Philippine Foreign Direct Investment & Manufacturing Guide

Invest in the Philippines: Manufacturing & Trade Guide

The Philippines is a high-growth industrial manufacturing and export hub in Southeast Asia. International brand owners, industrial enterprises, and institutional buyers benefit from 100% foreign equity ownership in export manufacturing, competitive labor demographics, modernized fiscal incentives under the CREATE MORE Act, and zero-tariff market access through EU GSP+ and RCEP agreements.

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CREATE & CREATE MORE Act Fiscal Incentives

The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and the CREATE MORE (Maximizing Opportunities for Reinvigorating the Economy) Act provide globally competitive tax packages for registered export manufacturers.

Income Tax Holiday (ITH)

4 to 7 Years

Registered export manufacturing enterprises receive 100% exemption from corporate income tax for 4 to 7 years, determined by location and industry tier under the Strategic Investment Priority Plan (SIPP).

5% Special Corporate Tax

Up to 10 Years

Following the ITH period, export enterprises can opt for a 5% Special Corporate Income Tax (SCIT) based on gross income earned, in lieu of all national and local taxes, or choose Enhanced Deductions (ED).

Duty-Free Capital Imports

0% Tariff

Full customs duty exemptions on the importation of capital equipment, factory machinery, industrial spare parts, and raw materials directly used in export production.

VAT Zero-Rating & Exemption

VAT Exemption

0% VAT on local purchases of goods and services directly and exclusively used in registered export manufacturing activities, alongside complete VAT exemption on raw material imports.

Investment Promotion Agencies (IPAs) & Economic Zones

Foreign investors operate within dedicated special economic zones (ecozones) and freeport authorities providing one-stop government administration, simplified building permits, and fast-track customs clearance.

PEZA Ecozones

400+ Zones

The Philippine Economic Zone Authority (PEZA) administers over 400 manufacturing, agro-industrial, and IT economic zones with 24/7 on-site customs examiners and dedicated police protection.

Board of Investments

National BOI

The Board of Investments (BOI) under the Department of Trade and Industry (DTI) grants incentives for projects situated both inside and outside special economic zones across the country.

Clark & Subic Freeports

Central Luzon

Subic Bay Metropolitan Authority (SBMA) deep-water port and Clark Development Corporation (CDC) airport logistics cluster offer self-contained tax-free enclaves with direct aviation and container shipping access.

Mindanao Eco Corridors

Southern Growth

Davao Gulf and Northern Mindanao economic zones connect direct agro-industrial and garment manufacturing plants directly to the Davao International Container Terminal (DICT).

Apparel & Textile Manufacturing Capabilities

PHShirt operates as a full-scale OEM/ODM garment manufacturer and contract apparel supplier in the Philippines. We combine precision pattern engineering, modern cut-and-sew production lines, and export-grade embellishments with direct access to top domestic blank brands.

International partners sourcing or establishing supply chains in the Philippines benefit from our turn-key manufacturing, automated fabric spreading, screen printing, industrial embroidery, and international logistics coordination.

  • OEM / ODM Custom ManufacturingComplete tech pack execution for heavyweight streetwear, corporate uniforms, activewear, sports jerseys, and institutional apparel.
  • Export Trade Compliance & REXFull compliance with EU GSP+ zero-duty rules under the Registered Exporter (REX) scheme, EORI customs verification, and the German Supply Chain Act (LkSG).
  • Ethical Labor & Sustainable ProductionFair labor practices, safe factory conditions, OEKO-TEX standard compliant dyeing, and GOTS organic cotton garment processing.

Foreign Ownership & Legal Framework

Key legal statutes governing international corporate establishment, capital entry, and foreign equity protection in the Philippines.

Foreign Investments Act

100% Equity

Under Republic Act No. 11647 (Amended Foreign Investments Act), foreign investors can own up to 100% equity in export manufacturing enterprises and domestic enterprises not included in the Foreign Investment Negative List (FINL).

