Gglc Investor

LOCATOR AND INVESTOR GUIDE

GLOBAL GATEWAYLOGISTICS CITY

Your Gateway to the World and Your Home Away from HomeYour Gateway to the World and Your Home Away from HomeClark is It!Clark is It!

WHAT IS GLOBAL GATEWAY LOGISTICS CITY?

Global Gateway Logistics City is a modern, state-of-the-art, 177 hectare master planned mixed use Logistics and Business Center of Excellence. Global Gateway is located at the crossroads of Southeast Asia in the central plains of Luzon, just 60 minutes north of Manila, in the Province of Pampanga, Philippines. Global Gateway o�ers the perfect blend of prime real estate and facilities for all your business needs. It is divided into four zones, the LOGISTICS PARK catering to all your warehousing, distribution and light manufacturing operations, the BUSINESS PARK for all your o�ce requirements, the AERO PARK home to research and development, modeling and simulation, IT and centers of higher learning, and the TOWN CENTER to support your retail and shopping needs.

C is It!lark

Bottom Line:

• Archipelagoof7,107Islands:102Million–12thmostpopulous• Capital:Manila–11Million• Languages:Filipino&English–4thlargestEnglishspeakingcountry• Religions: Catholic, Muslim, Iglesia ni Cristo, Evangelical, Christian, Buddhist andProtestant

• Currency:PhilippinePeso($1.00/PHP42.60)• LiteracyRate:92.6%• CentralLuzon/Clark&Subic–7millionwith30,000graduatesperyear.• LaborForce:ParticipationRate63.6%–World’s15thLargest• 8.5MillionFilipinosworkingabroad• $17BillionperyearOFWRemittances• GDP:4.9%(1stQuarterof2011est.)• Inflation:5.2%(June2011est.)• Exports:US$4,104.45(inmilliondollars,May2011est.)• Imports:US$4,888.29(inmilliondollars,May2011est.)• CountryofExports:(May2011est.)US17.1%;Japan15.2%;China11.9%;Singapore9.2%;HongKong7.8%;Korea4.9%;Taiwan4.9%;Thailand4.3%;Germany3.6%;Netherlands3.0%

• CountryofImports:(May2011est.)US13.5%;China10.6%;Japan9.7%;Singapore8.9%;Korea7.3%;Taiwan7.1%;Thailand7.1%;SaudiArabia5.5%;Malaysia4.6%;Indonesia3.7%

Source: CIA World Fact Book, NSO, NSCB, BSP, BLES, CHED III

ThePhilippinesislocatedatthecrossroadsofthePacific,itpossessesanabundantsupplyofinexpensive,welltrained,englishspeakingworkforce,lowoperatingcostsandpoisedonthedoorstepofChina(soontobetheworld’slargesteconomy)--providingunmatchedmarketsandopportunities.

WHY INVEST IN THE PHILIPPINES?

Bottom Line:The most advanced master-planned Logistics and Business Center of Excellence.

GLOBAL GATEWAY LOGISTICS CITY Logistics Park ProjectedConstructionArea-72hectares

• AviationSupportActivities• LogisticsOperations• DistributionCenters• WarehousingOperations• Multi-modelTransportHub• LightManufacturing

Aero Park ProjectedConstructionArea-27hectares

• ResearchandDevelopment• ModelingandSimulationCenters• FlightandAirCrewTraining• AnimationandITBasedActivities• AcademicVo-TechFacilities• HealthCareComplexes

Business Park ProjectedConstructionArea-58hectares

• AirportSupportActivities• AviationandAirlineOffices• CorporateCenters• GeneralandMixedUseOffices• IntermodalTransportHub• BPOandCallCenters

Town Center ProjectedConstructionArea-21hectares• CommercialCenter• Hotel/ConventionCenter• Restaurants• RetailShops&Boutiques• Residential/Condominium• PocketandLinearParks

• NewestandmostmodernfullyintegratedLogisticsandBusinessHubinSoutheastAsia

• 177HectaresofPrimeGreenfieldLand

• AdjacenttoMajorInternationalAirport--DiosdadoMacapagalInternationalAirport

• AdjacenttoNewPlannedRailroad--NorthRail

• LocatedattheInterchangeofTwomajorTollRoads--Subic–Clark–TarlacandNorth

LuzonExpressways(SCTEXandNLEX)

• GeographiccrossroadofSoutheastAsia

• 60minutesfromMetroManila

• 30minutestodeepwatercontainerport--SubicBay

• State-of-the-ArtITandTelecomInfrastructure

• HighlyskilledandabundantsupplyofwelleducatedandEnglishspeakingworkforce

• Worldclassandwesternmanagementoffacilities

• 24x7PhysicalSecurity

• Tax,CustomsandDutyIncentives--LocatedwithintheClarkFreeportZone

• FavorableTradeAgreementswithASEAN--10nationscomprisedof450millionpeople

• Bestmulti-modelHubinthePacific

WHY GLOBAL GATEWAY LOGISTICS CITY?

Bottom Line:Location, Location, Location

The Global Gateway Logistics City (GGLC) islocated adjacent to Diosdado MacapagalInternationalAirport(DMIA)withdailyflightstomajorAsiaPacificcities.ItisthehomeofUPSandisashort10minutedrivefromanylocationwithintheconfinesofGGLC.

GGLC is located just30minutes,on anewhigh speed toll road from thedeepwatercontainer port at Subic Bay, the primaryalternative port to the busy Manila Bayports, making the movement of heavycargoefficientandfast.

No other location in the Philippines, and few in all of Southeast Asia, can boast suchunfetteredand convenient access to all threemodesof transportationmakingall yourlogisticsandtravelrequirementsfast,friendlyandaccessible.

GGLC is conveniently located at theinterchange of two major toll roads, theNLEXandSCTEX,withtheonandofframpslocatedrightwithinthepark.Onceoffthetoll road, GGLC and Clark enjoy the bestnetwork of primary and secondary roadsinthePhilippines,allbuilttointernationalstandards.Aplannednorth-southrailroadisprojectedtoopenwithinGGLCin2013.

T h e B e s t A c c e s s T h r o u g h . . .

A I R

L A N D

S E A

Bottom Line:The Heart of South East Asia

THE CROSSROADS OF THE PACIFICGlobalGatewayislocatedatthecenterofthePacific’sbestinter-modaltransportationandlogisticshub.Itislocatedattheintersectionofthenorth-southPacificshippinglanesintheSouthChinaSeaconnectingtheindustrializednationsofJapan,KoreaandTaiwaninthenorthwithSingaporeandAustraliainthesouth.Italsositsontheeast-westshippinglaneswiththetraffictransitingtheStraitsofMalaccaconnectingthewesternportsintheUnitedStatesandthePanamacanalwithAsiawhilefacingtheentireeasternseaboardofChina.Itis90minutesbyairfromTaiwan,HongKong,MacauandtheeasternprovincesofmainlandChinaandthreehourstoJapan,BangkokorSingapore.

• SuperiorQualityoflife• CleanAirandNoCongestion• Scenic,Lush-GreenPark-likesetting• Controlledaccess• PatrolledSecurity• Teleconferencecenters• Meetingrooms• Retailshoppinganddiningarcades

• Bankingandofficesupplystores• 24x7facilitymaintenance• Sitesavailableforbuildtolease• Improvedinfrastructure,backuppowerandhighspeedcommunications

• Long-term,flexibleleasesavailableupto50yearsplusoptions

AREA AMENITIES AND QUALITY OF LIFE

El Kabayo Mimosa Golf

Fontana SM Clark and Marquee Mall

Subic Bay

AREA AMENITIES AND QUALITY OF LIFE

Bottom Line:The best place to live - work - play

Churches - School - Wholesome Family Community

GGLCistheanswertoallyourbusinessneeds.It isaperfectblendofmodern,state-of-the-artofficesandcommercialspacetohighlyefficientwarehousingandlightindustrialfacilities. GGLC embraces a modern, sophisticated and fully integrated live-work-playenvironmenttohelpyouenjoyahighqualityof life forthework-force.Lotsare ideallysizedat3,600squaremetersforcorporateandbusinessoffices,guaranteeingalarge2,200squaremeterbuildingfootprintandgenerous10,000squaremeterlotsforwarehousingandlightindustrialfacilities.LetGGLCbecome

VaticanCityLagunaTechnoParkGlobal Gateway Logistics CityKuwaitFreeTradeZoneMakatiCentralBusinessDistrictHongkongDisneylandFortBonifacioNorthgateCyberzone

4.4Millionm23.87Millionm2

1.77 Million m21.7Millionm21.2Millionm21.2Millionm2

1.10Millionm20.20Millionm2

Bottom Line:Optimally Sized to meet all your Business Needs

BUSINESS UTOPIA

BENCHMARKS

Your Home Away From Home…

INTERNATIONAL AIRPORT AND FACILITIES

Bottom Line:Adjacent to the Philippines’ largest and best International Airport with easy access for International Travel

The Diosdado Macapagal International Airport (DMIA) is conveniently located at theheartoftheClarkFreeportZone(CFZ). It isthecountry’spremierinternationalgatewaythatboastsoftwo3.2kilometerlongparallelrunwayscapableofaccommodatingwide-bodiedaircraftswithaworldclasspassenger terminalandmoderncargo facilities thatprovidethenecessaryairsideandlandsideamenities.

