Doing Business in Cebu with PEZA Accreditation

February 4, 2014

Cebu, a thriving economic hub in the Philippines, offers a strategic location, robust infrastructure, and a business-friendly environment, making it an ideal destination for investors seeking to establish operations in the Visayas. With the Philippine Economic Zone Authority (PEZA) accreditation, businesses can access substantial fiscal and non-fiscal incentives, streamline operations, and tap into Cebu’s skilled workforce and growing industries. This article examines the benefits of setting up in Cebu with PEZA accreditation, detailing the advantages, processes, and opportunities for businesses aiming to succeed in this dynamic region.

Why Choose Cebu for Business Expansion?

Cebu’s economic vitality and strategic advantages position it as a premier destination for investment in the Philippines. The following points highlight why businesses should consider Cebu for their operations:

Economic Growth: Cebu remains one of the Philippines’ fastest-growing regions, with a 7.3% GDP growth rate in 2024, according to the Philippine Statistics Authority, driven by tourism, manufacturing, and IT-BPO sectors.
Strategic Location: Located in the heart of the Visayas, Cebu offers proximity to international airports, seaports, and major tourist destinations, facilitating efficient logistics and market access.
Skilled Workforce: Cebu’s universities and technical schools produce over 30,000 graduates annually, providing a steady supply of experienced professionals in engineering, IT, and business services.
Infrastructure Development: Investments in infrastructure, such as the Mactan-Cebu International Airport and the Cebu-Cordova Link Expressway, enhance connectivity and business operations.
Tourism Synergy: Cebu’s status as a top tourist destination, with over 2.5 million visitors in 2024, supports industries like hospitality, retail, and medical tourism.
PEZA Economic Zones: Cebu hosts multiple PEZA-accredited zones, including Mactan Economic Zone 1 (MEZ1), Mactan Economic Zone 2 (MEZ2), and Cebu Light Industrial Park, offering tailored facilities for various industries.

What Are the Benefits of PEZA Accreditation?

PEZA accreditation provides a range of incentives designed to attract foreign and domestic investors to the Philippines. These benefits enhance profitability and operational efficiency, as outlined below:

Income Tax Holiday (ITH): PEZA-registered businesses enjoy a 4-to-6-year income tax holiday, reducing initial tax burdens and boosting cash flow.
Special Corporate Tax Rate: After the ITH, companies pay a 5% tax on gross income instead of all national and local taxes, significantly lowering tax liabilities.
Duty-Free Imports: Equipment, raw materials, and supplies imported for operations are exempt from customs duties, reducing production costs.
VAT Exemption: PEZA-registered enterprises benefit from zero-rated value-added tax on local purchases, further enhancing cost efficiency.
Non-Fiscal Incentives: Streamlined visa processing for foreign employees and simplified import/export procedures improve operational flexibility.
Access to Modern Facilities: PEZA zones offer state-of-the-art infrastructure, including reliable power, water, and telecommunications, ensuring seamless operations.

Which Industries Thrive in Cebu’s PEZA Zones?

Cebu’s PEZA zones support diverse industries, catering to both traditional and emerging sectors. The following industries are particularly well-suited for investment:

Electronics and Semiconductors: MEZ1 and MEZ2 host major players in electronics manufacturing, producing components for global markets.
IT and Business Process Outsourcing (BPO): Cebu’s IT-BPO sector, which will employ over 150,000 workers in 2024, thrives in PEZA zones with dedicated IT parks.
Automotive Supplies: Cebu Light Industrial Park companies manufacture automotive parts, leveraging skilled labor and proximity to shipping routes.
Renewable Energy: PEZA now supports solar and wind energy projects, aligning with the Philippines’ 2025 renewable energy targets.
Medical Tourism: Facilities in PEZA zones cater to medical tourism, offering services like cosmetic surgery and wellness treatments.
Fintech and AI: PEZA’s support for innovation-driven enterprises benefits emerging tech sectors, including fintech and AI-driven services.

How to Secure PEZA Accreditation in Cebu?

