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Understanding Work Visa Requirements in The Philippines

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Understanding Work Visa Requirements in The Philippines

Understanding Work Visa Requirements in The Philippines

With its growing economic influence in Southeast Asia, the Philippines has become an attractive market for global talent. Yet, onboarding foreign professionals is not without its complexities. Employers must adhere to a dual-system process that involves securing both a work permit from the Department of Labour and Employment (DOLE) and a visa from the Bureau of Immigration.

In this guide, we break down the essential requirements, common pitfalls, and key compliance practices to help you navigate the Philippine employment landscape with confidence.

Table Of Content

Work Permit vs Work Visa in the Philippines

In the Philippines, the terms “visa” and “permit” are not interchangeable. Understanding the distinction is key to navigating the country’s legal employment landscape.

CategoryWork Permit (AEP)Work Visa (9(g))
Issued ByDepartment of Labour and Employment (DOLE)Bureau of Immigration (BI)
PurposeCertifies that an employer can hire a foreign national for a roleGrants legal entry and stay for employment
Who AppliesEmployer, on behalf of the foreign workerEmployer or worker, after AEP is secured
When RequiredBefore hiring a foreign employeeAfter AEP approval and before starting long-term employment
Validity Period1 to 3 years, renewable1 to 3 years, extendable depending on the employment contract
TransferableNo – tied to a specific employerNo – a new visa is needed if the employer changes
Key RequirementJob postings must be made to ensure that no Filipino can fill the roleMust present an approved AEP and BI clearance
Work CommencementCannot begin without it (or with a Provisional Work Permit)Can begin only after the visa is granted or with a PWP in the interim


What are the Common Types of Philippines Work Visas?

The Philippines provides a range of work-related visa options, but the following are the most relevant for foreign professionals:

1. 9(g) Pre-arranged Employment Visa

For long-term employment with a Philippine-based company. Requires an approved AEP and is typically valid for 1–3 years, renewable.

2. Special Work Permit (SWP)

Designed for short-term roles or urgent assignments under 6 months. Ideal for consultants, seasonal workers, or temporary contractors.

3. Provisional Work Permit (PWP)

PWP is issued while the 9(g) visa is still being processed. Allows a foreign national to begin working legally in the interim.

4. Special Non-Immigrant Visa [47(a)(2)]

Granted to employees of BOI or PEZA-registered companies under special arrangements. It is usually faster to process and is often used for project-based work.

5. Temporary Visitor’s Visa for Business Purposes

Granted to those engaging in short-term business meetings or consultancy without local employment.

6. Special Non-Immigrant Visa under E.O. 226

Issued to investors or executives under specific investment incentives.

7. International Treaty Trader / Investor Visa

Applicable for citizens of treaty nations under-investment or trade agreements.


Why is the AEP Mandatory Before any Work Visa Application?

Before applying for any employment visa , foreign nationals must obtain the Alien Employment Permit (AEP) from the Department of Labour and Employment (DOLE). This permit confirms that the applicant has been hired for a position for which no qualified Filipino candidate is available.

The AEP is employer-specific and is generally valid for 1 to 3 years, in alignment with the employment contract. Without a valid AEP, the application for a Philippines work visa, such as the 9(g), cannot proceed.

Key Requirements:

  • Duly completed application form
  • Notarised employment contract and company profile
  • SEC registration or DTI certificate
  • Mayor’s business permit
  • Copy of a valid passport
  • Proof of publication of job vacancy (local newspaper)
  • For reissuance: a copy of the existing valid AEP must also be submitted


What are the Requirements to Obtain a Philippine Work Visa?

Below is a comparative breakdown of the documentation required for securing the Alien Employment Permit (AEP) and the 9(g) Work Visa:

Document AEP (Alien Employment Permit) 9(g) Work Visa
Completed Application Form Required Required
Employment Contract and Supporting Corporate Documents Required Required
Valid Passport and Visa Required Required
Mayor’s Business Permit Required Not Required
For Renewals: Previously Issued AEP Copy Required (for renewals only) Not Applicable
Notarised Certification of Workforce Composition Not Required Required
Approved AEP from DOLE Not Applicable Required (must submit an approved AEP for processing)
Published Notice of Job Vacancy Not Required Required
Bureau of Immigration (BI) Clearance Certificate Not Required Required
Alien Certificate of Registration (ACR) I-Card Not Required Required
SEC Documents and Company Profile Not Required Required


How long does the Work Visa Application Process take in the Philippines?

Securing legal work status in the Philippines is a multi-stage process that demands careful timing. Two key government bodies are involved, DOLE for the AEP, and the Bureau of Immigration (BI) for the 9(g) Work Visa.

1. AEP Application (DOLE):

Usually processed within 7 to 15 working days, assuming documents are in order and no objections arise.

2. 9(g) Visa Application (BI):

It can take 6 to 12 weeks, depending on the case’s complexity, the completeness of submissions, and BI’s current workload.