Amongthefacilitiesandequipment inplacearethe following:airfieldground lightingsystems,navigationalaids,communicationsequipment,meteorologicalequipmentandemergencyservices.Theairporthasa4EairportclassificationandmeetstheInternationalCivilAviationOrganization(ICAO)standardsforCategoryIprecision-approachrunway.ItalsohasaCategoryIXCrash,FireandRescuecapability.

UnitedParcelServicehasmadethePhilippinesthroughDMIA(formerlythelargestU.S.AirForceBaseoutsidetheUnitedStates)itsIntra-Asiahub.

InternationalandlocalairlinecarriersoperateoutofDMIAprovidingformoreconvenienttraveltomajordestinationsinAsiawithconnectingflightstotheotherpartsoftheglobe.Among the carriers are Asiana Airlines,Tiger Airways, Cebu Pacific and Air Asia.Todayyoucanflydailynon-stopflightstoSingapore,HongKong,Macau,Seoul,KotaKinabaluandKualaLumpur.Manyotherdestinations,withanever increasingfrequency, includeThailand,Taiwan,andotherlocations.OtherlocalairlineslikeSeairandZestAirprovidedailyflights tomajor cities in thePhilippines includingdailyflights toand fromMetroManilain25minutestraveltime.

In2009,agreementswerereachedwithQatar,Emirates,EtihadandKuwaitAirlinesoutoftheMiddleEasttocommenceupto70newweeklyflightsinandoutofDMIA.

PowerAbundantsupplyofrefined,uninterruptedpower,availabletodaytomeettheneedsoftheairportcomplexandtheexpectedinfluxofcommercialandindustrialprojectsattheClarkFreeportZone.

TelecommunicationsAdualfiber optic backbone anddigital exchange systemprovide advanced telephone,cellularandothercommunicationservices.

Water & SewerageExistingwatersupplyfacilitiesconsistofdeepwellswithatotalcapacityof5,000gpm.Storageisthroughninetankswithatotalcapacityof3.75milliongallons.Theseweragesystemconsistsof fourpumpingstations, concrete industrialwastepipelines,oxidizingponds,andamodernseweragetreatmentplant.

Bottom Line:Built to International Standards

CLARK INFRASTRUCTURE, SUPPORT AND CLARK FREEPORT ZONE ADVANTAGESClark,aformerUSAirForcebase,wasthelargestintheworldoutsidetheUnitedStateswith 33,000hectares of prime land located in Central Luzon, Philippines. It is situated80 kilometers north ofManila and 60 kilometers east of Subic Bay, a formerUS navalfacilitythathasalsobeenredevelopedintoamajorFreeport. TheDiosdadoMacapagalInternational Airport (DMIA) located in the Clark Freeport Zone brings added value tolocatorsthatwanttobelocatednearamajorInternationalAirport.

Key Advantages:• Ideallysuitedforcommercial,lightindustrial,logistics,manufacturingandbusiness• Multi-nodalvalueaddedprocessingpointwithabundantlabor• Clean,reliableanddependablepower• Worldclasssolidwasteandseweragemanagementsystem• Parklikesettingandenvironment• Customs,dutyandtaxincentives

as of August 5, 2011

CLARK FREEPORT ZONE ADVANTAGES1. TAX ADVANTAGES AND OTHER GOVERNMENT INCENTIVES

Preferenial Tax Treatment of Clark Freeport Zone (CFZ) - Registered Enterprises • Clark Freeport Zone (CFZ) registered enterprises are entitled to preferential tax of five percent (5%) of Gross

IncomeEarned(GIE)inlieuofthecustomarynationalandlocaltaxes.(See Inserts for Comparison of Incentives and Benefits)

Foreign Investment Incentives

Board of Investments (BOI) - IncentivesAny enterprise registeredwith the BOI pursuant to the 1987Omnibus Investments Code (EO-226) is entitled to,amongothers,thefollowingincentives***subjecttocertaintermsandconditions:

Fiscal incentivesIncomeTaxHoliday (ITH) for six years forpioneerfirmsandgenerally four years fornon-pioneerfirms. If anon-pioneerfirmis locatedinalessdevelopedarea, itshallgenerallybeentitledto6yearsITH.FirmslocatingwithinMetroManilaareingeneralnotgrantedITH.

Taxcreditonrawmaterials,suppliesandsemi-manufacturedproducts.

Additional deduction from taxable income for labor expense cannot be simultaneously enjoyed with the ITHincentive).

Duty-free importation of capital equipment, spare parts and supplies for both export and domestic-orientedenterprisesuntilJune6,2009orJune6,2011,dependingonthetypeofequipment.

Additionaldeductionfromtaxableincomefornecessaryandmajorinfrastructureworks(cannotbesimultaneouslyenjoyedwiththeITHincentive).

Non-fiscal Incentives• Employmentofforeignnationals.• Guaranteed100%repatriationofforeigninvestmentsandearnings.• Importationofconsignedequipmentforanunlimitedperiodsubjecttopostingofre-exportbond.

2. TRANSPORTATION SYSTEM

GlobalGatewayLogisticsCity(GGLC)isconvenientlylocatedattheinterchangeoftwomajortollroads,theNorth-LuzonExpressway(NLEX)andSubic-ClarkTarlacExpressway(SCTEX)withboththeonandofframpslocatedrightwithinthepark.Onceoffthetollroad,GGLCandClarkenjoythebestnetworkofprimaryandsecondaryroadsinthePhilippines,allbuilttointernationalstandards.Aplannednorth-southrailroadisprojectedtoopenwithinGGLCin2013. TraveltimefromMetroManilatoClarkgoingtoGlobalGatewayLogisticsCitywillonlytakeabout60minutes.

GGLC is located just30minutes,onanewhighspeed toll road fromdeepwatercontainerportatSubicBay, theprimaryalternativeporttothebusyManilaBayports,makingthemovementofcargoefficientandfast.

NootherlocationinthePhilippines,andfewinallofSoutheastAsia,canboostsuchunfetteredandconvenientaccesstoallmodesoftransportationmakingallyourlogisticsandtravelrequirementfast,friendlyandaccessible.

3. TELECOMMUNICATIONS

Telecommunicationfacilitiesarekeptatthehighestefficiencylevelbycreatingliberalbusinessenvironmentopentotelecomprovidersthatcanextendthebestinformationcommunicationservicesincludingdualfiberopticbackboneanddigitalexchangesystemforadvancedtelephony,cellularandinternetconnectivity.Ourserviceprovidershaveanextensivenetwork infrastructure,connectingmorethan200countriesandterritoriesworldwidethroughtheirinternationalgatewayfacilitiesandmajorcablesystems.

Telecomrates: Commercial Php936.41/month Residential Php542.19/month National Php3.75/min. International US$.36/min. Source:PLDTClark(asofMay27,2011)

4. POWER

Clark’s power supply is sourced directly from National Power Corporation (NAPOCOR/NPC) Independent PowerProducers (IPP)viaNationalGridCorporationof thePhilippines (NGCP) substation inMexico,Pampanga.Two (2)Parallellinesat69KVwiththecapacityof80MWeach.Clark’speakdemandasofMarch2010isabout46.704MW.

AverageRate: Php5.47/kwh Source:CEDC(asofMay27,2011)

ClarkFreeportZoneAdvantages

DisclaimerThisGGLCLocatorandInvestorGuideisforinformationalpurposesonly,andshouldnotberelieduponasthesolesourceofinformationrelatingtoitscontent.NeitherdoesthisGuideconstitute,norisitmeantasasubstituteforprofessionallegaladvice.NeitherGlobalGatewayDevelopmentCorporationnorPeregrineDevelopmentInternational,Inc.shallberesponsibleforanyloss,damage(whetherspecialorconsequential),liability,injury,claims,and/oranymannerofinconvenience,arisingoutof,orinrelationtotheuseoftheinformationcontainedinthisGuide.Inotherwords,weencourageyoutoexerciseduediligenceinusinganyinformationinthisGuide,andtoobtainyourrequiredinformationfromasmanyrelevantsourcesaspossible.

