Did you know that obtaining PEZA accreditation can significantly improve businesses’ operations within the Philippines’ economic zones? This accreditation allows companies to benefit from various tax incentives, streamline processes, and gain better access to global markets.
Failing to secure or maintain PEZA accreditation can lead to missed opportunities, higher operational costs, and reduced competitiveness. It may also hinder your ability to fully leverage the advantages of operating within a special economic zone.
HashMicro’s ERP Software makes managing compliance and reporting for PEZA-accredited businesses easier. The software helps you stay aligned with PEZA requirements through automated reporting, real-time data tracking, and efficient document management.
Keep reading to learn more about PEZA accreditation and how HashMicro’s digital solutions can support your compliance efforts and pagbutihin ang iyong mga operasyon sa negosyo sa Pilipinas.
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Key Takeaways
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What is PEZA Accreditation?
PEZA Accreditation is an official recognition from the Philippine Economic Zone Authority, the government agency responsible for managing and encouraging investment in special economic zones in the Philippines.
These areas are designed to attract investment, particularly in the export sector, by offering benefits such as tax incentives, import duty exemptions, access to modern infrastructure facilities, and contribution to job creation and national economic progress.
The process for obtaining this accreditation includes a rigorous assessment to ensure that the prospective investor’s company meets the requirements and is aligned with the economic development vision set by the relevant authorities.
Moreover, businesses operating within PEZA zones must comply with local labor laws, including holiday pay in the Philippines, ensuring fair treatment and proper employee benefits. This integrated approach fosters investment and promotes responsible and sustainable business practices.
Benefits of PEZA Accreditation
PEZA accreditation provides numerous advantages for businesses investing in the Philippines, including enhanced productivity, cost efficiency, improved service delivery, and robust government support through well-established policies.
Beyond these core benefits, PEZA accreditation also covers two additional categories that further strengthen its value for investors. These include:
Fiscal incentives
- Income tax holiday (ITH)
Export-oriented companies may benefit from income tax exemptions ranging from 4 to 7, depending on their business location and the industry’s priority level.
- Post-ITH options
After the ITH period, companies can choose one of two options:
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- Special corporate income tax (SCIT): Companies pay a reduced tax rate of 5% on their gross income, of which 3% goes to the national government and 2% to the local government unit where the company operates.
- Enhanced deductions: Take advantage of increased deductions from their taxable income for 10 years or a fiscal year.
- Import savings
You can bring capital equipment, raw materials, spare parts, and accessories without paying duties. It can help lower your company’s production expenses.
- Streamlined VAT
VAT-free importation of goods and zero-rated VAT on local purchases directly tied to your approved export operations. It helps streamline your tax obligations and enhances compliance efficiency.
- Domestic sales flexibility
You can sell up to 30% of your output within the domestic market and retain the associated benefits. This allows you to serve local customers while maintaining an export focus.
- Reduced local taxes
By opting for the 5% SCIT, your business can enjoy exemption from specific local government taxes and charges, which can help lower operational expenses even further.
Non-fiscal incentives
- Work opportunities for foreign experts
PEZA-registered companies can employ foreign professionals in supervisory, technical, or advisory roles, enabling businesses to tap into a broader and more diverse talent pool.
- Long-term stability
Ensure stability for your business with land lease agreements that can extend up to 75 years. This long-term security allows you to concentrate on sustainable growth and future development strategies without worry.
- Visas for investors and families
The agency provides special multiple-entry visas for foreign investors, their spouses, and unmarried children under 21. It facilitates relocation and enables families to stay together during the investor’s business activities in the country.
Who Can Apply for PEZA Accreditation?
This accreditation primarily targets companies engaged in export-driven activities such as manufacturing, processing, or assembly, as well as those supporting export operations. It is also available to enterprises planning to establish operations within officially designated economic zones.
However, ensuring that your business aligns with the specific categories of permitted activities is essential to qualify for this recognition. So, here are the industries that are eligible for PEZA accreditation:
- Export manufacturing
- Information technology export
- Medical tourism
- Tourism
- Agro-industrial biofuel manufacturing
- Agro-industrial export manufacturing
- Economic zone development operations
- Manufacturing economic zone development/operation
- Agro-industrial economic zone development/operation
- IT park development/operation
- Tourism economic zone development/operation
- Medical tourism economic zone development/operation
- Retirement economic zone development/operation
- Logistics and warehouse services
- Facilities providers
- Facilities for manufacturing enterprises
- Facilities for IT enterprises
- Retirement facilities
- Utilities
How to Apply for a PEZA Accreditation
Here’s a simplified walkthrough to help you meet PEZA accreditation requirements and obtain accreditation without hassle:
Step 1: Identify your industry eligibility
To begin the process, determine whether your business sector is covered under PEZA’s registration criteria. This information is available on their official website, or you can get assistance by contacting their officers or consulting with compliance professionals for expert advice and detailed guidance.
