?
One of the most common myths about the Philippine Economic Zone Authority (PEZA) is that it caters only to large, multinational companies. But here’s the truth: startups can apply for PEZA incentives too. In fact, PEZA has become increasingly supportive of innovative startups and SMEs, especially those involved in IT, software, business process outsourcing (BPO), and export manufacturing.
If you’re a startup founder wondering whether you qualify or how to navigate the PEZA registration process, this blog post breaks it all down.
Quick Overview: What is PEZA?
The Philippine Economic Zone Authority (PEZA) is a government agency tasked with promoting investments in export-oriented industries by granting fiscal and non-fiscal incentives to qualified enterprises located in PEZA-accredited zones.
These zones include:
- IT parks
- Ecozones
- Manufacturing zones
- Special Economic Zones
PEZA incentives for startups and other businesses aim to make the Philippines a globally competitive destination for investments.
Why Should Startups Consider PEZA Incentives?
Startups often operate on tight budgets and need every financial advantage possible. The PEZA benefits for new businesses include significant savings and streamlined government procedures.
Key Incentives:
- Income Tax Holiday (ITH) of 4 to 6 years
- Duty-free importation of capital equipment and raw materials
- Zero-rated VAT on local purchases
- Exemption from wharfage dues and export tax
- Simplified customs procedures
- Visa assistance for foreign employees
These are real startup tax perks PEZA Philippines offers to ease the burden and promote growth.
PEZA Eligibility: Can Your Startup Apply?
Yes, but there are some criteria. Here’s what qualifies:
What Types of Startups are Eligible for PEZA?
- IT and software development firms
- BPO and KPO service providers
- Export manufacturing businesses
- Data centers and R&D facilities
- Engineering design or analytics startups
These businesses must export at least 70% of their output or services to be eligible.
Can Foreign-Owned Startups Apply?
Absolutely. PEZA incentives application for foreign startups is allowed as long as they meet the export requirement and operate within a PEZA-accredited zone.
PEZA Requirements for Startups:
- Must operate within a PEZA-registered IT Park or Ecozone
- Minimum capital (varies depending on business type and ownership)
- SEC or DTI registration
- A clear business plan demonstrating export orientation
- Letter of intent and project brief
How to Apply for PEZA as a Startup
The PEZA registration process for new companies involves several steps:
- Prepare and submit a Letter of Intent to PEZA
- Submit a Project Brief and Business Plan
- Provide corporate documents (SEC registration, Articles of Incorporation, etc.)
- Attend a briefing or orientation with PEZA
- Wait for the PEZA Board evaluation and approval
- Register your project once approved and start operations within a PEZA zone
Pro tip: Partnering with a PEZA-accredited facility or incubator can speed up the process.
PEZA vs BOI for Startups: What’s the Difference?
Startups often ask whether to register under PEZA or BOI (Board of Investments).
| Criteria | PEZA | BOI |
| Location Requirement | Must operate in PEZA zones | Nationwide scope |
| Export Requirement | Yes (usually 70%) | Not always required |
| Incentives | Fiscal + non-fiscal | Fiscal only |
| Focus | Export and tech-enabled | Strategic industries, local and export |
If you’re export-focused and plan to operate in an economic zone, PEZA may offer better benefits. For domestic startups, BOI may be the better fit.
Real-World Examples: PEZA Support for New Businesses
Many small IT and BPO startups have successfully registered under PEZA, particularly those operating in hubs like:
- Bonifacio Global City (BGC)
- Cebu IT Park
- Davao Park District
Some PEZA-accredited incubators also provide space to early-stage startups, lowering capital requirements.
Common Concerns: Is PEZA Too Much for a Small Startup?
Concern: “Isn’t PEZA for big businesses only?”
Reality: No, PEZA welcomes qualified startups.
Concern: “The process sounds too complicated.”
Reality: While there is paperwork, the long-term tax savings are significant.
Concern: “We don’t have a PEZA zone nearby.”
Reality: Many major cities now have PEZA-accredited buildings and zones.
FAQs About PEZA Incentives for Startups
- Can a startup apply for PEZA incentives in the Philippines?
Yes, startups can apply if they meet the export and location criteria. - What are the requirements for a startup to qualify for PEZA?
Operate in a PEZA zone, be export-oriented, and submit the necessary documents. - What types of startups are eligible for PEZA registration?
IT, BPO, manufacturing, R&D, and other export-focused businesses. - What are the benefits of PEZA incentives for startups?
Income tax holidays, VAT exemptions, duty-free imports, and easier compliance. - Do startups need to be inside a PEZA zone to get incentives?
Yes. Location in an accredited IT park or ecozone is mandatory. - How does a startup apply for PEZA incentives?
By submitting a Letter of Intent, project brief, and business registration documents. - Can foreign-owned startups qualify for PEZA incentives?
Yes, if they meet the 70% export requirement and other criteria. - Is there a minimum capital requirement for PEZA startup applicants?
Yes, depending on the nature of the business and ownership structure. - What is the difference between PEZA and BOI incentives for startups?
PEZA is zone-based with export focus; BOI is location-flexible and broader. - Are tech startups eligible for PEZA support?
Definitely, especially if providing software or IT services for export. - How long does the PEZA registration process take for startups?
Approximately 2 to 3 months, depending on completeness and compliance. - Can a startup get both PEZA and BOI incentives?
No. You can only register under one investment promotion agency. - What are the limitations of PEZA incentives for startups?
Limited to export-oriented businesses and zone-based operations. - Can a startup lose PEZA incentives after approval?
Yes, if it fails to meet export requirements or violates compliance. - Are there PEZA-accredited incubators or coworking spaces for startups?
Yes. These are emerging in major cities and tech hubs.
Final Thoughts: Is PEZA Right for Your Startup?
If your startup is engaged in export, IT-enabled services, or manufacturing, and you plan to operate in a PEZA-accredited facility, PEZA incentives for startups can provide major advantages. It’s not just for big corporations—PEZA supports small and medium enterprises, too.
Evaluate your location, business model, and export capacity. If these align with PEZA requirements, you could unlock significant tax savings, streamlined processes, and credibility.
Need Help with PEZA Registration?
If you’re not sure where to start or how to meet the eligibility requirements, reach out to professionals experienced in PEZA registration in the Philippines. Getting guidance can make the process smoother and faster for your startup.