CLARK FREEPORT ZONE ADVANTAGES5. WATER & SEWERAGE SYSTEM Existingwatersupplyfacilitiesconsistofwaterwellswithatotalcapacityof25,400cu.m./day.Storageisthrough5tankswithatotalcapacityof10,985cu.m.Theseweragesystemconsistsof two(2) liftstations,anda126kmindustrialwastepipeline,oxidizingpondforseweragetreatment.ThewaterandseweragesystemwillbeexpandedtoaccommodatefuturerequirementsofClarkFreeportZone.

Water rates: Industrial/Commercial:First0-10cu.m. Php218.21Next11-20cu.m. Php23.49Next21-30cu.m. Php24.88Above31cu.m. Php26.26

Residential:First0-10cu.m. Php109.11Next11-20cu.m. Php11.78Next21-30cu.m. Php12.44Above31cu.m. Php13.09Sewercharges-40%oftotalwaterbillSource:CWC(asofMay27,2011)

6. WASTE DISPOSAL SYSTEM

TheClarkDevelopmentCorporation(CDC),throughaservicecontractwiththeMetroClarkWasteManagementCorp.,managesandoperatestheClarkIntegratedSolidWasteManagementFacilityforCFZ.Theprojectisthefirstandonlyreal sanitary landfill in thePhilippines todate.All investors inClarkareassuredofpropermanagementandsafedisposaloftheirgarbageandcanboastoffullcompliancetothenationalenvironmentalregulatoryandinternationalcertificationrequirements.

Garbage Fees: MediumandSmallvolumewastegenerators Php20.00 Perbag(standard30”x36”x0.02mm) Largevolumewastegenerators Php11,520.00 Php360/m3x32m3(1bin)

7. MANPOWER RATES

For non-agricultural firms(ManufacturingFirms,Duty-FreeShops,HotelsandRecreational-related).

MinimumofP302.00orUS$6.83perdayforthoseemployedinestablishmentswithtotalassetsofP30Millionormore,plusP14.00CostofLivingAllowance(COLA).

MinimumofP294.50orUS$6.66perdayforthoseemployedinestablishmentswithtotalassetsoflessthanP30Million,plusP14.00CostofLivingAllowance(COLA).

For retail/service establishments(SmallFirmsOnly)

MinimumofP291.00orUS$6.57perdayforthoseemployedinestablishmentswith16ormoreemployees.

MinimumofP277.00orUS$6.26perdayforthoseemployedinestablishmentswithlessthan16employees.

ReferenceRate:US$1.00=Php44.23

Brief Summary of Philippine Labor Standards

ForeigninvestorsshallabidebythePhilippineLaborCodeandLaborStandards.AbriefsummaryofPhilippineLaborStandardsareasfollows:

1. Working Hours

• Normalhoursofworkperdayis8hours(notincluding1hourbreakformeals)

• Normalnumberofworkdaysperweekis6days(24hoursrestrequiredafter6consecutiveworkdays)

• Compulsoryovertime/restdayworkisallowedundercertaincircumstances(ex.non-hazardouswork,workwithperishablegoods,etc.)



CLARK SCHEDULE OF BUSINESS REGISTRATIONONE-TIME FEES

1. PROCESSINGFEEFORNEW/RENEWAL LEASEAGREEMENT(ONETIMEPAYMENT) LETTEROFAPPROVAL(ONETIMEPAYMENT) ApplicationFee P2,000.00 CertificationofRegistrationandTaxExemption P2,000.00 PermittoOperate(Annually) P1,000.00 TemporaryPermittoOperate(Monthly) P500.00 2. PROCESSINGANDISSUANCEOFENVIRONMENTALCOMPLIANCECERTIFICATE(DENR)

Forcriticalprojects P3,000.00 Fornon-criticalprojects P300.00 CertificateofEnvironmentalCompliance P500.00SpecialExitPass(HazardousWaste) P500.00

REGULAR FEES

1. EXPORTPERMITS/TALLY Direct Free Constructive US$10,000andbelow P200.00 AboveUS$10,000 P300.00 2. IMPORTPERMITS NoCommercialValue P50.00 WithCommercialValue UptoUS$1,000 P100.00 US$1,001toUS$10,000 P150.00 US$10,001toUS$50,000 P300.00 US$50,001toUS$100,000 P350.00 US$100,001toUS$500,000 P500.00

US$500,001andabove P700.00 3. TEMPORARYTRANSFER(CustomsBondedWarehouse/Non-CustomsBondedWarehouse)

Farm-outofrawmaterials/equipmentforprocessing/repair P50.00

4. BRING-INPERMITS Commercial(forTrading) P200.00 Non-Commercial(forCompanyUse) P50.00

5. SALE/TRANSFEROFARTICLESTOCUSTOMSTERRITORY(Bring-OutLocal/ImportedArticles)

NoCommercialValue(LocalArticlesOnly) P50.00 US$10,000below P500.00 AboveUS$10,000 P1,000.00 Scrap/Waste(PerPermit) P200.00 6. PERMITTOBRING-OUTIMPORTEDVEHICLE P50.00 7. FEES(RELATEDTOWORKINGVISAOFEXPATS) AlienEmploymentPermit(AEP)EndorsementtoDOLE US$10.00 SpecialClarkWorkingVisa(SCWV)EndorsementtoBureau ofImmigration(BI) US$50.00 SpecialWorkingPermit(SWP) US$20.00 SpecialClarkInvestor’sVisa(SCIV) US$50.00 ProvisionalPermittoWork(PPW) US$10.00 8. MISCELLANEOUSFEES AccountableForms P250.00 CDCContainerZeal P20.00 ZoneVehicleSticker P150.00

Note:CFZLocatorsAssociationFeesshallalsobechargedtocoverexpensesforsecurity,roadlighting,garbagecollection,etc.Allratesarerepresentativesofhistoricalvalues.

ClarkScheduleofBusinessRegistration



PAYMENT OF TAXESI. The special 5% Tax on Gross Income Earned (GIE)

a. Therulesof the implementationof thespecial5%taxonGIE, in lieuofnationaland local taxes,grantedtoFreeportEnterprisesinCFZareasfollows:

1. GIE shall refer togross salesorgross revenuederived frombusinessactivitieswithin the subjectEcozoneorFreeport,netofsalesdiscounts,salesreturnsandallowancesminuscostofsalesordirectcostsbutbeforeanydeductionforadministrative,marketing,selling,and/oroperatingexpensesorincidentallossesduringagiventaxableyear.InthecaseoffinancialenterpriseswithinFreeports,grossincomeshallincludeinterestincome,gainsfromsales,andotherincome,netofcostsoffunds.

2. Onlythefollowingcostofsales/directcostshallbeallowedasdeductionsforpurposesofcalculatingtheGIEearnedforthefollowingFreeportenterprisesinCFZ,towit:

i. TradingEnterprises

CostsofSales(beginninginventorypluspurchases,minusendinginventoryofgoods).

ii. ManufacturingEnterprises

• Directsalaries,wages,orlaborexpenses,inclusiveoftrainingdirectlyrelatedtotheregisteredactivity;• Productionsupervisionsalaries;• Rawmaterialsusedinthemanufactureofproducts;• Decreaseingoodsinprocessaccount(intermediategoods);• Decreaseinfinishedgoodsaccount;• Suppliesandfuelsusedinproduction;• Depreciationofmachineryandequipmentused inproduction,andof thatportionof thebuildingownedor

constructedbytheregisteredenterprisethatisusedexclusivelyintheproductionofgoods;• Rentandutilitychargesassociatedwithbuilding,equipmentandwarehousesusedinproduction;and• Financingchargesassociatedwithfixedassetsusedinproduction,theamountofwhichwerenotpreviously

capitalized.

iii. ServiceEnterprises

• Directsalaries,wages,orlaborexpenses,inclusiveoftrainingdirectlyrelatedtotheregisteredactivity;• Servicesupervisionsalaries;• Directmaterials,suppliesused;• Depreciationofmachinery,equipmentusedintherenditionofregisteredservices,andofthatportionofthe

building owned or constructed by the registered enterprise that is used exclusively in the rendition of theregisteredservice;

• Rentandutilitychargesforbuildingsandcapitalequipmentusedintherenditionofregisteredservices;• Financingchargesassociatedwithfixedassetsusedintheregisteredservicebusinesstheamountofwhichwere

notpreviouslycapitalized.

iv. FinancialInstitutions-None

b. The5%taxonGIE,inlieuofnationalandlocaltaxes,grantedtoPEZAEcozoneEnterprisesinCFZ,shallbesubjecttotherelevantprovisionsofR.A.No.7916,itsImplementingRulesandRegulations,Circulars,MemorandaofAgreementwithothergovernmentagencies,andallotherrelevantissuancesofPEZAandofothergovernmentagenciesrelativetotheimplementationofthetaxincentivesunderRA7916.

