PEZA Registration in the Philippines

TYPE OF FRONTLINE SERVICE : Cancellation/Temporary Closure/Delisting of PEZA

Registration/Registered Activity
FEES – None
FORMS - Letter Request
PROCESSING TIME - 15 days
IN CHARGE - ERD Staff
PROCESSING OF APPLICATION FOR CANCELLATION/TEMPORARY CLOSURE/DELISTING OF PEZA
REGISTRATION/REGISTERED ACTIVITY: SCHEDULE OF AVAILABILITY OF SERVICES: Mondays to Fridays
from 8:00 A.M. - 5:00 P.M.

Cut off period for submission of applications: 3 working days prior to scheduled PEZA Board meeting (NOTE:
The PEZA Board meets twice a month, usually on the 2 of the month).

nd

th

and 4 week

WHAT ARE THE REQUIREMENTS?

1. Letter request stating reason(s) for cancellation/temporary closure/delisting of

registration/registered activity indicating effectivity date;
2. Total number of affected workers and status of all production lines indicating the following: (a)
Total number of workers per production line; (b) Total number of administrative personnel; (c)
Production line affected (what will happen/happened to the workers assigned in the specific
production lines);
3. Certified list of machinery/equipment (indicating therein the date of acquisition, acquisition cost
and net book value), raw materials, inventories and other properties, duly signed by the
company’s highest responsible official;
4. Description of building to be disposed and mode of disposition (as applicable);
5. Notarized undertaking signed by the company’s highest responsible official stating that: (a) All
terminated/affected workers/employees will be paid of all monies and benefits due them (If all
affected workers have been paid all monies due them, submit proof of payment, e.g. quit claims,
payroll); (b) The company has informed all its creditors of the cancellation/temporary
closure/delisting of registration/registered activity (as applicable); (c) The company renders PEZA
free and harmless from any liability/claim by third party in connection with its
cancellation/temporary closure/delisting of registration/registered activity (as applicable);
6. Copy of Board Resolution declaring the cancellation/closure of operations and designating its
authorized representative to handle the disposition of all properties (as applicable);
7. Copy of notice to all affected employees/workers before the effectivity date of the
cancellation/delisting/temporary closure of operations (NOTE: Notice should be duly received by
the workers 30 days before the effectivity date);
8. Copy of notice to the Department of Labor and Employment (DOLE) on the cancellation/closure
of operations, with proof of receipt thereof by said office indicating the date (as applicable);
 9. Clearance from the Department of Labor and Employment (DOLE), National Labor Relations
Commission (NLRC) and National Conciliation and Mediation Board (NCMB) stating that the
company has no pending labor case(s) filed by its workers (NOTE: Provide description and status
of labor case(s) if any);
10. Clearance from SSS and Philhealth stating that the company is up-to-date in remitting premiums
of its employees (as applicable);
11. Clearance from the Zone Administrator/Manager regarding: (a) The company’s PEZA
accounts/liabilities; (b) Whether the company has properly disposed of the waste
materials/garbage used in its operations in the zone; (c) The restoration/repair of any damage in
the SFB/lot space (applicable only to locators in the public ecozones leasing a PEZA SFB/lot);
12. Clearance from the Special Ecozone Developer (applicable only to locators in the private
ecozones); 13. Copy of latest audited financial statements and updated quarterly report on
operations; and
13. BIR tax certification of no outstanding tax liabilities (applicable only for cancellation of PEZA
registration).

DURATION:

1. 15 working days (subject to the submission of all required documents and information, and other
additional data as may be required by PEZA)

PROCESSING OF APPLICATION FOR CANCELLATION/TEMPORARY CLOSURE/DELISTING

OF PEZA REGISTRATION/REGISTERED ACTIVITY:

PROCEDURAL PROCESS FLOW FOR CANCELLATION/TEMPORARY CLOSURE/DELISTING

OF PEZA REGISTRATION/REGISTERED ACTIVITY:

STEP

DURATION OF ACTIVITY

APPLICANT/LOCATOR

SERVICE PROVIDER

Submit all documentary requirements as prescribed above

(a) Receive, log and endorse application to Enterprise Regulations Department (ERD) (b)
Evaluate application and Submit report to the PEZA Board

(Under Normal Circumstances)

(c) Review/Initial submitted draft/finalized

report and endorse to the DG/PEZA Board (d) Approve application 2 3

Receive copy of Board Resolution Submit documentary requirements as stated in the Board
Resolution
 Prepare and issue Board Resolution Evaluate submitted documentary requirements

10 working days (subject to the submission of all required documents and information, and other
additional data as may be required by PEZA)

5 working days 15 mins.

