February 27, 2017 Royce Hotel, Pampanga TEZ Investment Forum February 27, 2017 Royce Hotel, Pampanga

BACKGROUND On May 12, 2009, RA 9593 otherwise known as the Tourism Act of 2009 was signed into law providing for, among others, the reorganization of the Philippine Tourism Authority into the Tourism Infrastructure and Enterprise Zone Authority or TIEZA. TIEZA is a body corporate under the supervision of the Secretary and attached to the Department of Tourism for purposes of program and policy coordination.

BOARD OF DIRECTORS Chairperson = DOT Secretary Wanda Corazon T. Teo Vice Chairman = TIEZA Chief Operating Officer Guiller B. Asido Members: The Secretary, Department of Interior and Local Government The Secretary, Department of Public Works and Highways The Secretary, Department of Environment and Natural Resources The Chairman, Mindanao Development Authority The Chief Operating Officer, Tourism Promotions Board Representative from Accommodation Sector, Atty. Lucas M. Nunag Representative from Tourism Transport Services, Maria Vida H. Stoifl Representative from Medical Tourism, Catherine B. Turvill Representative from Tourism Estate Management, Roy B. Martin Representative from Travel and Tours, Roberto U. Teo Section 65. Board of Directors. - The TIEZA shall be governed and its powers exercised by a Board of Directors ("TIEZA Board"), composed as follows: (a) The Department Secretary, as Chairperson; (b) The TIEZA Chief Operating Officer, as Vice Chairperson; (c) The TPB Chief Operating Officer; (d) The DPWH Secretary; (e) The DENR Secretary; (f) The DILG Secretary: and (g) Five (5) representative directors, to be appointed by the President, upon the recommendation of the Tourism Congress from a list of at least three (3) nominees per group as enumerated in Section 67. They must be Filipinos with recognized competence in business management, marketing, finance, tourism and other related fields and shall serve a term of office of three (3) years, which term may be extended for a period not exceeding three (3) years.

MANDATE OF TIEZA To develop, manage and supervise tourism infrastructure projects nationwide To designate, regulate, and supervise Tourism Enterprise Zones (TEZs) established under R.A. 9593 To grant and administer fiscal and non-fiscal incentives

JURISDICTION The TIEZA shall have sole and exclusive jurisdiction in the establishment and designation of a Tourism Enterprise Zone (TEZ) as well as the registration of Tourism Enterprises (RTE) which shall not be impliedly repealed or modified. All permits and licenses shall be issued by TIEZA to TEZ Operators and Registered Tourism Enterprises. TIEZA shall also administer and grant the incentives under RA 9593. This pertains to the designation of TEZs. (Sec. I, Rule II, Book 2 of the TIEZA Guidelines) Jurisdiction. The TIEZA shall have sole and exclusive jurisdiction in the establishment and designation of a TEZ which shall not be impliedly repealed or modified. All permits and licenses shall be issued by TIEZA to TEZ Operators and Registered Tourism Enterprises. No Double Availment of Incentives (Section 85(c) of Republic Act No. 9593) The investment incentives offered under this Act shall be without prejudice to availing other incentives provided under other laws, decrees, and presidential issuances. However, where such other laws, decrees or presidential issuances provide for similar or identical incentive schemes, the investor may only elect to avail of the scheme provided under one particular law, decree or presidential issuance.

Tourism Enterprise Zones (TEZs) One contiguous territory It has historical and cultural significance, environmental beauty, or existing or potential integrated leisure facilities It has, or it may have, strategic access through transportation infrastructure, and connection with utilities infrastructure systems It must be at least 5 hectares in size strategic location ** minimum investment requirement of $ 5m Criteria (Book 2, Rule II, Section 2) Any geographic area where a Tourism Enterprise Zone may be established shall conform with the following criteria to ensure that TEZs will not proliferate in a manner that diminishes their strategic economic and developmental value to the national economy: 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.