II. Payment and Remittance of the 5% Tax on GIE

A. The5%TaxonGIEshallbepaidandremittedbyFreeportEnterprisesinCFZthatareregisteredwiththeClarkDevelopmentCorporation(CDC),asfollows:

• 3%totheNationalGovernment;• 2%tothelocalgovernmentunits(LGUs)throughtheTreasurer’sOfficeoftheMunicipalityorCitywherethe

FreeportEnterpriseislocated.

B. Returnsandpaymentofthe5%TaxonGIEshallbegovernedbythefollowing:

1. QuarterlyandFinalAdjustmentTaxReturns:

a. EveryFreeportEnterprisesubjecttothe5%TaxonGIEshallfileaquarterlyandfinaladjustmentincometaxreturnshowing,amongothers:

i. theGIEforsuchperiod;ii. theamountrepresenting5%ofthetaxonsaidGIE;iii. theamountrepresentingthe3%shareoftheNationalGovernment;andiv. theamountrepresentingthe2%ofthecity/municipality;

b. Thequarterlyincometaxreturnshallbefiledwithin60daysafterthecloseofeachofthefirstthree(3)quartersandafinaladjustmentincometaxreturncoveringtheentiretaxableyear,notlaterthanthe15thdayofthefourthmonthfollowingthecloseofitstaxableyear,whetheracalendarorafiscalyearaccountingperiod.AFreeportEnterpriseshallprepareandaccomplishatleastsix(6)copiesthereofforfiling,asfollows:

i. Original and duplicate original copies thereof for filing with the duly authorized representative of theCommissionerofInternalRevenue,forthepurposeofpaymentoftheaforementioned3%shareoftheNationalGovernment;

ii. Twoduplicatecopiesforthepurposeofpaymentoftheaforesaid2%shareofthecity/municipality;iii. Onecopythereofforthefileofthesaidregisteredenterprise.Iftwoormorecities/municipalitiesareentitled

toashareinthe2%taxshareofcities/municipalities,asmanycopiesshallbeaccomplishedforthepurposeoffilingatleasttwocopiesthereofwiththeconcernedcities/municipalities;and

iv. OnecopythereofforfilingwiththeCDC,within30daysfromdateoffilingoftheincometaxreturn.

PaymentofTaxes



PAYMENT OF TAXES2. FilingProcedure

a. The Freeport Enterprise shall present and submit its tax return to the Authorized Agent Bank (AAB) of theRevenueDistrictOffice(RDO)havingjurisdictionoftheCFZ;

b. Afterpaymentof the3%taxshareof theNationalGovernment,all copiesof the incometax returnshallbestampedreceivedbytheAAB;and

c. TheremainingcopiesoftheincometaxreturnshallbereturnedtotheFreeportEnterprise,one(1)copythereofforitsfile,andtherest,dulystampedreceivedbytheAABshallbesubmittedtotheZoneManagementAuthorityfortheremittanceofthe2%shareoftheLGU/s.

d. Within30daysfromdateoffilingoftheincometaxreturn,onecopythereofshallbefiledwiththeCDC.

3.AdditionalAttachment a. TheFreeportEnterpriseshallsubmitwithitsquarterlyincometaxreturnaseparatescheduleshowing:i. theGIEforthequarterwithout,however,showingthedetailsonhowthesamehasbeencomputed;ii. the5%specialtaxduethereon;iii. the3%taxshareoftheNationalGovernment;andiv. theshareofeachcity/municipalityfromthe2%taxshareofcitiesandmunicipalities.

b. The sameschedule, inaddition to thedulyauditedfinancial statementsof theFreeportEnterprise, shallbesubmittedwith the annual final adjustment return. For this purpose, said schedule shall show the detailshowitsGrossIncomeEarnedhasbeencomputed.AllFreeportEnterprisesshallsecure,onanannualbasis,acertificationfromtheCDCthat:

i. Theenterpriseisdulyregisteredandentitledtothe5%specialtaxongrossincome;andii. Whenever,applicable,thepercentageallocationofthe2%shareinthecaseofoverlappingcities/municipalities.

Refund/CreditforErroneouslyPaid5%SpecialIncomeTax—TheBIRshallmaketheappropriaterefundand/orissuethecorrespondingcredit,foranyandallerroneouspaymentspertainingtotheNationalGovernment’sstated3%shareintaxespaidbyEcozoneEnterprises,whiletheconcernedcity/municipalityshallberesponsibleformakingsaidrefundand/ortaxcreditasregardsthe2%sharepertainingtothem.

c. Returnsandpaymentofthe5%TaxonGIEofPEZAEnterprisesshallbegovernedbytheRulesandRegulationsofRA7916andrelatedissuancesoftheDOF/BIR.

d. Ecozone or Freeport Enterprises availing tax incentives provided for under RA 9400 shall secure from theconcerned IncentivesAdministrationAuthority (i.e.,CDCorPEZA)onanannualbasisacertification that theenterpriseisabonafideregisteredenterpriseentitledtoincentivesprovidedunderRA9400,andtoattachthesaidcertificationtotheirannualIncomeTaxReturnuponfilingthereof.

III. Other Tax and Fiscal Obligations

A. EcozoneorFreeportEnterpriseavailingoftheincentivesunderthe5%specialtaxregimemaygenerateincomefromsourcesoutsidetheEcozoneorFreeportZoneorwithintheCustomsterritoryofupto30%ofitstotalincomefromallsources.However,iftheincomeofanEcozoneorFreeportEnterpriseexceedssaid30%threshold,thenallofitsincomewhetherfromtheZoneortheCustomsTerritoryshallbesubjecttotherelevantinternalrevenuetaxesundertheNationalInternalRevenueCodeof1997,asamended.

B. An Ecozone or Freeport Enterprise shall be constituted as a withholding agent for the government, in thefollowinginstances:

1. IfitactsasanemployeranditsemployeesreceivecompensationincomesubjecttothewithholdingtaxunderSec.72(a),ChapterX,TitleIIoftheTaxCodeof1997,asamended,ascurrentlyimplementedbyRR2-98,asamended;

2. IfitmakesincomepaymentstoindividualsorcorporationssubjecttotheexpandedwithholdingtaxpursuanttoSec.50(b)oftheTaxCodeof1997,asamended,andasimplementedbyRR2-98,asamended;and/or

3. If itmakespayment/remittanceof certain income subject to thefinalwithholding taxunderSec.50 (a), inrelationtoSec.51oftheTaxCodeof1997,asamended.

C. The5%preferentialtaxrateshallnot applyto interest incomereceivedorearnedbyanEcozoneorFreeportEnterprise fromanyPhilippine currencybankdepositandyieldoranyothermonetarybenefit fromdepositsubstitutes,andfromtrustfundsandsimilararrangements,whichshallstillbesubjecttothecorrespondinginternalrevenuetaxesundertheTaxCode.

(SOURCE: DEPARTMENT ORDER NO. 3-08 RULES AND REGULATIONS TO IMPLEMENT RA 9400, “AN ACT AMENDING RA 7227 OTHERWISE KNOWN AS THE BASES CONVERSION AND DEVELOPMENT ACT OF 1992, AND FOR OTHER PURPOSES” OF THE DEPARTMENT OF FINANCE)



SPECIAL CLARK INVESTOR’S VISA (SCIV) AND SPECIAL CLARK WORKING VISA (SCWV)TheSpecialClark Investor’sVisa (SCIV)andSpecialClarkWorkingVisa (SCWV)arevisaspursuanttoRepublicActNo.7227,Section5ofExecutiveOrderNo.80,andExecutiveOrder464andMemorandumofAgreementbetweenClarkDevelopmentCorporation(CDC)andtheBureauof Immigration(BI).ThesevisasshallapplytoforeignerswhoshallperformlinefunctionsorassumejobsandresponsibilitiesnecessarytooperatethebusinessofaregisteredenterpriseintheClarkFreeportZone(CFZ).