End of transaction

PERSON IN-CHARGE

FEES

FORMS/DOCUMENTS

none

Documentary requirements

none

Board Resolution

none

Documentary requirements

ODG Staff (Office of the Director General)

ERD Enterprise Service Officer ERD Department Manager ERSSG Group Manager DDG for
Operations PEZA Board OBS Staff (Office of the Board Secretary)

Zone Manager/ERD Enterprise Service Officer

PEZA Registration in the Philippines

Many foreign companies setting up export enterprises in the Philippines such as outsourcing and
offshoring operations may opt to register with PEZA for tax incentives. K&C’s team of experts
and consultants will assist in determining eligibility for PEZA registration and organize all
financial documents to be processed.
PEZA – Philippine Economic Zone Authority
Enterprises registered with the Philippine Economic Zone Authority (PEZA) may be entitled to
income tax holidays of four, six, or eight years. After that, they are subject to 5% tax on gross
income (sales less direct costs) in lieu of all local and national taxes. Enterprises that are registered
with the Subic Bay Metropolitan Authority (SBMA) or Subic Bay Freeport Zone, which
administers the economic zone established by the conversion of the former United States military
base in Subic, are also subject to the special 5% tax and cannot avail of tax holidays. Qualified
entities registered with the Clark Development Corporation and located in the Clark Freeport Zone
are entitled to similar incentives.
To obtain tax breaks and incentives offered by PEZA, an enterprise must register with PEZA and
locate their operation in one of the PEZA zones, buildings, IT Parks, or Technology Parks. PEZA
registrants must generally be export-oriented. Enterprises located inside the zones are required to
export 100% of their production. In some cases, PEZA may approve the sale of up to 30% of
production in the domestic market. Full foreign ownership of a PEZA enterprise is allowed,
provided they are not engaged in activities that appear on the Foreign Investment Negative List.
PEZA approval and specific incentives granted are on a case by case basis. Applicants must supply
an application for providing information on capital structure, nationality of investors, and a
feasibility report in accordance with a PEZA-prescribed format. Applicants can expect a fast turn-
around once the application is submitted.

Our consultants will perform the following:

 Determine eligibility for PEZA
 Process all required documents for PEZA
 Identify a PEZA building for you
 Register your new company with PEZA

Documentary Requirements
1. Project brief – the completion of the project brief entails the submission of additional
documents relating to the statements made therein
2. Anti-graft certificate
3. Board Resolution authorizing the filing and designation of a representative
4. SEC Certificate of Registration, Articles of Incorporation and By-Laws (if not yet
available, submit draft of Articles of Incorporation)
5. Project Feasibility Study – information and documents necessary in the preparation of the
project feasibility study

General and Technical Data and Document

Requirements
 Parent company and product brochures
 Description of the new project (include description and uses of the service)
 Detailed organizational chart
 Project timetable
 Potential market, marketing costs, marketing program
 Service process and flowchart
 List of equipment, country of equipment origin, rated capacity, and corresponding costs
 Materials, their sources and prices; supply contracts, if any; ratio of imported to local
materials, if applicable
 Area requirement, office lay-out
 Equipment lay-out
  Electricity and water requirements
 Types and volume of wastes and waste disposal system
 Bio-data of principal officers
 Certificate of registration with the Securities and Exchange Commission; and
 Articles of incorporation

Financial Data and Document Requirements

 Number of employees, position and salary rates, training to be provided and length of
training, classification of employees as to a) skilled, semi-skilled, and unskilled, b) direct,
indirect, and administrative
 Number of foreign experts to be hired, positions, salary rates, length of stay
 Projected volume of sales, selling price, and unit of measure
 Breakdown of other dollar costs (interest on loans, salaries of foreign personnel)
 Number of workdays per year, number of shifts per day
 Sources of financing (please indicate whether loans to be obtained are foreign-currency-
denominated or not)
 Latest audited financial statements, if any; and
 Parent company’s latest volume and value of sales, net income, total assets, and number
of total employees, if applicable