Step 2: Gather requirements
After verifying that your business meets the eligibility criteria, the next step is to compile all required documentation specified by the authority carefully. This often involves preparing corporate registration papers, detailed business plans, financial records, and comprehensive project outlines.
Step 3: Submit your application
Complete all required application documents with accurate information. These forms can be obtained through the official website or their office. Be sure to adhere to the specified submission method, which could involve filing the application digitally or delivering it physically.
Step 4: Application review and evaluation
After submission, the agency will assess your application by examining your business proposal, financial stability, and adherence to applicable guidelines. They may also conduct an on-site visit to validate your shared details.
It’s important to stay responsive and ready to provide any extra documents or clarifications they may require during the evaluation process.
Step 5: Approval and accreditation
Once your application is accepted, the agency will inform you of the outcome, including confirmation of your accreditation. This notice will outline the privileges granted and responsibilities you must fulfill. Additionally, you may be required to enter into specific contracts, such as a lease for facilities within a designated PEZA zone.
Step 6: Post-accreditation compliance
To retain your PEZA-accredited status, it’s essential to stay compliant by consistently submitting the necessary reports related to operational activities, financial updates, and other required disclosures. Monitor renewal schedules closely and promptly report any significant changes in your business structure or activities.
What are the Risks of Non-Compliance?
Neglecting to follow PEZA regulations can lead to substantial financial setbacks for businesses that invested in the Philippine Economic Zone Authority (PEZA).
Each instance of non-compliance comes with increasing penalties: PHP 500 for a first offense, PHP 1,000 for a second, and PHP 2,000 for a third. In addition, daily charges apply—PHP 50 per day for the initial violation, PHP 150 for the second, and PHP 200 for the third, adding to the cost over time.
Beyond the fines, failing to meet compliance requirements means forfeiting valuable incentives such as tax exemptions and duty-free privileges. It can reduce a company’s competitive edge and hinder its ability to grow and thrive in the long run.
To help businesses avoid these costly penalties and maintain full compliance with PEZA regulations, HashMicro’s ERP Software provides powerful automation tools that simplify adherence to standards. By aligning transactions with performance obligations and offering real-time insights, the software ensures your operations stay on track and compliant.
Click the banner below to learn more about Hashmicro’s features and pricing, and discover how it can streamline your PEZA accreditation process and safeguard your business.
Simplify PEZA Accreditation with HashMicro’s ERP Software
HashMicro’s ERP software is a comprehensive solution to simplify and streamline businesses’ PEZA accreditation process. It integrates multiple modules to support compliance monitoring, automated reporting, real-time data synchronization, and adherence to PEZA regulations.
HashMicro offers a free demo and consultation, allowing potential users to explore its features and understand how the system can accelerate PEZA accreditation. It allows businesses to evaluate their benefits before committing.
Here are the key features from HashMicro that support PEZA Accreditation:
- Automated Documentation: Helps generate essential documents automatically to meet PEZA requirements.
- Audit-Ready Reporting: Delivers reports that are always prepared for audits, facilitating verification and inspections.
- Compliance Consulting: Offers strategic guidance to ensure your business aligns with PEZA regulations.
- Business Data Integration: Unifies data from manufacturing, finance, HR, and logistics for thorough PEZA evaluation.
- Asset and Investment Management: Simplifies tracking of land, assets, and investment projects critical for accreditation.
- Governance and Risk Management: Ensures ethical practices and transparency according to PEZA governance standards.
- Social Responsibility Tracking: Monitors CSR initiatives and social impact as part of sustainability assessments by PEZA.
With HashMicro’s ERP Software, companies can manage the entire PEZA accreditation process more efficiently, accurately, and in full compliance with regulations.
Conclusion
Implementing HashMicro’s ERP Software for PEZA accreditation helps businesses streamline compliance by automating documentation, centralizing record management, and providing real-time updates on accreditation status.
This solution is essential for ensuring adherence to PEZA regulations and government requirements. With features such as automated report generation, audit-ready documentation, and compliance monitoring tools, companies can maintain accuracy and minimize errors in their accreditation process.
Using HashMicro’s ERP Software, your business can simplify PEZA accreditation, improve transparency, and support long-term operational growth. Discover how to make the process easier—try a free demo today!
Frequently Asked Questions
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What are the benefits of being PEZA registered?
PEZA-recognized industrial parks offer fiscal benefits such as Income Tax holidays, preferential tax rates, exemptions from national and local taxes, and duty-free importation.
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Who qualifies for PEZA?
Activities that qualify for registration with PEZA are those that involve manufacturing, processing, or assembling for export and those that support exports.
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Is PEZA private or government?
PEZA is a government corporation affiliated with the Department of Trade and Industry. It is governed by a 13-man Board, chaired by the Secretary of the Department of Trade and Industry, and 12 other members.