VISA FEATURES AND INCENTIVES

SPECIAL CLARK INVESTOR’S VISA (SCIV)

TheSpecialClarkInvestor’sVisa(SCIV)hasthefollowingfeatures:

(1)multipleentryprivilegewithexemptionfrom: •ExitClearanceCertificate, •Re-entryPermitand •SpecialReturnCertificate.

(2)Indefinitevalidityperiod,unlesssoonerrevokedandsubjecttotheconditionofthegrantee’scontinuinginvestmentwithintheCFZisequivalenttonotlessthanTwoHundredFiftyThousandUSDollars(US$250,000.00).

SPECIAL CLARK WORKING VISA (SCWV)

TheSpecialClarkWorkingVisa(SCWV)hasthefollowingfeatures:

(1)multipleentryprivilegewithexemptionfrom: •ExitClearanceCertificate, •Re-entryPermitand •SpecialReturnCertificate.

(2)Two (2) yearsmaximum validity period (renewable thereafter), subject to thevalidityperiodoftheAlienEmploymentPermit(AEP)asapprovedbytheDepartmentofLaborandEmployment(DOLE).

ALIEN EMPLOYMENT PERMIT

An Alien Employment Permit (AEP) and an investor’s or working visa are the generalrequirements for Aliens seeking admission to the Philippines, specifically in the ClarkSpecialEconomicZone,forthepurposeofemployment.

TheDepartmentofLaborandEmployment(DOLE)AlienEmploymentPermit(AEP)shallserveasoneoftheprerequisitesintheapplicationforeitheraSpecialClarkWorkingVisa(SCWV)orSpecialClarkInvestor’sVisa(SCIV).TheAEPthereforeisnotasufficientdocumenttoallowthelegitimateemploymentofanyforeignnationalhereinthePhilippines.

1 An alien assuming a line function in an enterprise or is receiving any form of remuneration from the same is deemed to be an employee of that enterprise regardless of the source of compensation and duration of employment , whether the employment is temporary or part-time

SpecialClarkInvestor’sVisa(SCIV)andSpecialClarkWorkingVisa(SCWV)




informational purposes only, and shouldshouldshouldInternational,International,International, Inc. shallshall be responsibleresponsible forfor loss,

FLOWCHART OF PROCEDURES ON HOW TO APPLY FOR AN ALIEN EMPLOYMENT PERMIT (AEP), SPECIAL CLARK WORKING VISA (SCWV)

TYPE OF TRANSACTION FEES AND CHARGES(payableinPhil.Pesoatcurrentexchange

ratecashorcheque)(NeworRenewal) US$ 10.00

WORKINGVISAPROCESSINGFEE(NeworRenewal)

US$ 50.00

INVESTOR’SVISAPROCESSINGFEE(NeworRenewal)

US$ 30.00

ADD:NOTARIALFEESFORAPPLICATIONANDOTHERFORMS

DEPARTMENTOFLABORANDEMPLOYMENT(DOLE)FEESANDCHARGES(CASHONLYANDPAIDDIRECTLYTODOLE)AlltransactionsarecoveredbyofficialreceiptsBUREAUOFIMMIGRATION(BI)FEESANDCHARGES(CASHONLYANDPAIDDIRECTLYTODOLE)Alltransactionsarecoveredbyofficialreceipts

REMINDER:•Tohelpsavetime,anon-Filipinonational(i.e.,thealien)mayapplyandsecurea Clearance from theNational Bureau of Investigationwhile completing all therequirements for an Alien Employment Permit (AEP) and Special ClarkWorkingVisa(SCWV).TheprocessingoftheAEPandtheSCWVusuallytakesabout45days.

START

DOLE-IIIissuesAEPAlien

CDCissuesVisaEndorsementtoAlien

AlienappliesforCDCEndorsementforALIENEMPLOYMENTPERMIT(AEP)

applicationbysubmittingAEPrequirementstoCDC

AliensubmitsAEPcard,NBIClearanceandotherTYPEOFTRANSACTIONrequirementsindicatedontheSpecial

ClarkWorkingVisa(SCWV)

CDCCustomerServiceDeptevaluatesapplication,interviewsalienandissuesVisaEndorsementtoalien

AliensubmitsCDCVisaEndorsementandAEPrequirementstoDepartmentofLaborandEmployment

AliensubmitsVisaEndorsementandotherrequirementstoBureauofImmigration

BureauofImmigration-Clarkstampsandissuesvisa,AlienCertificateofRegistration(ACR)

FlowchartofProceduresonHowToApplyforanAlienEmployment

Permit(AEP),SpecialClarkWorkingVisa(SCWV)


DIOSDADO MACAPAGAL INTERNATIONAL AIRPORT FLIGHT SCHEDULEDOMESTIC PASSENGER OPERATIONS

SEAIR 12xperweek(Clark-Caticlan)

CebuPacific 4xperweek(Clark-Cebu)

INTERNATIONAL PASSENGER OPERATIONS60flightsperweek

AsianaAirlines 10xperweek(Clark-Incheon)

TigerAirways 2xDailyFlights(Clark-Singapore)

AirAsiaBerhad DailyFlights(Clark-KualaLumpur) DailyFlights(Clark-KotaKinabalu)

CebuPacific DailyFlights(Clark-Singapore) 5 xperweek(Clark-HongKong) 6 xperweek(Clark-Macau) 3 xperweek(Clark-Bangkok)

UPCOMING INTERNATIONAL FLIGHTS

SpiritofManilaAirlines FlightstoTaipei,TaiwanandtheMiddleEast

KoreanAirlines 3xperweektoIncheonSouthKorea

FLIGHT SCHEDULE

*with connecting flights to US, Japan and China

AIR ASIAEffective 27 March until 29 October 2011 Air Asia Berhad flights be scheduled as follows:

AK 662/663 KUL-CRK-KUL 1140H-1205HAK 6264/6265 BKI-CRK-BKI 1535H-1600H

CEBU PACIFICCebu Pacific 5J-149/150 HKG-CRK-HKG effective 02 November 2010 (daily)

Cebu Pacific 5J-538/537 effective 02 November 2010 (daily)Timing Adjustment and change in days of Operation of flight 5J-371 (MFM-CRK) effective 21 January 2011

JIN AIRJin Air effective 27 March until 29 October 2011 LJ 003/004 (ICN-CRK-ICN)

Jin Air extra schedule effective 21 July until 28 August 2011LJ 603/604 (ICN-ICN) every Friday and Monday

SEAIRSEAIR effective 01-31 July 2011 DG 7792/7793 (CRK-SIN-CRK) Daily

SEAIR effective 01-31 July 2011 (CRK-HKG-CRK) DailySEAIR effective 01-31 July 2011 (CRK-MFM-CRK) Daily

SEAIR (Domestic) effective 01 July until 15 October 2011 (CRK-MPH-CRK)

CorporateOfficeBuilding,CivilAviationComplex,ClarkFreeportZone,Philippines2023(+63)45+599-2888or599-2896to97

www.clarkairport.com

AIRLINE DESTINATION DEPARTURE FROM CLARKAIRASIA KualaLumpur 11:45AM Daily

KotaKinabalu 06:00PM DailyASIANAAIRLINES Incheon* 12:55AM DailyCEBUPACIFICAIR Bangkok 08:45PM T-Th

HongKong 07:05AM M-W-F-Sa-SuMacau 07:00PM M-W-F-SuSingapore 12:10PM M-W-F-Su

Cebu 08:30PM M-W-FSEAIR Singapore 06:05AM Daily

HongKong 07:15PM DailyMacau 01:25PM Daily

Caticlan 06:00AM Th-F-SaJINAIR Incheon 01:40AM M-T-Th-F-SaSOMA Macau 04:05AM M-F

Taipei 07:00AM Daily

DiosdadoMacapagalInternationalAirportFlightSchedule



DIOSDADO MACAPAGAL INTERNATIONAL AIRPORT AIR TALKSCOUNTRY DATE VENUE CAPACITY CARGO FLIGHTS

MACAU 24-25APRIL MACAU 6300SEATS(CLARK&SUBIC)

NORESTRICTIONONCAPACITYANDAIRCRAFT

4FLIGHTS/WEEK

CANADA 13-15MAY CANADA 7FREQ -CAMBODIA 19-20JUNE MANILA 32FREQ -HONGKONG 25-26JUNE CLARK 6300SEATS

(CLARK)1400TONS(CLARK&SUBIC)

