Legal BlogPEZA or TIEZA: Where to Register your Tourist Market Enterprise?

April 1, 2013

The foregoing question has been bugging me over the last few weeks because I chanced upon a Board Resolution issued by the Philippines Economic Zone Authority (PEZA) that prospectively revoked fiscal incentives given to developers and locators of Tourism Economic Zones (TEZ) in Metro Manila, Cebu City, Mactan Island (Cebu) and Boracay Island. Why would they do that? At first glance, it would seem to effect discouragement to potential investors in the said areas. Note that the following locations are the prime tourist destinations over the past year. To clarify, I inquired PEZA over the same concern and they confirmed to me the issuance of the said resolutions further clarifying that existing developers and locators in a TEZ is not a subject of the recent issuance. They, moreover, elaborated that their office still accepts application for TEZ registration but no longer for the aforementioned locations.

So that settles it.

However, I was able to get hold of magazine which was all about investing in Tourism Enterprise Zones (TEZ) under the Tourism Infrastructure and Enterprise Zone Authority (TIEZA). Notice that PEZA and TIEZA seems to be marketing two services with the same target market. There has to be a difference.

According to PEZA, they just gave me this very broad explanation as to their jurisdiction: When the target enterprise is located in economic zones or seeks to register a new economic zone, then PEZA rules governs. Notice that I mentioned earlier that it is a very broad explanation.

Under the Tourism Act of 2009 TIEZA shall have jurisdiction over the establishment of TEZ which may be any geographic area that is conforming to the following criteria:

a.)   The area is capable of being defined into one contiguous territory;

b.)   It has historical and cultural significance, environmental beauty, or existing or potential integrated leisure facilities within its bounds or within reasonable distances from it;

c.)   It has, or it may have, strategic access through transportation infrastructure, and reasonable connection with utilities infrastructure systems;

d.)   It must be at least five (5) hectares and sufficient in size, such that it may be further utilized for bringing in new investments in tourism establishments and services. Provided that, in extremely meritorious cases, an area less than five (5) hectares may be developed as a TEZ if the Board deems it sufficient for the purposes, requirements and nature of the tourism project to be undertaken therein;

e.)   It is in a strategic location such as to stimulate the sustainable socioeconomic development of neighboring communities.

f.)    The area must be situated where controls can easily be established to curtail illegal activities.

Analyzing the foregoing criteria, it may be safe to state that Metro Manila, Cebu City, Mactan Island (Cebu) and Boracay Island discerning investors may have a second option after all. Just contact us should you need assistance in deciding where to invest your tourism market business.

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