Green Lanes (EO 18)

Fast Track

Executive Order No. 18 establishes Strategic Investment Green Lanes across all government agencies and local government units, guaranteeing expedited processing of business permits, licenses, and customs clearances.

One Person Corporation

Flexible Entity

The Revised Corporation Code permits foreign individual investors to form a One Person Corporation (OPC) without requiring a minimum number of incorporators or board directors.

Double Taxation Treaties

40+ Treaties

The Philippines maintains bilateral double taxation avoidance agreements (DTT) with over 40 countries, including Germany, the United States, Japan, the United Kingdom, and Australia, capping withholding taxes on dividends and royalties.

Logistics Infrastructure & Export Gateways

Direct container shipping corridors and international air cargo hubs link Philippine manufacturing clusters to global consumer markets.

International Ocean Container Seaports

  • Davao International Container Terminal (DICT): Premier modern deep-water container terminal in Panabo City, Davao Gulf. 15-meter draft accommodating post-Panamax container vessels with direct feeder loops to Singapore and Colombo connecting to Europe (Port of Hamburg).
  • Port of Manila (MICT & South Harbor): Flagship international gateway processing over 4.5M TEUs annually with high-frequency sailings across European, American, and intra-Asian trade routes.
  • Batangas International Port & Subic Bay (SBITC): Strategic deep-water bypass ports serving Southern and Central Luzon industrial zones with direct customs release.

International Air Cargo Gateways

  • Ninoy Aquino International Airport (MNL / NAIA): Central air cargo hub hosting daily scheduled widebody flights and dedicated freighters connecting to Frankfurt (FRA), Munich (MUC), and global air freight hubs.
  • Clark International Airport (CRK Cargo Hub): 24/7 dedicated freighter ramp facilities and Asia-Pacific hub operations for global integrators (FedEx, DHL, UPS).
  • Davao Airport (DVO) & Mactan-Cebu (CEB): Regional air gateways linking Southern and Central Philippine manufacturing plants with scheduled international air waybill connections.

Invest in the Philippines: FAQ

Common questions on foreign investment rules, corporate registration, tax holidays, and manufacturing setup.

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Can foreigners own 100% of a manufacturing business in the Philippines?

Yes. Under the Foreign Investments Act (RA 11647), foreign investors can own up to 100% equity in export manufacturing enterprises (enterprises exporting at least 60% of their output) and in domestic market enterprises that meet minimum paid-in capital criteria.

What tax incentives are available under the CREATE MORE Act?

Qualifying export manufacturers can receive a 4 to 7 year Income Tax Holiday (0% corporate income tax), followed by up to 10 years of 5% Special Corporate Income Tax (SCIT) on gross income or Enhanced Deductions, duty-free importation of capital equipment and raw materials, and 0% VAT on local purchases.

How does PEZA registration benefit export manufacturers?

PEZA economic zones provide simplified one-stop registration, automated electronic customs clearance with on-site customs examiners, duty-free import of equipment, 0% VAT on local utilities and supplies, and simplified visa processing for foreign expatriate managers and technicians.

Can apparel manufactured in the Philippines enter the European Union duty-free?

Yes. Under the European Union Generalized Scheme of Preferences Plus (EU GSP+), qualifying apparel manufactured in the Philippines enters Germany and all 27 EU member states at 0% customs duty when supported by an approved Registered Exporter (REX) declaration of origin.

How can international buyers start OEM/ODM manufacturing with PHShirt?

International buyers can contact our export desk directly with their garment specifications, tech packs, target volumes, and delivery destinations. We provide sample development, lab dips, size grading, custom embellishments, and FOB, CIF, or DDP quotation.

Start Your Manufacturing & Sourcing Partnership

Connect with our Philippine manufacturing desk to discuss contract apparel production, custom garment lines, and supply chain solutions.

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Official Investment Authorities & Legal Frameworks

Last reviewed: 2026-09-07. Investment regulations, fiscal incentives, and statutory frameworks verified against official Philippine Board of Investments, PEZA, and Bureau of Internal Revenue guidelines.