Obtaining PEZA accreditation involves a structured process that requires careful preparation and compliance with regulatory requirements. The steps below outline the key stages:

Prepare Required Documents: Submit a letter of intent, feasibility study, SEC business registration, business plan, and proof of financial capacity to PEZA.
Choose a PEZA Zone: Select a suitable economic zone in Cebu, such as MEZ1 (80 hectares, operated by PEZA), MEZ2 (63 hectares, operated by Aboitiz Land), or Cebu Light Industrial Park (62 hectares, privately managed).
Submit Application: Apply with PEZA’s Investment Promotion Unit, ensuring all documents meet current guidelines, including those updated under the CREATE Act 2021.
Evaluation and Approval: PEZA reviews the application within 20–30 days, assessing the project’s economic impact and compliance with environmental standards.
Secure Permits: Obtain necessary permits from the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), and Bureau of Internal Revenue (BIR).
Begin Operations: Upon approval, set up operations in the chosen PEZA zone, adhering to compliance requirements for incentives eligibility.

What Are the Challenges and Solutions for PEZA Compliance?

Navigating PEZA accreditation and maintaining compliance can be complex, requiring expert guidance to avoid costly errors. The following points address common challenges and how Triple i Consulting addresses them:

Complex Documentation: The application process involves extensive paperwork, including feasibility studies and SEC filings, which can overwhelm businesses. Triple i Consulting streamlines document preparation, ensuring accuracy and compliance.
Regulatory Changes: The CREATE Act and Department Order No. 248, 2025 Series introduced new tax and visa requirements. Triple i Consulting’s experts stay updated on these changes and guide clients through compliance.
Visa Processing: Securing 47(a)(2) visas for foreign employees within PEZA’s 10-day window is challenging. Triple i Consulting expedites visa applications, leveraging its ISO 9001:2008 certification.
Compliance Risks: Non-compliance, such as failing to secure an Alien Employment Permit, can result in PHP 10,000 fines from the Department of Labor and Employment (DOLE). Triple i Consulting conducts audits to ensure adherence.
Environmental Standards: PEZA requires adherence to complex environmental regulations. Triple i Consulting assists with compliance, including securing Environmental Compliance Certificates.
Operational Setup: Establishing operations in PEZA zones requires coordination with multiple agencies. Triple i Consulting provides end-to-end support, from registration to setup, ensuring a seamless process.

The complexity of PEZA accreditation underscores the importance of partnering with a trusted provider like Triple i Consulting. With over a decade of experience and a proven track record with major clients, Triple i Consulting simplifies the process, mitigates risks, and ensures businesses maximize PEZA benefits.

What Is the Future of PEZA Investment in Cebu?

Cebu’s PEZA zones are poised for continued growth and are driven by global trends and government support. The following points highlight the future potential for investors:

Sustainability Focus: PEZA’s 2025 initiatives prioritize green industries, with incentives for renewable energy and eco-friendly manufacturing, aligning with global sustainability goals.
Digital Transformation: The rise of AI, fintech, and IT-BPO in Cebu’s PEZA zones supports the Philippines’ goal to become a regional tech hub by 2030.
Infrastructure Expansion: Ongoing projects, such as the Mactan-Cebu International Airport Terminal 2 expansion, enhance Cebu’s connectivity, attracting more investors.
Medical Tourism Growth: Cebu’s medical tourism sector, supported by PEZA, is projected to grow by 15% annually, driven by demand for affordable healthcare services.
Foreign Investment Surge: The Philippines’ pro-investment policies, including PEZA’s streamlined processes, are expected to attract $10 billion in foreign direct investment by 2026.
Workforce Development: Cebu’s focus on upskilling, with programs like the Technical Education and Skills Development Authority (TESDA), ensures a steady talent supply for PEZA-registered businesses.

Wrapping Up

Cebu’s dynamic economy, strategic location, and robust infrastructure make it an attractive destination for businesses seeking growth in the Philippines. PEZA accreditation enhances these advantages, offering tax incentives, modern facilities, and access to a skilled workforce across diverse industries, from electronics to medical tourism. By navigating the complexities of PEZA registration and compliance, businesses can unlock significant opportunities in Cebu’s economic zones. Triple i Consulting, with its expertise and ISO 9001:2008 certification, stands ready to guide investors through this process, ensuring success in this vibrant market.

Is Assistance Available?

Yes, Triple i Consulting offers comprehensive support for PEZA accreditation and compliance. Contact us today to schedule an initial consultation with one of our experts: