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All about Tourism Enterprise Zones

Do you have at least five (5) hectare property that is located in or close to a tourist attraction or destination and can be developed for tourism – related projects? Read more….

All about Tourism Enterprise Zones (TEZs) under TIEZA

Frequently Asked Questions

What are Tourism Enterprise Zones (TEZs)?

TEZs can be any geographical area in the country that conforms 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.

e.) It is in a strategic location such as to stimulate the sustainable socio-economic development of neighboring communities;

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

TEZs that will be established in any of the least developed areas identified in the annual Investment Priorities Plan (IPP) are highly encouraged and shall be given priority.

How big should a TEZ be?

A TEZ should 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. In extremely meritorious cases, TIEZA may allow a TEZ to be less than five (5) hectares if the TIEZA Board deems it sufficient for the purpose of the tourism project.

What kinds of TEZs can be created?

Based on their particular purpose, TEZs can be classified into five (5):

a.) Cultural Heritage Tourism Zone– areas that will allow the tourist to experience the places, artifacts and activities that authentically represent the stories of the people living in the area, past or present.

The area may include, but will not be limited to:

1. Cultural landscapes;

2. Historic sites, areas and precincts;

3. Ruins, archaeological and maritime sites;

4. Sites associated with industrial, scientific and agricultural heritage;

5. Collections that house or collectively promote objects of heritage significance;

6. Historic places and areas, including villages, small towns, cities and parts of larger urban areas with significant cultural and heritage assets; and

7. Museums, Art Galleries, Cultural Centers, Art & Crafts Shops, and Antique Shops, and Cultural Sites

b. ) Health and Wellness Tourism Zone – areas that will allow visitors toavail of quality but affordable mainstream, traditional, or alternative healthcare services for treatment of illnesses and health problems in order to maintain one’s health and well-being.

The area may include, but will not be limited to enterprises that are, or offer:

1. Medical and Allied Services;
2. Spas;
3. Health Farms;
4. Counseling and Rehabilitation Services; and
5. Traditional Filipino Touch Therapy

c.) Eco-Tourism Zone - areas that will allow visitors to experience aform of sustainable tourism within a given natural and/or cultural area where community participation, conservation and management of biodiversity, respect for culture and indigenous knowledge systems and practices, environmental education and ethics as well as economic benefits are fostered and pursued for the enrichment of host communities and satisfaction of visitors.

The area may include, but will not be limited to:

1. Sites of scenic natural or rural beauty;
2. Areas for observing wildlife;
3. Areas for low impact activities such as camping, trekking, climbing, spelunking, diving, surfing, and other similar activities; and
4. Sites for observing and interacting with traditional or indigenous practices in relation to the environment

d.) General Leisure Tourism Zone – areas that may offer recreational facilities that will have high visitor density.

The area may include, but will not be limited to:

1. Golf Parks/Resorts;
2. Theme Parks and Amusement Centers;
3. Convention and Meeting Centers;
4. Sports Complexes/Resorts;
5. Event Centers/Resorts;
6. Department Stores/Restaurants/Shops; and
7. Zoos

e.) Mixed Use Tourism Zone – areas that will allow a combination of some or all of the features of the aforementioned zones within one area.

Retirement communities and facilities duly accredited by the Philippine Retirement Authority may be located in General Leisure Tourism Zones, Health and Wellness Tourism Zones and Mixed-used Tourism Zones.

How much is the minimum amount of investment required to create a TEZ?

To avail of the incentives from TIEZA, a minimum amount of Five Million US Dollars (US $5,000,000.00), exclusive of land acquisition costs, is required. In the case of Cultural Heritage Tourism Zones or Eco-Tourism Zones, a lesser amount may be invested for as long as TIEZA deems it sufficient for the purposes, requirements and nature of the tourism project to be undertaken.

Who are eligible to apply for the designation of an area as a TEZ?

Any entity duly incorporated under the Corporation Code and other relevant laws, or any LGU or any other instrumentality of government in the pursuit of their mandate may qualify as an applicant for the designation of an area as a TEZ.

What are the requirements needed for application for a TEZ?

Upon application, the proponent must submit the following document requirements:

a.) Duly accomplished TIEZA Application Form;
b.) Securities and Exchange Commission Registration Certificate, copies of the articles of incorporation and by-laws; in case of a joint venture, a copy of the joint venture agreement;
c.) Company Profile, containing basic data/ information on its technical, financial, marketing and management capability/ competence to undertake the proposed project;
d.) Resolution of the applicant's board of directors authorizing the filing of the application and the designation of their authorized representative to TIEZA; list of its directors, principal officers, and major stockholders, including their respective bio-data.

In the case of an instrumentality of the national government acting in pursuit of its mandate and/or a local government unit an authority from the Head of Agency or Local Chief Executive authorizing the filing of the application and the designation of their authorized representative to TIEZA;

e.) Vicinity Map reflecting various land uses, important verifiable landmarks within the five (5) kilometers radius of the project site, proximity to transportation and utilities infrastructure, and tourism focal points in the vicinity and their distances from the project site;

f.) Proof of land ownership and/ or Long-Term Lease Agreement(s) for a period of not less than twenty five (25) years on the entire area of the proposed TEZ;

g.) Land Use Conversion Clearance Certificate or its equivalent from the Department of Agrarian Reform (DAR);

h.) Endorsements from the National Historical Institute (NHI) in the case of Cultural and Heritage Tourism Zone, the Department of Environment and Natural Resources (DENR) in the case of Ecotourism Enterprise Zone, and from the Department of Health (DOH) in the case of Health and Wellness Tourism Zone;

i.) Other supporting documents/papers/clearances as may be required by the TIEZA depending upon the nature of the business and the type of business organization of the applicant.
Upon the approval of the application of a proponent as decided by TIEZA, the proponent shall submit the following documents prior to its designation.

a.) Resolution of the concerned LGU approving the development plan;
b.) Verified survey returns and technical description of the land area for the proposed TEZ;
c.) Environmental Compliance Certificate issued by the Department of Environment and Natural Resources (DENR);
d.) Financial statement for three (3) years for existing companies;
e.) Development Plan of the area which shall identify and include the following:

1. Tourism focal points and resources available within the proposed TEZ and adjoining areas;

2. Features which satisfy the requisites for the designation of a TEZ enumerated under Section 2, Rule II of these Rules;

3. Amount to be invested by the applicant in the area;

4. Areas for infrastructure development and the kind of development, for investment and the nature of investment, and for preservation and thesustainable activities allowed within preserved areas;

5. Public utilities to be operated within the TEZ;

6. Medium and long-term studies on market trends, and corresponding development strategies for the TEZ;

7. Studies on the economic impact of development within the TEZ and in surrounding communities;

8. Studies on the carrying capacity of the TEZ and surrounding communities;

9. Design plans for structures incorporating therein measures that should ensure the sustainable development of the area and the surrounding environment, to include the following; the civil and architectural plans that preferably incorporates Philippine design elements and cultural heritage, structural plans, electrical, mechanical, sanitation and design computations, cost estimates and specifications, financial schedules and construction timetable;

10. Energy efficiency and climate change mitigation measures to be adopted and implemented in the area; and

11. Compliance statement on Development Standards.TIEZA shall in coordination with the Department formulate and enforce development standards for the operation and maintenance of all facilities and structures to be built on all Tourism Zones. The development standards to be formulated and enforced shall be used as basis for the accreditation of tourism enterprises seeking to avail of the incentives under the Act. Such standards shall prescribe the minimum and progressive levels of operating quality and efficiency consistent with local and international standards, such as but not limited to the following:

a.) Infrastructure Requirements;
b.) Setback Requirements;
c.) Consumption of natural resources;
d.) Sewerage Disposal System;
e.) Surface Water Disposal;
f.) Safety and security;
g.) Site Coverage Density;
h.) Landscaping;
i.) Visual Security;
j.) Roads;
k.) Vehicle Parking;
l.) Waste Water Treatment; and
m.) Ventilation Requirements

f.) Other requirements as may be prescribed by the TIEZA Board.

How much is the application fee for TEZ designation?

The application fee for TEZ designation is Php 200,000. An additional of Php 100,000 will be collected as publication fee.

What are tourism enterprises?

Tourism enterprises are facilities, services and attractions primarily engaged in whole or in part in tourism and for the purpose of attracting visitors to and within the Philippines such as, but not limited to, facilities, services and attractions involved in tourism, such as but not limited to: travel and tour services; tourist transport services, whether for land, sea and air transportation; tour guides; adventure sports services involving such sports as mountaineering, spelunking; scuba diving and other sports activities of significant tourism potential; convention organizers; accommodation establishments, including but not limited to, hotels, resorts, apartment hotels or apartelles, condotels that cater to tourists, tourist inns, motels, pension houses, and home stay operators; tourism estate management services, restaurants, shops, and department stores, sports and recreational centers, spas, facilities offering health and wellness services, museums and galleries, theme parks, convention centers, zoos, and such other enterprises as may be identified by DOT or TIEZA.

Who are qualified to apply for the designation of a RTE?