5FLIGHTS/WEEK

NETHERLANDS 10-11JULY MANILA 7FREQ(CLARK) 700TONS -THAILAND 24-25JULY THAILAND 8700SEATS 700TONS 5FLIGHTS/WEEKIRAN 4-5AUGUST MANILA 7FREQ 700TONS -FINLAND 29-30SEPT FINLAND 7FREQ 700TONS -KUWAIT 22-23OCT CLARK PENDING -MALAYSIA 29-30OCT CLARK 9000SEATS 700TONS 14FLIGHTS/WEEKJAPAN 26-27NOV MANILA 14freq(Clark&

Subic)*additional6coefficients(Clark-Osakaand/orNagoyav.v.)*28coefficientspointsinRP(exceptMla)–pointsinJapan(exceptTokyo)

-

RUSSIA 10-11DEC MANILA PENDING -YEMEN 17-18DEC MANILA PENDING -

COUNTRY DATE VENUE CAPACITY CARGOQATAR 14-15JAN MANILA 14FREQ(anyaircraft

exceptA380)400TONS

UAE 28-29JAN ABUDHABI 42FREQKUWAIT 16-17FEB MANILA 14FREQ 14FREQBAHRAIN 25-26FEB MANILA 28FREQAUSTRALIA 12-13MARCH CANBERRA 4,000SEATS(perweek) 1,300TONSSINGAPORE 6-7MAY SINGAPORE 10,000SEATS(per

week)=50flightsperweek

Mayconvertthepassengercapacitytocargo-ratioof4seats:1Ton

COUNTRY DATE VENUE CAPACITY CARGOTURKEY 25-26FEB 3Frequencies

withanyaircraft(Delegationagreedtomeetagainin2011inordertoincreasethefrequencyto7)

BAHRAIN 29-30MARCH 31FREQ 200TONSSINGAPORE 12-13MAY Additional10,000

SEATSineachdirection,bringingatotalof20,000passengerseats

Maximumof200tonsweeklywithout5thfreedomrights

CHINA 23-24NOV 10,000SEATSin2004,additional3,500in2010perdirection=13,500SEATSdesignatedairlineentitledtooperateunlimited3rdand4thfreedomwithanyaircrafttype,exceptManila,Beijing,Shanghai,andGuangZhou

2008 2009

2009

2010


COUNTRY DATE VENUE CAPACITY CARGOSPAIN 19-21MAY MADRID 14FREQ(perweek) 7Frequenciesperweek

with5thfreedomexceptUSAandChina

UNITEDKINGDOM 7-9JULY LONDON 7Frequenciesperweek(Rovingpoint)

LIBYA 21-22OCT MANILA 7FrequenciesforB-747or10frequenciesforsmalleraircraft

RUSSIA 30NOV-01DEC MOSCOW ASAsignedbutnofrequencyspecified

OMAN 13-15DEC MOSCAT 7FREQ(Passengercombinationand/orallcargoservicesandaircraftexceptA380)


COMPARISON OF INCENTIVES & BENEFITSITEM CFZ PEZA BOI

1)IncomeTaxHoliday(ITH) Generally, no income tax holidays for CFZ locators. However, PEZAenterprisesinthePEZAEcozone/swithinCFZshallbeentitledtoPEZAincentives, including the income tax holiday (please see commentsunder“PEZA”).

Also, ITH may be availed from the Board of Investments (BOI):Four(4)orsix(6)yearsdependingontheprojectandextendableuptoeight(8)years.

However, after the expiration of the ITH granted by the BOI, theregistration with BOI must be cancelled, and the enterprise mustregisterwiththeCFZtoavailofthe5%GITregime.ThisisinlinewiththeruleenforcedinDOFOrderNo.3-08ontheexclusivityofincentivesforCFZlocators.

Note:TheBOIwillonlyallowtheregistrationofanenterprisethat isnotat the same time registeredwith theCFZ. Anenterprise cannotsimultaneously enjoy the BOI and CFZ incentives. BOI-registeredenterprisesareentitledtotheincentivesundertheBOIcolumn.

Export Manufacturing and Information Technology Enterprises:(a)Pioneerstatus-6years;(b)Non-pioneerstatus-4years;(c)ExpansionProject-3years.

Therateofexemptionofexpansionprojects iscomputedbydividingtheincrementalsalesoftheregisteredproductbythetotalsalesoftheregisteredproduct.

ITH is extendable up to 8 years if: (a)Netforeignexchangeearningsorsavingsinthefirstthree(3)yearsisatleastUSD500,000annually;(b)Capitalequipmentto laborratiodoesnotexceedUSD10,000to1worker;and(c)50%ofrawmaterialsusedisconsideredindigenous

Tourism, Medical Tourism & Agro-Industrial Enterprises:ITHisfour(4)years.AccordingtothePEZA,theITHisextendableonacase-to-casebasisundertheconditionsindicatedabove.

Note: PEZA registered enterprises cannot register with CFZ, andsimultaneouslyavailofCFZincentives.

Projects under the Investments Priorities Plan:(a)Pioneerstatus-6years;(b)Non-pioneerstatus-4years;(c)Expansionproject-3years;(d)Projectlocatedinlessdevelopedarea-6years;and(e)Modernizationproject-3years.

ITH is extendable up to 8 years if: (a)Net foreignexchangeearningsorsavings inthefirst3years isatleastUSD500,000annually;(b)Capitalequipmentto laborratiodoesnotexceedUSD10,000to1worker;and(c)50%ofrawmaterialsusedisconsideredindigenous

2)TaxonGrossIncome 5%inlieuofalltaxes,providedanyincomefromtheregisteredactivityderived from the CustomsTerritory does not exceed 30% of incomefromallsources

If the incomeofaCFZenterprise fromtheCustomsTerritoryexceeds30%, then all of its income,whether from the Zone or the CustomsTerritory, shallbe subject to thenormal income tax. (DOFOrderNo.3-08)

Indeterminingtheamountofgrossincomethatissubjecttothetax,directcostsareallowedasdeductions.Foranenumerationofallowabledeductions,pleaseseeDOFOrderNo.3-08.

5% in lieu of all taxes applicable only to the following enterprises:i)ExportManufacturingii)InformationTechnologyiii)Tourismiv)MedicalTourismv)Agro-Industrialvi)PEZAZoneDevelopervii)PEZAZoneFacility&UtilityEnterprises

If the sales in the CustomsTerritory should exceed 30%, its incomederived from such excess sales shall be imposed with the normalincometax.(BIRRevenueMemorandumCircularNo.74-99)

Indeterminingtheamountofgrossincomethatissubjecttothetax,directcostsareallowedasdeductions.Foranenumerationofallowabledeductions,pleaseseeBIRRevenueRegulationsNo.11-05.

NotApplicable

3)RegularIncomeTax Exempt,providedanyincomefromtheregisteredactivityderivedfromtheCustomsTerritorydoesnotexceed30%ofincomefromallsources.

Exemptionlimitedtotheenterpriseslistedabove

The enterprises not subject to ITH or 5% GIT are subject to regularcorporateincometax.

AfterITH,regularincometaxof30%ontaxableincome

ComparisonofIncentives&Benefits




4.A.)VATonPurchases

4.B.)VATonSales

Zero-rated for purchases from suppliers in the Customs Territory;Exemptifpursuanttoanintra-ecozonepurchase.

ExemptfromVAT

Zero-rated,ifpurchasedfromtheCustomsTerritory;ExemptfromVAT,ifpurchasedfromaPEZA-registeredenterprise.

Exempt,Ifunderthe5%GIT;Also,anintra-ecozonesaleisexemptfromVAT.Zero-rated,ifundertheITH,andtransactionisanexportsale.

Taxable. ButcertainpurchasesbyaVAT-registeredsuppliertoaBOI-registered100%exportercanautomaticallyqualifyforVATzero-rating.PleaseseeBIRRevenueMemorandumOrderNo.9-00

Zero-rated,ifexportsales;taxable,iflocalsales

5)RealPropertyTax(RPT) Exempt Depends on the tax regime of the enterprise and not the type ofenterprise:ifentitledtoITH,subjecttoRPT.

However,machineriesattachedtorealestateshallbeexemptforthefirst3yearsofoperation;Ifsubjectto5%grossincometax,exemptfromRPT,exceptRPTonlandownedbyPEZAZoneDevelopers;

Ifsubjecttoregulartaxesbutalloweddutyandtax-freeimportation,RPTmustbepaid.

Taxable

6)LocalGovernmentUnit(LGU)Taxes&Fees Exempt Exempt,whileunderthe5%GITregimeExempt,while enjoying the ITH; theenterprise can claimexemptionunderSection2ofPEZAMemorandumCircularNo.2004-024dated24September2004.

