Special Economic Zone

-selected highly developed areas in the country or areas that has potential of being developed I to
industrial, commercial, investment and financial centers.
- an industrial estate, free trade zone, export processing zone, tourist, financial banking, all business.
Industrial estate
-part or component of special economic zone.
- devoted to various industries (manufacturing, processing)
-residential subdivisions
Eco Zone – ang ibang eco zone not successful dahil walang nag lolocate, masyadong malayo
-Free trade zone
-industrial estate
-export processing zone
Laguna- successful eco zone
Subic- free trade zone
Clark – free trade zone
 Most of the buildings that house BPO's are eco zone.
PEZA- governing body incharge of development of economy.
BPO- appeal incentives
 Almost 99% of BPO's are located in an eco zone because they enjoy fiscal incentives
Fiscal incentives
-Income tax holiday – for pioneering enterprises for 6 yrs.
Pioneering enterprises- purpose is for the production and processing of goods and services that are
not available in the commercial institutions in the PH.
- They locate their business in an eco zone in nature of which nobody has been into it yet.
- When your business nobody has ventures yet you will enjoy longer period of tax holiday.
Non pioneering – enjoy lesser period
Q: Does all industries enjoys fisca and non fiscal incentives?
A: not necessarily
 Bago pa magkaroon ng Special Economic Zone Act, sa Northern Mindanao meron nang
Philippine Veterance Development Company
 When PH Dev. Co enacted by the Congress it was a corporate body, there are many invetors
from manila because they enjoy tax holiday, gross income taxation.
 Carmona- toilet bowl of the PH
 Corporate income is based on net income
  Gross income taxation is based on net income
 The PEZA has strongly objecting to the Corporate Income Reform Law
Corporate Income Tax Reform- wants to remove the incentive under Special Eco Zone.
Non fiscal incentive
-employment of foreign national
-special non immigrant visa granted to the officers and employees, spouses and their dependent
children under 21 yrs old

Employment of foreign National

Japanese investor decline to pay his business in an eco zone. What is the max. percentage that
eco zone acts allows the foreign investor to employ his compliant.
A: 5% , pwedeng mag exceed ng 5% with the express approval of the secretary of the department
 The foreign national you admit, they cannot stay forever, after a certain period of time max. of
5 yrs they should be able to transfer expertise to the contract.
 Iligan Cagayan- all investment ay puro eco zone.
Which of the following incentives available to a locator in an eco zone is non fiscal incentive?
A. Duty free importation
B. Tax holiday
C. Gross income Taxation
D. Foreign exchange remittance
E. Answer not given

Q: Foreigners cannot own lands in the country but they can enter in a contract of lease. Under eco
zone act for how long the foreign investor lease tract of land inside industrial estates?
A: max of 50 yrs, renewable only once, for 25 yrs.