Who may apply for designation as TEZs? Private entity created under Corporation Code Local Government Unit or any instrumentality of government in pursuit of its mandate Joint Venture between Private and Public Sector

DESIGNATION OF TEZs TIEZA EVALUATES APPLICATION AND PRE-QUALIFICATION DOCUMENTS TIEZA ISSUES NOTICE TO COMPLETE PRE-DESIGNATION REQUIREMENTS PROPONENT FILES APPLICATION TIEZA BOARD DELIBERATES ON THE EVALUATION REPORT PROPONENT SUBMITS REQUIREMENTS The entire process may take upto 150 days, from submission of application form to approval by TIEZA Board. PROPONENT SIGNS DESIGNATION AGREEMENT WITH TIEZA SIGNED BY THE COO TIEZA ISSUES CERTIFICATION OF DESIGNATION

Facilities, Services and Attractions Involved in Tourism Travel and Tour Services Tourist Transport Services Adventure Sports Services Convention Organizers Accommodation Establishments Theme Parks Convention Centers Zoos Tourism Estate Management Services Restaurants Shops Sports and Recreational Centers Spas Facilities offering Health and Wellness Services Museums and Galleries

Zone Development (Operation and Administration) TEZ OPERATOR: Corporate entity TEZ ADMINISTRATOR: Appointed by TEZ Operator RTEs or Locators: Tourism Enterprises

One-Stop Shop Prospective TEZ investors and tourism enterprises can register under a single window system to avail of the incentives and benefits under the Act, including the issuance of permits and visas. TIEZA shall collect fees necessary for the issuance of these permits and licenses. MOAs with different concerned agencies are in the works for the establishment of the One-Stop Shop. Endorsement Letters will be issued in the meantime. The One-Stop-Shop is envisioned to assist the proponents by streamlining and expediting the processing of the documentary requirements from concerned government agencies through the respective MOAs.

FISCAL AND NON-FISCAL INCENTIVES

Fiscal Incentives INCOME TAX HOLIDAY Income tax exemption for a period of six (6) years, extendible for another six (6) if the enterprise undertakes a substantial expansion or upgrade of its facilities prior to the expiration of the first six (6) years. NET LOSS CARRY OVER 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. Incentives for TEZs SUBSTANTIAL EXPANSION: at least 50% of the original investment

Fiscal Incentives GROSS INCOME TAXATION Except real estate taxes and such fees as may be imposed by the TIEZA, a new enterprise shall be pay a tax of 5% on its gross income in lieu of all national and local taxes and license fees, imposts and assessments. TAX and DUTY FREE IMPORTATION OF : a. CAPITAL INVESTMENT AND EQUIPMENT b. TRANSPORTATION EQUIPMENT AND SPARE PARTS c. GOODS AND SERVICES TAX CREDIT equivalent to all national internal revenue taxes paid on all locally-sourced goods and services Incentives for TEZs Gross Income Taxation: In lieu of all national internal revenue taxes and local taxes, impost, assessments, fees and licenses, registered tourism enterprises shall pay a tax of 5% on its gross income earned from its registered activities. It shall be remitted as follows: 1/3 to the Local Government Unit(s) concerned 1/3 to the National Government 1/3 to TIEZA

Fiscal Incentives SOCIAL RESPONSIBILITY INCENTIVE Incentives for TEZs SOCIAL RESPONSIBILITY INCENTIVE tax deduction equivalent to fifty percent (50%) of the cost of environmental protection or cultural heritage, preservation activities, sustainable livelihood programs, and other similar activities as approved by the TIEZA Board. GOODS AND SERVICES: Not for the purpose of operating a wholesale or retail establishment in competition with the Duty Free Philippines Corporation (DFPC) SOCIAL RESPONSIBILITY INCENTIVE: List of activities as identified by the National Anti-Poverty Commission (NAPC)

Non-Fiscal Incentives Incentives for TEZs 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., provided that the total number of foreigners shall not exceed 5% of total workforce. 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 For the purpose of transfer of technology, employees of foreign nationals shall provide an Understudy Training Programme and designate two Filipino understudies.

Non-Fiscal Incentives Incentives for TEZs Lease of Land 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 LEASE AND OWNERSHIP OF LAND: Consistent with RA 7652 (Investor’s Lease Act)

Incentives for Enterprises Outside TEZs Incentives for Enterprises Outsude TEZs Limited to EXISTING ACCOMMODATION ESTABLISHMENTS outside a TEZ which shall undertake substantial expansion or upgrade of its facility - INCOME TAX HOLIDAY - TAX AND DUTY-FREE IMPORTATION ON CAPITAL INVESTMENT AND EQUIPMENT LEASE AND OWNERSHIP OF LAND: Consistent with RA 7652 (Investor’s Lease Act)

DESIGNATED PRIVATE TEZs

RESORTS WORLD MANILA (PASAY) It is an 13.9-hectare mixed residential, commercial and gaming, sports and hotel-use zone. It is home to luxury hotels, malls, theater and a convention center.