Any person, firm, association, partnership, corporation, or any other form of business organization may apply for registration as a tourism enterprise to avail of incentives and benefits. Applications for registration shall comply with the applicable nationality, control and/ or ownership requirements of the working capital thereof in accordance with the pertinent provisions of the Philippine Constitution, Foreign Investments Act of 1991 as amended and other relevant existing laws and regulations.
What are the requirements to apply for the designation of a RTE?

The applicant for a Registered Tourism Enterprise shall submit the following documents:

Duly accomplished Application Form;
Securities and Exchange Commission’s Registration Certificate/Business Permit;
Company Profile, containing basic data / information on their technical, financial, marketing and management capability / competence to undertake the proposed project or business within the tourism enterprise zone;
Copies of articles of incorporation and by-laws;
Resolution of the applicant's board of directors authorizing the filing of the application; list of its directors, principal officers, and major stockholders, including their respective bio-data;
List of machinery and equipment to be used by the applicant with a statement of their capacity, ownership and/or mode of procurement;
Endorsement from the TEZ Operator;
Proposed site development plan and location map accompanied by a perspective drawing; construction timetable / financial schedule; detailed architectural and engineering plan; cost estimates and specifications;
Financial Statement for three (3) years for existing companies;
Other supporting documents / papers / clearances as may be required by the TIEZA depending upon the nature of the business and the type of business organization of the applicant.

Where does one apply for TEZ Designation or Tourism Enterprise Registration?

Application forms and requirement checklist could be downloaded from . Required documents must be submitted by the authorized company representative to the Tourism Infrastructure and Enterprise Zone Authority, T.F. Valencia Circle, T.M. Kalaw St., Rizal Park, Manila.

What is the TIEZA One-Stop Shop?

TIEZA has established a One-Stop Shop where prospective TEZ investors and tourism enterprises can register under a single window system to avail of incentives and benefits, including the issuance of all permits and visas. This will be available 24 hours, 7 days a week for the convenience of the investors.

What are the incentives to TEZ Operators and RTEs within a TEZ?

Fiscal Incentives to TEZ Operators and Registered Tourism Enterprises Within the TEZ
Income Tax Holiday

New enterprises in Greenfield and Brownfield Tourism Zones shall, from the start of business operations, be exempt from tax on income for a period of six (6) years.

The income tax holiday may be extended if the enterprise undertakes a substantial expansion or upgrade of its facilities prior to the expiration of the first six (6) years.

Existing enterprise in Brownfield Tourism Zone shall be entitled to avail of a non-extendible income tax holiday if it undertakes an extensive expansion or upgrade of facilities. The cost of such expansion or upgrade in relation to the original investment shall be considered in the grant of said incentive.

These enterprises shall be allowed to carryover as a deduction from the gross income for the next six (6) consecutive years immediately following the year of the loss, their net operating losses for any taxable year immediately preceding the current taxable year which had not been previously offset as deduction from gross income. Only such losses as have been incurred after registration may be carried over.

Gross Income Taxation

Except real estate taxes and such fees as may be imposed by the TIEZA, a new enterprise shall be exempt from payment of all national and local taxes and license fees, imposts and assessments.

In lieu thereof, it shall pay a tax of five percent (5) on its gross income earned which shall be distributed as follows:

One- third (1/3) to be proportionately allocated among affected cities or municipalities
One- third (1/3) to the national government; and
One- third (1/3) to TIEZA

Capital Investment and Equipment

Registered enterprises shall be entitled to an exemption of one hundred percent (100%) of all taxes and customs duties on importation of capital investment and equipment provided that these are directly and actually needed and will be used exclusively by the enterprises in its registered activity.

Transportation Equipment and Spare Parts

Importation of transportation equipment and the accompanying spare parts of new and expanding registered enterprises shall be exempt from customs duties and national taxes, provided that:

They are not manufactured domestically in sufficient quantity, of comparable quality and at reasonable prices;

They are reasonably needed; and

Shall be used exclusively by an accredited tourism enterprise.

Goods and Services

Importation of goods actually consumed in the course of services actually rendered by or through registered enterprises within a TEZ shall enjoy one hundred percent (100%) exemption from all taxes and customs duties: Provided, however, That no goods shall be imported for the purpose of operating a wholesale or retail establishment in competition with the Duty Free Philippines Corporation (DFPC); and
A tax credit equivalent to all national internal revenue taxes paid on all locally-sourced goods and services directly or indirectly used by the registered enterprise for services actually rendered within the TEZ.

Social Responsibility Incentive

TEZ Operators and Registered Tourism Enterprises shall be entitled to a tax deduction equivalent to fifty percent (50%) of the cost of environmental protection or cultural heritage, preservation activities, sustainable livelihood programs for local communities, and other similar activities as approved by the TIEZA Board.

