Foreign Direct Investment Philippines

Foreign direct investments in the Philippines have reached record levels over the last five years. Year by year, the Philippines has seen an increased number of companies interested in setting up a presence in the country. The highest number of foreign direct investments in the Philippines has been in the call center and/or BPO sector. In order to attract BPO players to set up office in the country, the Philippine government has placed the BPO industry on top of their priority plan. Special incentives have granted for companies that are operating in the ITES, BPO and KPO sector and that are setting up office in the Philippines.

Companies interested in foreign direct investments in the Philippine call center and/or BPO industry can have the following two government incentive options:

Government Investment Incentives

The Philippine Export Zone Authority (PEZA) grants investors that are locating their ITES, BPO, KPO or call center operation within a PEZA zone and/or PEZA registered building a number of incentives which include tax breaks and significantly reduced tax (e.g. import of IT equipment etc.). PEZA makes a distinction between pioneer status and non pioneer status. Companies with pioneer status enjoy longer tax breaks than companies without it.

Apart from PEZA, companies also have the option to file for additional b government incentives granted by the Board of Investments (BOI) in the Philippines. The incentives are almost identical. Companies registering their foreign direct investments in the Philippines with BOI can locate their offices anywhere in the Philippines and are not bound to certain IT zones or buildings.

Additionally, the PEZA incentives are in general a bit more comprehensive than those granted by the BOI. The rent for a location within a PEZA zone is usually significantly higher than rent in buildings located outside of PEZA zones or registered buildings.