Under PEZA Memorandum Circular No. 2004-024, PEZA-registeredenterprises,regardlessoftaxregime(includingthosesubjecttoregularnationalinternalrevenueandlocaltaxes)areexemptfromcompliancewith the business permit requirement. However, LGUs still requiresomePEZAfirmstosecurethebusinesspermit.

For IT enterprises, it depends on the location of the enterprise. TheMemorandum of Agreement between the PEZA and the particularcity (e.g., Makati, Taguig, Pasay) will determinewhich LGU fees areapplicable.

ThePEZAhasenteredintoaMemorandumofAgreementwiththeBIRon5March2007(RMCNo.15-07)reinformationsharingbetweenthePEZAand theBIR toeffectivelyadminister thegrantof incentives toPEZAentities.

Asageneralrule,exemptfromlocaltaxesundertheLocalGovernmentCodeforfour(4)years(non-pioneer)orsix(6)years(pioneer)fromthedateofregistration.

However,despitetheLocalGovernmentCodeprovision,someLGUswillstillassessLGUtaxesandfees.




7)OtherInternalRevenueTaxes Exempt

However,despitethesaidexemption,theenterprise’sobligationsasawithholdingtaxagentsubsist.

Income derived by an enterprise that is not related to its registeredactivity/iesshallbesubjecttotheregularinternalrevenuetaxes.

Depends on the tax regime of the enterprise: if subject to ITH orregular taxes, thensubject toother internal revenuetaxes, includingdocumentarystamptaxes;

Ifsubjectto5%GIT,thenexemptfromotherinternalrevenuetaxes.

Regardlessofthetaxregime,however,theenterprise’sobligationsasawithholdingtaxagentsubsist.

Income derived by an enterprise that is not related to its registeredactivity/iesshallbesubjecttotheregularinternalrevenuetaxes.

Taxable

8)ImportTaxes/DutiesonRawMaterialsandSupplies Taxandduty-freeimportationofrawmaterials,suppliesandallotherarticlesincludingfinishedgoods.

Thesaleofgoods(i.e.,merchandise)byaCFZ-registeredenterprisetoabuyerfromtheCustomsTerritory(i.e.,domesticsales)isconsideredatechnicalimportationmadebythebuyer.Suchbuyershallbetreatedasan importerthereofandshallbe imposedwiththecorrespondingimporttaxesandduties.

Tax and duty exemption is limited to the following enterprises:i)ExportManufacturingii)InformationTechnologyiii)Tourismiv)MedicalTourismv)Agro-Industrialvi)LogisticsServices

Thesaleofgoods(i.e.,merchandise)byaPEZA-registeredenterprisetoabuyerfromtheCustomsTerritory(i.e.,domesticsales)isconsideredatechnicalimportationmadebythebuyer.Suchbuyershallbetreatedasanimporterthereofandshallbeimposedwiththecorrespondingimporttaxesandduties.

Taxable,butallowedataxcreditonnationalinternalrevenuetaxes,wharfagedues,anddutiespaidonimportedrawmaterials,suppliesusedforexportedproducts

9)ImportTaxes/DutiesonCapitalEquipment,SpareParts,Materials&Supplies

Taxandduty-freeimportationofmachinery,equipment,suppliesandallotherarticlesincludingfinishedgoods.

Thesaleofgoods(i.e.,merchandise)byaCFZ-registeredenterprisetoabuyerfromtheCustomsTerritory(i.e.,domesticsales)isconsideredatechnicalimportationmadebythebuyer.Suchbuyershallbetreatedasan importerthereofandshallbe imposedwiththecorrespondingimporttaxesandduties.

Tax and duty exemption is limited to the following enterprises:i)ExportManufacturingii)InformationTechnologyiii)Tourismiv)MedicalTourismv)Agro-Industrialvi)LogisticsServices

Thesaleofgoods(i.e.,merchandise)byaPEZA-registeredenterprisetoabuyerfromtheCustomsTerritory(i.e.,domesticsales)isconsideredatechnicalimportationmadebythebuyer.Suchbuyershallbetreatedasan importerthereofandshallbe imposedwiththecorrespondingimporttaxesandduties.

Zeropercentdutyisimposedonimportedcapitalequipment,suppliesand spare parts for consigned equipment under certain conditions.PleaseseeSection2ofExecutiveOrderNo.528anditsimplementingrulesandregulations(DTI-BOIAdmin.OrderNo.01-06)

A registered enterprise with a bonded manufacturing warehouseshall be exempt from customs duties and national internal revenuetaxesonitsimportationofrequiredsupplies/sparepartsforconsignedequipmentorthoseimportedwithincentives.

10)BranchProfitRemittanceTaxof15% Exempt Exempt Taxable




11)OtherKeyConsiderations OneStopActionCenter(OSAC)forthefollowingservices:i)ClarkWorkingVISA&SpecialClarkInvestor’sVISAforforeignnationalsandtheir families, ii)Promptevaluationandapprovalwithin30-dayperiod, iii)One-stopandonlineprocessingcenter forallnationalandlocal government permits, iv) One-stop export documentation, andv)Fastandefficientelectronicmonitoringofmovementofgoodsandservicesinandoutofthezone(currentlyonpilottesting)

One Stop Shop for the following services: i)SpecialNon-ImmigrantVISAforforeignnationalsandtheirfamiliesii) Building and occupancy permits, iii) Import and export permits,iv) Harmonized customs process, v) Automated import and exportprocedures

Other Benefits:i) Exemption from LGU business permits, ii) Simplified registrationrequirementsandapproval,iii)PEZABoardmeets2xamonthensuringapprovalwithin2weeks,iv)24/7,fastandefficientservicetolocators

One Stop Action Center assists investors that do business in thePhilippines. It offers the following services: (i) Conducts businesscounseling, (ii) Monitors the status of investors’ registrationapplications, (iii) Informs investors of the action taken on theirapplicationwithintheshortestpossibletime

Special Investor Resident VISA for a minimum investment ofUSD75,000.00

Aregisteredenterprisemaybeallowedtoemployforeignnationalsinsupervisory,technicaloradvisorypositionsforfive(5)yearsfromthedateofregistration.

Simplification of customs procedures for importation of equipment,spare parts, raw materials and supplies and exports of processedproducts.

Theprivilegetooperateabondedmanufacturing/tradingwarehouse.

*Azero-ratedsaleofgoods,properties,and/orservices(byaVAT-registeredperson)isataxabletransactionforVATpurposesunderSections106(A)(2)and108(B)oftheTaxCode,butshallnotresultinanyoutputtax.However,inputtaxonpurchasesofgoods,propertiesorservices(includingleaseofproperties),andimportationofgoodsorproperties,relatedtosuchzero-ratedsaleshallbeavailableasataxcreditorrefundinaccordancewithexistingregulations.Underthistypeofsale,noVATshallbeshiftedorpassed-onbyVAT-registeredsellers/suppliersfromtheCustomsTerritoryontheirsale,barterorexchangeofgoods,propertiesorservicestothesubjectregisteredenterprise.

Ontheotherhand,aVAT-exempttransaction,referstothesaleofgoods,propertiesorservicesortheuseorleaseofpropertiesthatisnotsubjecttoVAT(outputtax)underSection109oftheTaxCodeandtheseller/supplierisnotallowedanytaxcreditofVAT(inputtax)onpurchasesrelatedtosuchexempttransaction.