CIUDAD DE VICTORIA (BULACAN) It is a 58-hectare events complex that provides a robust portfolio of service and recreational facilities, transport, infrastructure, sustainable townships and prime residential condominiums.

QUEEN’S CASTLE (CEBU) It is a 70-hectare property with four components: 18-Hole Golf Course and Hotel; Condominium Hotel Resort; Retirement Village ; and Golfer’s Village.

BRAVO GOLF (NEGROS ORIENTAL) It is a 19.4-hectare general leisure zone operating a medium quality accommodation facility with complete amenities such as swimming pool, spa and dining, chapel, and 9-hole golf course.

HIJO PLANTATION (TAGUM CITY, DAVAO) It is a 350-hectare property composed of the following: leisure villas, safari recreational site, urban parks and resort hotel.

KINGDOM GLOBAL CITY (DAVAO) It is a 26-hectare property that is envisioned to house the grandest integrated leisure resort complex.

FLAGSHIP TOURISM ENTERPRISE ZONES

National Tourism Development Plan FLAGSHIP TOURISM ENTERPRISE ZONE A joint initiative of the Department of Tourism (DOT) and TIEZA to seek out and develop areas in the Philippines with viable tourism potential. National Tourism Development Plan - Disperse tourism activity throughout the entire country - Improve tourism investment and business climate Proactively identify flagship tourism investment through TIEZA FLAGSHIP TOURISM ENTERPRISE ZONE

A Flagship TEZ as a tourism enterprise zone with the following characteristics: Master planned Provided with basic infrastructure support Infused with incentives Distributed benefits to local community Conducive environment for locators or registered tourism enterprise IDENTIFICATION In coming up with the list of potential Flagship TEZ sites, the DOT starts by screening the properties in the DOT Property Data Bank and ranking them according to the strategic tourist destination clusters identified in the NTDP, particularly their proximity to international airports or gateways. The list of ranked properties is further narrowed down to those having at least 50 hectares in area, on the premise that such size would be sufficient to accommodate the envisioned integrated high-density tourism development of Flagship TEZs. While some properties qualified under the area and proximity requirement, they were not able to make the cut on legal and management issues, such as pending litigation on or lack of proof of ownership of the property, the preference of the owners to undertake the development of the property without TIEZA assistance, and their failure or refusal to provide the relevant and necessary information on the property. The DOT-TIEZA Team inspects the shortlisted sites for possible inclusion in the Flagship TEZ program. In these inspections, the secondary information provided by property owners or administrators are validated. After the inspection, using the criteria jointly formulated by the DOT-TIEZA Team, the sites are narrowed down. C

DESIGNATED FLAGSHIP TOURISM ENTERPRISE ZONES

San Vicente Long Beach (Palawan) TEZ MANAGEMENT SECTOR San Vicente Long Beach (Palawan) - Master plan completed last December 2014 A 14.7-kilometer long beach along Imuruan Bay, expected to be transformed into a dynamic and environmentally sustainable tourist destination. Developments: 1.Beach and Mountain Resorts 2. Agri-tourism Area 3. Cultural Heritage Tourism Area 4.Retirement Village 5. Accommodation Facilities 6. Airport 7. Cruise Tourism Facilities

Rizal Park Complex (Manila) - Master plan approved and designated as a Flagship TEZ last October 2014 A 54-hectare property of rich history, culture and heritage nestled in nature. It is envisioned to be a “Nation’s Premier Historic Green Park.” Developments: 1. Amenity Cores 2. Botanical Garden 3. Antique Shops 4. Art Enclaves 5. Esplanade 6. Redevelopment of Playground 7. Cruise Ship Dock

Mt. Samat Shrine (Pilar, Bataan) - Master plan approved and designated as a Flagship TEZ last October 2014 The 75 has area of the Mt. Samat Shrine houses the historical “Dambana ng Kagitingan” and the historical steel Cross. There is a limited area for new development in the Shrine area, hence, a 145 has TEZ Locator Site will be developed in support of the Shrine with the same historical and heritage development theme. Developments: Improvement of Cross Underground Museum Rehabilitation of the Colonnade Tribute Wall/Memorial Centers Commercial Areas Agricultural-Residential Areas Recreation Areas

Panglao Bay Premiere (Bohol) - Master planning already commenced this April 2016 An expanse of 111 hectares of mostly greenfield areas that will be positioned as a mixed-use large-scale integrated leisure resort.

SAN VICENTE FLAGSHIP AVP

FOR MORE INFORMATION: 02-5519556 tez.secretariat@gmail.com tieza.gov.ph