In the world of tourism development, incentives can make or break a destination’s ability to attract the right kind of investment. Recognizing this, the Philippines-through the Tourism Act of 2009 (RA 9593)-established Tourism Enterprise Zones (TEZs) as investment-friendly areas where tourism is prioritized, incentivized, and master-planned for sustainability.
For investors, developers, and stakeholders eyeing opportunities in places like San Vicente, Palawan, understanding the proposed incentives for TEZs is essential. These incentives are designed not just to lower the cost of doing business, but to encourage long-term, responsible, and inclusive growth.
This article outlines the fiscal and non-fiscal incentives available for TEZ developers and operators, and why San Vicente-especially as a Flagship TEZ-offers one of the most attractive investment climates in the Philippine tourism sector.
The Legal Foundation: Tourism Act of 2009 (RA 9593)
Republic Act No. 9593, or the Tourism Act of 2009, empowers the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) to register and oversee TEZs. One of TIEZA’s core mandates is to grant incentives to tourism enterprises within these zones, helping them thrive while contributing to national economic growth.
The law aims to transform the Philippines into a premier tourism destination by encouraging private investment in sustainable, world-class tourism developments.
Who Qualifies for TEZ Incentives?
The following entities may apply for incentives:
- Registered Tourism Enterprises (RTEs) operating within a TIEZA-approved TEZ
- TEZ Developers and Operators responsible for managing and implementing the zone’s master plan
Eligibility depends on:
- Compliance with the TEZ master plan
- Alignment with national tourism goals
- Investment thresholds (based on TEZ classification)
- Endorsements from the Department of Tourism (DOT)
Fiscal Incentives for TEZs
1. Income Tax Holiday (ITH)
Eligible businesses may enjoy an income tax holiday of up to 6 years. This incentive helps businesses stabilize financially during their formative years, boosting long-term viability.
2. Gross Income Taxation (Post-ITH)
After the ITH expires, enterprises may be taxed at 5% of gross income in lieu of all national and local taxes. This simplifies tax compliance and lowers the effective tax burden.
3. Exemption from Customs Duties and National Taxes
TEZ-based enterprises may import capital goods, equipment, transportation vehicles, and construction materials duty-free and tax-exempt, provided these are directly related to the tourism operation.
4. Tax Credit for Taxes Paid
When goods are sourced locally (instead of being imported), the equivalent local taxes paid may be credited against future tax obligations, encouraging support for domestic suppliers.
5. Accelerated Depreciation
Capital assets may be depreciated at twice the normal rate, which provides faster returns and reduces taxable income during the early years of operations.
Non-Fiscal Incentives for TEZs
1. Visa Assistance and Immigration Support
Enterprises employing foreign nationals or catering to international markets may benefit from:
- Multiple-entry visas for investors and foreign staff
- Special work permits and visa processing assistance
- Extended stay for expatriates and retirees
2. Special Investor’s Resident Visa (SIRV)
Qualifying investors may apply for an SIRV, which allows them to reside in the Philippines indefinitely, provided they maintain their investments within the TEZ.
3. Streamlined Business Registration and Licensing
TIEZA facilitates faster approvals by coordinating with relevant government agencies. TEZ locators often benefit from one-stop-shop processing, especially in Flagship TEZs like San Vicente.
4. Infrastructure Prioritization
Public infrastructure-such as roads, ports, and utilities-are prioritized for TEZs. Flagship TEZs receive direct government support to implement critical infrastructure outlined in the master plan.
5. Access to Technical Assistance and Investment Promotion
TIEZA promotes TEZs both locally and internationally, helping investors find joint ventures, market opportunities, and expert partners for feasibility studies, architecture, and operations.
San Vicente’s Edge: Flagship TEZ Incentive Advantage
As a Flagship TEZ, San Vicente is not only eligible for all standard incentives but also enjoys several strategic advantages:
- TIEZA-led planning ensures quicker approval of Registered Tourism Enterprises
- Master-planned infrastructure, like zoned resorts, commercial districts, and eco-tourism corridors
- Government-backed investment promotion in global forums and expos
- Early investor access to prime parcels of land in areas like Long Beach, Port Barton, and the Mercato Shophouse District
- Environmental and cultural safeguards that support ESG compliance for international investors
Types of Projects That May Qualify for Incentives
Projects eligible for TEZ incentives include, but are not limited to:
- Resorts and hotels
- Adventure and ecotourism parks
- Medical wellness tourism
- Agri-tourism farms
- Marinas and dive centers
- Heritage and cultural tourism complexes
- Retail, dining, and mixed-use commercial centers
The key criterion is that the project must be aligned with the TEZ’s Master Plan and zoning-in San Vicente’s case, the Conceptual Tourism Master Plan (CTMP) developed by TIEZA and Palafox Associates.
Requirements for Registration
To apply for TEZ incentives, developers or businesses must submit:
- A detailed Feasibility Study
- Business and investment plans
- Proof of capitalization
- Environmental Compliance Certificate (ECC)
- Location and project permits
- Certification of alignment with the TEZ Master Plan
TIEZA evaluates applications based on economic viability, sustainability, community inclusion, and environmental impact.
Why Now Is the Best Time to Invest in San Vicente
As the San Vicente Flagship TEZ enters its implementation phase, first-mover investors have the opportunity to:
- Secure premium beachfront and tourism-zoned land
- Benefit from government infrastructure rollouts
- Tap into a high-growth ecotourism destination
- Enjoy a complete package of incentives with minimal bureaucratic delay
With San Vicente being awarded as the 8th Best Planned Tourism Project in the World by the Royal Town Planning Institute (RTPI), its future as a global destination is not just a vision-it’s a strategic reality in motion.
Insights
Incentives are more than tax breaks-they are signals of opportunity. The Philippine government, through TIEZA, is inviting responsible, visionary investors to take part in shaping the country’s next world-class destination. San Vicente is ready-with land, plans, infrastructure, and people-waiting for partners who believe in sustainable, inclusive tourism.
Invest early. Build wisely. And be part of San Vicente’s transformation.