Republic Act No. 7227, otherwise known as the Bases Conversion Act of 1992, created the Bases Conversion Development Authority (BCDA), and while carrying out its primary mission, also accelerated the conversion and development of baselands as well as promoting the social and economic development of Central Luzon via the Subic Bay Metropolitan Authority (SBMA) and the Clark Development Corporation (CDC), whose sites are former US military facilities.
In April 2007, R.A. 9400 was signed amending R.A. 7227, declaring the 4,400-hectare Clark Air Base Proper as a Freeport Zone. This places Clark on equal legal footing with the Subic Freeport Area, especially in the areas of tax and other fiscal incentives which can be offered to current and potential locators.
Both SBMA and CDC grant essentially the same sets of incentives to registered Subic Bay Freeport (SBF) and Clark Freeport Zone (CFZ) enterprises. They are managed as separate custom territories, ensuring free flow of articles within the zones.
100% foreign equity is allowed for many types of industries including manufacturing, tourism and service-oriented businesses. Business must be located within either zone to qualify.