What is the Difference Between PEZA and BOI Incentives?
If you’re planning to invest or expand your business in the Philippines, you’ve likely come across PEZA and BOI incentives. Both are government-backed programs that offer tax breaks and other perks to qualified businesses, but choosing between the two can be confusing.
This guide will walk you through the differences between PEZA vs BOI incentives, the benefits of each, eligibility requirements, and how to choose the right agency for your business.
TL;DR: PEZA vs BOI Incentives
The main difference between PEZA and BOI incentives lies in their eligibility criteria and purpose. PEZA is tailored for export-oriented enterprises located within designated ecozones, while BOI supports a wider range of priority industries regardless of location. Both offer tax holidays and other fiscal benefits, but the right agency for your business depends on your industry, location, ownership structure, and operational strategy.
Understanding PEZA and BOI: A Quick Overview
What is PEZA?
The Philippine Economic Zone Authority (PEZA) is a government agency that promotes and facilitates investments in export-oriented manufacturing and service facilities inside designated economic zones.
PEZA incentives Philippines mainly target businesses that:
- Export at least 70% of their output
- Operate within a PEZA-registered location (IT park, ecozone, etc.)
- Are in sectors like IT-BPO, manufacturing, logistics, or renewable energy
What is BOI?
The Board of Investments (BOI) is the lead government agency promoting investments across national priority industries, regardless of location. BOI supports businesses that align with the government’s annual Investment Priorities Plan (IPP) or the Strategic Investment Priority Plan (SIPP).
BOI incentives Philippines typically support:
- Businesses in industries like agriculture, infrastructure, energy, innovation, and health
- Exporters and domestic market-oriented businesses
- Startups and foreign companies wanting to enter the Philippine market
PEZA vs BOI Incentives: Side-by-Side Comparison
| Feature | PEZA | BOI |
| Eligibility | Export-oriented; ecozone-located | Priority industries (IPP/SIPP) |
| Location Requirement | Must be in a PEZA ecozone | No specific location needed |
| Export Requirement | Minimum 70% export | Optional (depends on activity) |
| Tax Holidays | 4 to 6 years ITH | 4 to 6 years ITH |
| Other Incentives | Duty-free importation, VAT zero-rating | Tax exemptions, simplified customs |
| Post-ITH Incentives | 5% GIE (or SCIT under CREATE) | SCIT or enhanced deductions |
| Application Process | Through PEZA, zone-based compliance | Through BOI, wider activity-based |
| Best For | Exporters, IT-BPO, and manufacturing | Startups, domestic producers, services |
BOI vs PEZA Benefits: Which Is Better?
This depends entirely on your business model and goals. Here are some scenarios:
Choose PEZA If:
- Your business exports goods or services
- You’re locating your business inside a PEZA ecozone
- You want streamlined import/export procedures
Choose BOI If:
- You’re a domestic enterprise serving the local market
- You plan to invest in a priority industry
- You’re outside an ecozone or cannot meet the 70% export requirement
Still wondering BOI or PEZA, which is better? The answer lies in which one matches your operations, location, and market.
Incentives for Exporters: BOI vs PEZA
Both BOI and PEZA offer generous incentives to exporters. Here’s a closer look:
PEZA Incentives for Exporters:
- Income Tax Holiday (ITH): 4 to 6 years
- 5% GIE in lieu of all national/local taxes
- Duty-free importation of capital equipment
- VAT zero-rating on local purchases
- Simplified customs procedures
BOI Incentives for Exporters:
- ITH of 4 to 6 years
- Enhanced Deductions under the CREATE law
- SCIT (Special Corporate Income Tax) option
- Tax and duty exemptions for specific imports
- Investment facilitation services
How to Choose Between PEZA and BOI
If you’re stuck choosing between the two, here are the key factors to weigh:
1. Location
- PEZA: Must operate within a PEZA zone
- BOI: No geographic restrictions
2. Market Focus
- PEZA: Primarily for exporters
- BOI: Can be local or export-oriented
3. Industry
- Check if your business falls under BOI’s IPP/SIPP or PEZA’s eligible sectors.
4. Ownership Structure
- Both PEZA and BOI accept 100% foreign ownership in certain sectors
5. Operational Strategy
- Consider long-term tax planning, compliance resources, and expansion goals
Need help? Consider working with a consultant who understands PEZA and BOI comparison for businesses and can guide you through the application process.
PEZA Registration vs BOI Registration: A Quick Look
PEZA Registration Steps:
- Choose a PEZA ecozone location
- Apply through the PEZA Investment Promotion Partner
- Submit business plans and documentary requirements
- Wait for evaluation and approval
BOI Registration Steps:
- Check industry eligibility (IPP/SIPP)
- Submit application and project brief
- Undergo a presentation and interview
- Await the BOI Board resolution
Registration timelines vary, but most approvals take 30-60 days.
Common Confusion: BOI vs PEZA Tax Holiday Comparison
While both offer Income Tax Holidays, only PEZA offers the simplified 5% GIE incentive. BOI, under CREATE, allows enhanced deductions instead.
FAQ: PEZA vs BOI Incentives
What is the main difference between PEZA and BOI incentives?
PEZA requires businesses to be export-oriented and located in a PEZA zone. BOI is more flexible and supports a wider range of industries.
Which agency offers better tax incentives—BOI or PEZA?
It depends on your needs. PEZA offers GIE and simplified customs; BOI provides enhanced deductions and broader eligibility.
Can a company register with both BOI and PEZA?
No. You can only register with one incentive agency per project.
Who should register with PEZA?
Exporters, IT-BPO firms, and manufacturers planning to operate within a PEZA zone.
What types of businesses are eligible for BOI incentives?
Priority industries listed in the IPP or SIPP include infrastructure, healthcare, energy, agribusiness, and innovation.
Do PEZA and BOI incentives both offer tax holidays?
Yes, both offer a 4-6 year Income Tax Holiday (ITH).
Is PEZA only for export-oriented businesses?
Yes. A minimum of 70% of production/services must be exported.
Are there location requirements for PEZA and BOI registration?
PEZA requires operations in a registered ecozone. BOI does not.
How long does it take to register with PEZA or BOI?
Typically 30 to 60 working days, depending on the completeness of documents and project complexity.
Can foreign-owned companies apply for PEZA or BOI incentives?
Yes, depending on the activity and compliance with the Foreign Investment Negative List (FINL).
Are incentives the same across industries under BOI and PEZA?
No. Incentives vary based on activity, investment size, and location.
What is the application process difference between PEZA and BOI?
PEZA focuses on zone compliance; BOI focuses on project viability and industry alignment.
Are there differences in reporting or compliance requirements?
Yes. PEZA firms report to zone administrators; BOI registrants report directly to BOI.
Can IT-BPO companies qualify for PEZA or BOI incentives?
Yes. PEZA is a popular choice for IT-BPOs, but BOI may also apply if location or export requirements can’t be met.
What is more suitable for a startup—PEZA or BOI?
Startups not located in a PEZA zone or not yet export-ready may benefit more from BOI incentives.
Final Thoughts
Choosing between PEZA vs BOI incentives depends on your business’s unique profile. Take time to assess your industry, target market, export capacity, and location strategy. Whether you’re a foreign investor or a local entrepreneur, understanding the difference between PEZA and BOI can unlock powerful government support for your growth.
Need help evaluating your options or submitting your application? Get in touch with our team for tailored guidance on how to choose between PEZA and BOI.