PEZA Registration for Tech Companies: What You Need to Know
TL;DR
PEZA registration for tech companies offers substantial tax perks, ease of doing business, and credibility in the global market. IT-BPM, software, and tech startups can benefit from income tax holidays, VAT exemptions, and simplified customs processes. However, eligibility and location requirements apply. This guide covers the process, requirements, and benefits of PEZA registration in the Philippines for tech firms.
Summary Answer: Should Tech Companies Register with PEZA?
Yes, tech companies—especially those in IT-BPM, software development, and tech-enabled services—can significantly benefit from PEZA registration. It opens access to fiscal and non-fiscal incentives, supports global competitiveness, and simplifies regulatory procedures. While the process can be stringent, the rewards often outweigh the administrative requirements.
What is PEZA and How Does It Help Tech Companies in the Philippines?
The Philippine Economic Zone Authority (PEZA) is a government agency that promotes investments and manages special economic zones. PEZA for IT companies is especially advantageous because it:
- Provides income tax holidays (ITH) and 5% special tax on gross income after ITH
- Offers zero-rated VAT on local purchases
- Simplifies import/export processing
- Enhances the global profile of PEZA-accredited IT companies in the Philippines
In essence, PEZA incentives for technology companies are designed to boost competitiveness and attract foreign investors.
Can Software and IT Companies Register with PEZA?
Yes, software and IT firms are among the most eligible sectors. PEZA registration for tech companies is open to:
- Software development and engineering
- Business Process Outsourcing (BPO)
- IT-enabled services (e.g., cloud computing, cybersecurity, AI)
- Data analytics and call centers
This includes both large enterprises and startups looking for the benefits of PEZA registration for tech startups.
PEZA Incentives Available for Tech Firms
PEZA offers both fiscal and non-fiscal incentives:
Fiscal Incentives:
- Income Tax Holiday (ITH) from 4 to 6 years
- 5% special tax on gross income in lieu of all national and local taxes after ITH
- VAT zero-rating on local purchases
- Tax and duty-free importation of equipment and raw materials
Non-Fiscal Incentives:
- Simplified import/export procedures
- Special visa privileges for foreign staff
- Access to government training programs
These PEZA tax perks for technology companies are particularly beneficial for firms scaling operations.
How to Register a Tech Company with PEZA
Step-by-Step PEZA Registration Process for IT-BPM Firms:
- Submit a Letter of Intent to PEZA
- Prepare and submit required documents (see next section)
- Attend the PEZA Board meeting for evaluation
- Receive Board approval and Registration Certificate
- Locate operations in a PEZA-accredited zone
Learning how to apply for PEZA as a tech firm is crucial, especially for startups navigating government processes for the first time.
PEZA Requirements for Tech Companies
Common Documents Needed:
- SEC registration and articles of incorporation
- Project brief or business plan
- Audited financial statements (if applicable)
- Location clearance within a PEZA zone
- PEZA application forms and fees
These are essential PEZA requirements for tech companies, whether local or foreign-owned.
Eligibility for PEZA Registration for IT-BPM Companies
To be eligible:
- The business must fall under the IT, BPO, or tech sector
- Must be export-oriented (at least 70% of output)
- Must operate in a PEZA-accredited building or zone
This eligibility for PEZA incentives in tech helps ensure that incentives go to firms contributing to the economy.
Do Tech Companies Need to Be in a PEZA Zone?
Yes. Tech companies must operate within a PEZA zone to qualify for incentives. These include:
- IT parks
- Cyberzones
- PEZA-designated buildings in urban centers (like Makati, BGC, Cebu)
Some remote work models are allowed post-pandemic, but must be approved by PEZA.
How Long Does PEZA Registration Take for Technology Firms?
The registration process generally takes 6 to 8 weeks, depending on document completeness and location approval.
Is PEZA Better Than BOI for Tech and Software Companies?
While both offer incentives, PEZA vs BOI for tech companies depends on:
- Location: PEZA requires presence in a zone; BOI does not
- Export orientation: PEZA mandates 70% export; BOI can be more flexible
- Incentives: PEZA offers operational perks (e.g., simplified customs)
So, is PEZA good for software companies? Yes—especially if export-focused and zone-located. BOI may suit hybrid models better.
What Taxes Can Tech Companies Save on With PEZA?
- Corporate income tax (0% during ITH; 5% GIE after)
- VAT on local purchases
- Customs duties on imported capital equipment
These tax incentives for businesses in the Philippines help improve profitability.
Are Foreign-Owned Tech Companies Eligible?
Yes. 100% foreign ownership is allowed for:
- Export-oriented companies (minimum 70% exports)
- Registered IT-enabled services
PEZA is favorable for foreign tech investors seeking a strategic ASEAN base.
Can Startups and Small IT Companies Register with PEZA?
Yes, as long as they meet the eligibility and location requirements. PEZA registration for tech startups is a great strategy for small firms planning to scale.
What Types of Tech Companies Are Allowed Under PEZA?
- Software development
- AI and machine learning
- SaaS and cloud services
- Tech support and managed services
- Data analytics and cybersecurity firms
These are the most common PEZA-accredited IT companies in the Philippines.
What Is the Process for Applying for PEZA Incentives for Software Development Companies?
Follow the standard application process:
- Confirm zone location
- Submit business plan and documents
- Secure Board approval
- Get registered and start operations
Consultants can guide you through registering a software company under PEZA efficiently.
Can a Tech Company Apply for Both BOI and PEZA Incentives?
No, companies must choose either PEZA or BOI. Dual registration is not allowed, but businesses may restructure or set up separate entities to avail of both under specific conditions.
Final Thoughts: Should Your Tech Company Register with PEZA?
If your business is:
- Export-oriented
- Operating or willing to locate in a PEZA zone
- Planning to scale with operational efficiencies
…then PEZA is a highly strategic option.
PEZA registration for tech companies can unlock growth through tax savings, simplified processes, and global credibility. Whether you’re a startup or an established IT firm, understanding how to register with PEZA and what it offers can be a game-changer.
For tech firms aiming to scale and compete internationally, PEZA incentives for technology companies provide an edge that’s hard to ignore.