PEZA Reportorial Requirements

“An ECOZONE Enterprise shall maintain distinct and separate books of accounts for its
operations inside the ECOZONE and shall submit financial and other reports/ documents to PEZA
on or before their respective due dates…” Rule XXI, Section 4 of the PEZA Rules and
Regulations to Implement R.A. No. 7916, as Amended
Where to Submit Reports: Enterprise Services Division
Report Type Due Date
Economic Zone Monthly Performance Report Every 20th day of the following
(EZMPR) month
90 Days after the end of the
Annual Report
accounting period
* Audited Financial Statement (AFS) 30 Days after filing with BIR
Quarterly Income Tax Returns (Including copy of O.R.
of payment of 3% of the 5% GIT to the BIR and the 15 Days after filing with BIR
O.R. of payment of 2% of the 5% GIT to the LGU)
Annual Income Tax Return (ITR) (Including copy of
O.R. of payment of 3% of the 5% GIT to the BIR and
the O.R. of payment of 2% of the 5% GIT to the 30 Days after filing with BIR
LGU)Breakdown/ Schedule of sales per
activity Breakdown and schedule of other income,
 data on revenues and taxes paid (Together with the
AFS & Annual ITR)
COA Annual Audit Report
Notice of Start of Commercial Operations 7 days after date
Replacement of Director/Member or Board officer 30 days after date
Amendment of Articles or By Laws 30 days after registration
Change of Name or equity ownership 30 days after change

Fines
Basic Fine Daily Fine
1st Violation P 500.00 P 50.00
2nd Violation 1,000.00 150.00
3rd Violation 2,000.00 200.00
Incentives may be withdrawn for non-compliance- basis of the incentives is PEZA registration
agreement
Penalties

1. Administrative Fines – The following schedule of fines and / or administrative sanctions

shall apply to all ECOZONE Enterprises and / or to any person or group of persons who
have committed violations of these Rules and pertinent circulars / memoranda issued
thereunder:
2. For late filing of financial statements, income tax returns, performance reports, annual
reports and all other reports / documents as specifically enumerated under Section 4 Rule
XXI or required under existing circulars of the PEZA:
Basic Fine Daily Fine
1st Violation P 500.00 P 50.00 
2nd Violation 1,000.00 150.00 
3rd Violation 2,000.00 200.00
Failure to wear or display openly the prescribed ECOZONE identification cards / passes:
1st Violation – Reprimand
2nd Violation – Confiscation of ECOZONE identification cards / passes with denial of access to
specific areas in the ECOZONE for ten (10) days
3rd Violation – Permanent confiscation of identification cards / zone passes with perpetual denial
of access to specific areas in the ECOZONE

3. For violation of Rules X and XI of these Rules: Inventory of Goods, Finished Products,
Materials and other assets/Entry and Exit of Goods)
1st Violation – a fine ranging from 50% to 100% of the value of the goods or merchandise
2nd Violation – a fine ranging from 101% to 150% of the value of goods or merchandise
3rd Violation – a fine ranging from 151% to 200% of the value of the goods or merchandise
For purposes of this rule, the value of the goods shall mean the average valuation appearing in the
invoices, commercial documents or records on file with the PEZA for the same or similar goods
or merchandise for the last three (3) years reckoned from the date of violation or in the absence
thereof, the latest CIF valuation of the Bureau of Customs on the subject goods or merchandise.

1. Suspension of Permits – The PEZA may suspend, withhold, disapprove or revoke import
or export permits, authority to engage in local sale, authority to farm-out, to avail of any
incentive or privilege being administered by the PEZA for failure to comply with these
Rules, any provision of the Registration Agreement between the PEZA and the
ECOZONE Enterprise, the terms and conditions of the permits / franchises issued by the
PEZA and / or for violation of the Act and the pertinent provisions of the Code and the
Decree within a stipulated or reasonable period of time.
2. Cancellation / Revocation – Registration, permit and / or franchise of an ECOZONE
enterprise may be cancelled for any of the following grounds:
3. Failure to maintain the qualifications of registration / permit / franchise as required.
4. Violation of any pertinent provision of the Act / Code and / or Decree; and
5. Violation of any of these Rules and Regulations, the corresponding implementing
memoranda or circulars or any of the general and specific terms and conditions of the
Registration Agreement between the PEZA and the ECOZONE enterprise or violation of
the terms and conditions of the permit / franchise issued by PEZA.
However, delay by the ECOZONE enterprise in the implementation of the timetable of its project
as set by the PEZA shall result in the automatic cancellation of the certificate of registration /
permit / franchise unless extended or a different period is set by the PEZA or these Rules.
The imposition of the above penalties shall be without prejudice to the assessment and collection
of customs duties and taxes and/or forfeiture in accordance with the applicable provisions of the
Tariff and Customs Code of the Philippines.