Non-fiscal Incentives Available to TEZ Operators and Registered Tourism Enterprises

Employment of Foreign Nationals

A registered enterprise may employ foreign nationals in executive, supervisory, technical or advisory position for such reasonable periods and under such terms as may be provided by the TIEZA Board.

Special Investor’s Resident Visa

A foreign national who invests at least Two Hundred Thousand Dollars ($200,000.00) in a TEZ and/or a Registered Tourism Enterprise, his dependents, spouse and unmarried children under 18 years of age, shall be entitled to a special investor’s resident visa enabling the foreign national to reside in the Philippines while his or her investment subsists.

Subject to regulations to be issued by the Bureau of Immigration, the TIEZA shall issue working visas renewable every two (2) years to foreign personal and other aliens possessing highly-technical skills which no Filipino within the TEZ possesses, after they have secures Alien Employment Permits (AEP) from the Department of Labor and Employment (DOLE).

Foreign Currency Transactions

Subject to the provisions of Section 72 of Republic Act No.7653, as amended, otherwise known as the New Central Bank Act:

1. Repatriation of Investment

In case of foreign investments, the right to repatriate the entire proceeds of the liquidation of the investment in the currency in which the investment was originally made and at the exchange rate prevailing at the time of repatriation.

2. Remittance of Foreign Exchange

The right to remit earnings from a foreign investment in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance.

3. Foreign Loans and Contracts

The right to remit at the exchange rate prevailing at the time of remittance such sums as may be necessary to meet the payments of interest and principal on foreign loans and foreign obligations arising from technological assistance contracts.

Requisition of Investment

There shall be no requisition of the property of the TEZ Operator or the Registered Tourism Enterprise, except in the event of war or national emergency and only for the duration thereof. In such case, the affected person shall be entitled to just compensation, and shall have the right to repatriate such compensation as provided for in Section (3) above.

Lease and Ownership of Land

Without prejudice to existing laws regulating the ownership of land by individuals and corporations, and consistent with the provisions of Republic Act 7652, otherwise known as the Investor’s Lease Act, lands and buildings in each TEZ may be leased to foreign investors for a period not exceeding fifty (50) years, renewable once for a period of not more than twenty-five (25) years.

The leasehold right acquired under long-term contracts may be sold, transferred or assigned, subject to the conditions set forth under the Investor’s Lease Act.

Can Tourism Enterprises located outside of TEZs apply as a RTE?

Yes, but only existing accommodation establishments not located within a TEZ can be entitled to be a Registered Tourism Enterprise and claim incentives from TIEZA. Other Tourism enterprises may avail of incentives under the Omnibus Investments Code, provided that:

Tourism activities shall always be included in the Investment Priorities Plan;

Rules and regulations concerning the grant of incentives to tourism enterprises shall be jointly formulated by the Board of Investments and the Department;

The income tax holiday provide under Section 39.1 of the Omnibus Investments Code shall also apply to existing accommodation enterprises undergoing substantial upgrade of facilities; and

Accredited tourism enterprises shall be entitled to import transportation and accompanying spare parts free of taxes and duties provide:

i. It shall be exclusively used by the enterprise in its operations; and
Ii. They are not manufactured domestically in sufficient quantity, comparable quality and prices.

What incentives are available for RTEs outside TEZs?

Only an existing accommodation establishment not located within a TEZ shall be entitled to claim the following incentives:

Income tax holiday for up to six (6) years for any substantial expansion or upgrade of its facilities as long as the cost for the expansion or upgrade of its physical assets amounts to at least 50% of the original investment;

Import capital equipment free of taxes and duties when necessary for such expansion, renovation or upgrade.

For more information, please contact:

Tourism Infrastructure and Enterprise Zone Authority (TIEZA)
DOT Building, T.M. Kalaw St., Teodoro F. Valencia Circle, Ermita, Manila, Philippines 1000
Or: P.O. Box #1813, Manila
Trunk Line: (63 2) 524-7141
Phone (63 2) 536-0762 / 524-7141
Fax No: (6 32) 521-8113
Email [email protected] / [email protected]

Emailcast by:

Department of Tourism - Region III (Central Luzon)
Paskuhan Village, City of San Fernando, Pampanga, Philippines
Ronaldo P. Tiotuico - Regional Director
Phone: (63 45) 961-2612 / 5617 / 625-8525
Email: [email protected]
Recipient: PATA Gold Intl Award 2001, Kalakbay Natl Award 2001, ASEANTA Intl Award 2002 for Best Ecotourism Project
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