CFZ VS. PEZA FOR VARIOUS TYPES OF ENTERPRISES/LOCATORS

LEGEND

Advantage

Disadvantage

Item EconomicZoneOwner/Developer&Utilities/FacilitiesProvider

ExportManufacturing

Information&CommunicationsTechnology/BPO

Logistics Tourism,MedicalTourism&Agro-

Industrial

Commercial,Retail&ServiceEstablishments

(Note1)

ResidentialBuildingDeveloper/Owner(Note1)

CFZ PEZA CFZ PEZA CFZ PEZA CFZ PEZA CFZ PEZA CFZ PEZA CFZ PEZA

1)IncomeTaxHoliday(ITH)(Note2)

None None None;butmayinsteadregisterwithBOIand

enjoyITHof4or6years,upto8years

4or6yrs,upto8years

None;butmayinsteadregisterwithBOIand


4or6yrs,upto8years

None None None;butmayinsteadregisterwithBOIand


4years,ITHmaybeincreased

None None None None

2) Taxon GrossIncome(Note 3)

5% 5% 5% 5% outrightor 5% afterITH Period

5% 5% outrightor 5% afterITH Period

5% NotApplicable

5% 5% outrightor 5% afterITH Period

5% NotApplicable

5% NotApplicable

3)IncomeTax

Exempt Exempt Exempt Exempt Exempt Exempt Exempt Taxable Exempt Exempt Exempt Taxable Exempt Taxable

4)ValueAdded Tax(VAT) (onpurchasesand sales)(Note 4)

Zero-Ratedor Exempt

Zero-Ratedor Exempt

Zero-Ratedor Exempt

Zero-Ratedor Exempt

Zero-Ratedor Exempt

Zero-Ratedor Exempt

Zero-Ratedor Exempt

Zero-ratedor Exempt

Zero-Ratedor Exempt

Zero-Ratedor Exempt

Zero-Ratedor Exempt

Taxable Zero-Ratedor Exempt

Taxable

CFZvs.PEZAforVariousTypesofEnetrprises/

Locators




LEGEND

Advantage

Disadvantage

Item EconomicZoneOwner/De-veloper&Utilities/Facilities

Provider

ExportManufacturing

Information&Communica-tionsTechnology/BPO


Industrial


(Note1)

ResidentialBuildingDevel-oper/Owner(Note1)


5)RealPropertyTax

Exempt Taxableonlywithrespecttolandownedbydevelop-pers;otherpropertiesareexemptfromRPT.

Exempt TaxableduringtheITHPeriod(exceptformachi-neries

installedandoperatedintheZoneforthe1st3years);Exemptwhen

subjectto5%GIT.

Exempt TaxableduringtheITHPeriod(exceptformachi-neries


subjectto5%GIT.

Exempt Taxable Exempt TaxableduringtheITHPeriod(exceptformachi-neries


subjectto5%GIT

Exempt Taxable Exempt Taxable

6) LGU Taxes& Fees

Exempt Exempt Exempt Exemptwhile

enjoying theITH or 5%GIT.

Exempt Exemptwhile

enjoying theITH or 5%GIT,

If locatedin a city

with a MOAwith PEZA,some LGUfees may beassessed.

Exempt Taxable/Applicable

Exempt Exemptwhile

enjoying theITH or 5%GIT.






LEGEND

Advantage

Disadvantage

Item EconomicZoneOwner/Developer&Utilities/FacilitiesProvider

ExportManufacturing

Information&CommunicationsTechnology/BPO


Industrial


(Note1)

ResidentialBuildingDeveloper/Owner(Note1)


7)ImportTaxes&Du-tiesonRawMaterials&Supplies

Exempt Taxable Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt Taxable Exempt Taxable

8) ImportTaxes &Duties onCapitalEquipment& SpareParts

Exempt Taxable Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt Taxable Exempt Taxable

9)BranchProfitRemit-tanceTax

Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt Exempt Taxable Exempt Taxable

10) OtherInternalRevenueTaxes(Note 5)

Exempt Exempt Exempt Exemptwhen

subject to5% tax;taxableduring ITHperiod.

Exempt Exemptwhen


Exempt Taxable Exempt Exemptwhen


Exempt Taxable Exempt Taxable



CFZ VS. PEZA FOR VARIOUS TYPES OF ENTERPRISES/LOCATORS Note1:PEZA confirmed that residentialhousingactivities cannotbe registeredwithPEZA,evenifsuchenterprisesmaybelocatedwithinaPEZAzone.

Note2: CFZ-registeredenterprises cannot registerwith theBOI, and simultaneouslyavailofBOIandCFZincentives.Likewise,CFZ-registeredenterprisescannotregisterwithPEZA,andsimultaneouslyavailofBOIandCFZbenefits.

AsconfirmedbyPEZA,thePEZAeconomiczones/parkscanonlyhavespecificlocators,asfollows:

a. Exportmanufacturingzones-exportmanufacturers,ITfirmsandagro-industrialfirms;b. ITparks–ITfirms;c. Tourismzones–tourismfirms;d. Medicaltourismzones–medicaltourismfirms;ande. Agro-industrialzones–agro-industrialfirms.

Developers, logistics services companies, commercial and retail establishment and residentialhousingdeveloperscanbelocatedintheforegoingzones.

ABOI-registeredenterprisecanavailofITHof4or6years,whichcanbeextendedupto8years.

Note3:Theentire incomeoftheCFZ-registeredenterprisewillbesubjecttonationalinternalrevenuetaxesiftheirincomefromlocalsourcesoutsidetheCFZorPEZAterritoryexceeds30% of their income from all sources. PEZA-registered enterprises whose income from localsourcesoutsidethePEZAwillremainsubjecttoPEZAtaxincentive,buttheincomeinexcessofthethresholdwillbesubjecttonationalinternalrevenuetaxes.(DepartmentofFinanceOrderNo.3-08;BIRRevenueMemorandumCircularNo.74-99)

Note4:ThesaleofgoodsandservicesbyCFZ-registeredenterprisessubjecttofivepercent5%GrossIncometax(GIT)isexemptfromVAT.ThesaleofgoodsandservicesbyPEZA-registeredenterprisessubjecttoITHorregulartaxesmaybesubjecttozero-ratedVATifthetransactionisanexportsaleoratransactionsubjecttozero-ratedVATundertheTaxCode.ThesaleofgoodsandservicesbyPEZA-registeredenterprisessubjectto5%grossincometaxisexemptfromVAT.

ForCFZ-registeredenterprises,thepurchaseofgoodsandservicesisexemptfromVATifthegoodsandservicesarepurchasedwithinthezone,whilethepurchaseofgoodsandservicesfromtheCustomsTerritory (outside thezone) is subject to zero-ratedVATon thepartof the seller. ForPEZA-registered enterprises, the purchase of goods from other PEZA-registered enterprises isexemptfromVAT,whilethepurchaseofgoodsfromtheCustomsTerritoryissubjecttozero-ratedVAT. ThepurchaseofservicesbyPEZA-registeredenterprises issubjecttozero-ratedVAT if theservicesarepurchasedfromtheCustomsTerritory,orfromPEZA-registeredenterprisessubjecttoregulartaxes,suchastheLogisticsServicecompanies,orITH.Ontheotherhand,thepurchaseofservicesbyPEZA-registeredenterprisesisexemptfromVATifthesearepurchasedfromPEZA-registeredenterprisessubjecttofivepercent5%Gross Incometax(GIT) in lieuofnationalandlocaltaxes.

Note5:Theexemptionfromotherinternalrevenuetaxesdoesnotcoverwithholdingtaxes.Also,enterprisesundertheITHortheregulartaxregimeareliabletopayinternalrevenuetaxes,suchasthedocumentarystamptax.



RELATED LINKS

The O�cial website of thePhilippine Government

http://www.gov.ph

Board of Investmentshttp://www.boi.gov.ph

Philippine Economic Zone Authority

http://www.peza.gov.ph

Bureau of Internal Revenuehttp://www.bir.gov.ph

Clark Freeport Zonehttp://www.clark.com.ph

O�cial Philippine Tourism

http://www.tourism.gov.ph

Clark Airporthttp://www.clarkairport.com

Province of Pampanga

http://pampangacapitol.com

City of Angeleshttp://www.angelescity.gov.ph

City of Mabalacat

http://www.mabalacat.gov.ph

Peregrine Development International Inc.http://www.peregrinedc.com

KGL – Investment Companyhttp://www.kglinvest.com

ORGANIZATIONAL MEMBERSHIP

Business Processing Associationof the Philippines – BPA/P

http://www.bpap.org

Clark Investors and LocatorsAssociation - CILA

http://www.cila.biz

Philippines Business Leaders Forum - PBLFhttp://www.philippinesforum.com

European Chamber of Commerceof the Philippines - ECCP

http://www.eccp.com

American Chamber of Commerceof the Philippines - AMCHAM

http://www.amchamphilippines.com

US - Asean Business CouncilWashington DC, USA

http://www.us-asean.org

Spur Road 2, Industrial Estate 5,Clark Freeport Zone,

Pampanga, Philippines 2023Telephone: (63) 45 499 1100

Fax: (63) 45 499 1104

www.gglc.ph

Disclaimer

This GGLC Locator and Investor Guide is for informational purposes only, and should not be relied upon as the sole source of information relating to its content. Neither does this Guide constitute, nor is it meant as a substitute for professional legal advice. Neither Global Gateway Development Corporation nor Peregrine Development International, Inc. shall be responsible for any loss, damage (whether special or consequential), liability, injury, claims, and/or any manner of inconvenience, arising out of, or in relation to the use of the information contained in this Guide. In other words, we encourage you to exercise due diligence in using any information in this Guide, and to obtain your required information from as many relevant sources as possible.

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