BASIC PEZA- ENTERPRISE REPORTORIAL COMPLIANCE

PHILIPPINES
APRIL 4, 2016

By: Azaleah Faeyugenia Chimmin

From year to year, newly registered companies have been registering with the Philippine Economic Zone
Authority (PEZA) for tax incentives it could enjoy, such as the following:
Income tax holiday for 4 to 6 years;
5% gross income taxation instead of 30% on taxable net income;
Value-added Tax (VAT) Zero-rating of local purchases;
VAT exemptions on importations; and,
Other non-fiscal incentives
Suffice it to say that the incentives of being a PEZA-registered entity in the Philippines is not automatic
and is based on qualifications with applicable requires and continuing compliance with registration terms
and conditions of such PEZA registration. Compliance of such requirements and reports to PEZA is being
monitored by PEZA and is used as basis for issuing certifications such as annual Certificate of Zero-
rating, and Certification of Incentives. Under this article, let us share you the basic continuing compliance
of periodic reports by a Philippines PEZA- registered entity:
PEZA Monthly Report Philippines
All Enterprise are required to submit an EcoZone Monthly Performance Report (EZMPR), last updated in
2014. This report contains information such as the following:
• on details of responsible officers
• number and salaries of employees
• amount of sales, importations and local purchases
• labor concerns and/ or cases
• power consumption
This report is filed on or before the twenty (20) days after the month being reported by manually
accomplishing the report within the Enterprise’s account or by uploading an already accomplished excel
form.
PEZA Quarterly Reports Philippines
Currently, there are two (2) reports being submitted to the PEZA – Quarterly Performance Report and
Quarterly Income Tax Return.
The Quarterly Performance Report (Form ERD.3.F.002) contains the following information:
• The same information as in the EZMPR but with more details
• Item of Farm-in and Farm-out
• Amount paid to telecommunications companies
This report is manually submitted to the PEZA office under the Enterprise Service Division (ESD) within
fifteen (15) days after the quarter of report.
A copy of the Quarterly Income Tax Return (BIR Form 1702Q) together with a copy of the Official Receipt
from the Local Government Unit (LGU) Office as proof of payment of LGU’s share of income tax, if any, is
submitted to PEZA-ESD within fifteen days after filing with the Bureau of Internal Revenue (BIR).
PEZA Annual Reports Philippines
The following are yearly reports submitted to the PEZA-ESD:
 Annual Report on Actual Operations (ERF.3.F.001)
This report contains information much like the Quarterly Performance Report but with the following added
details:
1. Balance Sheet and Income Statement
2. Percentage of Ownership based on nationality of stockholders
3. Details of Cost of Sales and Administrative Expenses
4. Amount of Incentives enjoyed
5. Details of Value-Added
6. Dollar Earnings and Cash Flow
7. Details of Taxes and Fees paid to the state
8. Details of Loans, Increase of Equity, Stockholders and Officers
9. Trainings attended by employees
10. Details of Equipment and/or Machinery directly used in the operation
Submission of this annual report should be made within ninety (90) days after the end of the year, fiscal
or calendar by manually filing with the PEZA-ESD office.
 Details of Other Income (ERD.3.F.003)
Just as implied by the name of the report, information disclosed in this report are details income, realize
and unrealized, from sources other than the registered activity/ ies.
 Data on Revenue and Taxes Paid (ERD.3.F.004)
Information contained in this report are amount of revenues earned by the Enterprise and the related
taxes paid for, if any.
 Breakdown/ Schedule of Sales Per Registered Activity (ERD.3.F.005)
This report summarizes the amount of revenue earned and the number of units sold from each of the
Enterprises’ registered activities.
 Financial Statements and Annual Income Tax Return (BIR Forms 1702-RT, 1702-MX, 1702-EX)
Complete copies of the audited financial statements (AFS) received by the BIR and the Annual ITR filed
with the BIR are to be submitted to PEZA together with reports on Details of Other Income, Data on
Revenue and Taxes Paid, and Breakdown/ Schedule of Sales Per Registered Activity. Submission with
the PEZA should be made thirty (30) days after filing of the ITR and AFS with the BIR.
Penalty for non-compliance of PEZA reportorial requirements.
Non-compliance of the above reportorial requirements would result to Administrative Fines, suspension or
worse cancellation of registration. Hence it is indispensable that all PEZA-registered entities observe
requirements to continuously enjoy incentives that it may rightfully claim.
As such, we strongly suggest that you determine applicable PEZA reportorial requirements to your
registered activity with PEZA, educate and or train on how to comply PEZA reportorial requirements, and
strictly monitor such compliance for timely and proper compliance.
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