During this waiting period, eligible applicants may apply for a Provisional Work Permit (PWP), a temporary authorisation that allows them to begin working legally until their 9(g) visa is approved.

Work Visa Application Flow in the Philippines

            Start         

↓

Apply for Alien Employment Permit (AEP)

 Issued by DOLE (7–15 working days)

↓

Apply for Provisional Work Permit (PWP) [Optional]

  Ministry of Human Resources (MOHRSS) 

↓

                    Submit 9(g) Visa Application 

    Processed by Bureau of Immigration (6–12 weeks)

↓

                  Receive a 9(g) Visa and Begin Full Employment Legally


What Happens when You Switch Jobs or Extend Your Stay?

Foreign professionals must understand that both the work permit and work visa are non-transferable and tied to the sponsoring employer.

  • Switching employers?  New AEP and 9(g) visa applications are mandatory.
  • Seeking extension? Update your documentation before expiry.
  • Ending employment? Visa status becomes void.
  • Any lapse in timely updates could lead to blacklisting or deportation.

Failure to update immigration status can result in penalties, deportation, or being blacklisted by Philippine authorities.

What are the Key Considerations for Hiring Foreign Nationals in the Philippines?

When hiring foreign nationals in the Philippines, employers must navigate a series of responsibilities to ensure full legal compliance. These include securing the proper work permits, meeting statutory benefit requirements, and maintaining up-to-date immigration records. Here’s a breakdown of what employers need to know:

1. Work Permit and Visa Requirements

Employers must secure valid work permits and visas for foreign employees before onboarding them. This ensures that employees are legally permitted to work in the Philippines. Key permits include the Alien Employment Permit (AEP) and the 9(g) work visa.

2. Statutory Compliance and Employee Registration

Employers are responsible for ensuring that employees meet the necessary statutory requirements, including the provision of benefits. Employees must be registered with the Social Security System (SSS), PhilHealth, Pag-IBIG, and tax authorities. Employers should also submit regular reports to the Department of Labour and Employment (DOLE).

3. Application Fees and Legal Costs

Securing work permits and visas comes with associated costs. Typical fees include:

  1. AEP: US$160
  2. 9(g) Visa: US$360 (depending on duration)
  3. SWP and PWP: US$110 to 180
    Additional legal or agency fees may apply, depending on whether third-party services are engaged.

4. Visa Duration and Renewal

Work visas in the Philippines come with specific validity periods:

  1. 9(g) Visa: Valid for 1 to 3 years, renewable
  2. SWP: Valid for 3 months, extendable up to 6 months
  3. PWP: Valid for 3 months or until the 9(g) visa is issued.

5. Maintaining Legal Status

Once employees are authorised to work, they must comply with ongoing legal requirements:

  1. Report annually to the Bureau of Immigration (BI).
  2. Keep immigration and passport documentation valid at all times.
  3. Renew work permits and visas well in advance of their expiry.

Failure to comply with these responsibilities can result in fines, penalties, or even the cancellation of the employee’s legal work status in the Philippines.

Compliance Risks and Common Mistakes to Avoid while Applying for Work Visa in the Philippines

The Philippine government takes the employment of foreign nationals seriously. Even minor lapses in compliance can result in visa denial, penalties, deportation, or blacklisting. To avoid such setbacks, employers and foreign professionals must pay close attention to every legal requirement.

Here are the Top 5 Mistakes that can jeopardise your work visa status in the Philippines:

1. Starting work without a PWP or 9(g) visa.

→ Working without legal authorisation is a direct violation of immigration law.

2. Failing to renew the AEP before expiry.

→ Expired permits invalidate your visa and employment status instantly.

3. Choosing the wrong visa category.

→ Applying under an incorrect classification can delay or void your application.

4. Not registering with SSS, PhilHealth, and Pag-IBIG.

→ Mandatory for foreign employees; failure may lead to penalties during audits.

5. Inconsistent job titles in contracts and applications.

→ Mismatched details between submitted documents trigger red flags at DOLE or BI.

conclusion

Securing the right to work legally in the Philippines requires more than just submitting forms; it demands a thorough understanding of the country’s employment and immigration landscape, coordinated documentation, and full compliance with the requirements of multiple agencies.

From the Alien Employment Permit (AEP) to the 9(g) Pre-arranged Employment Visa, each step plays a vital role in legitimising foreign employment. Any misstep can lead to costly delays or legal setbacks.

That’s where Galaxy Group becomes your trusted partner, offering comprehensive support from eligibility assessment to end-to-end application and compliance management. Galaxy Group’s expertise in Philippine immigration and employment regulations provides businesses with the confidence to manage these critical tasks efficiently, helping them stay compliant while building a stronger workforce.

For a broader understanding of how international companies can legally employ foreign nationals in the Philippines, including key strategies beyond visa requirements, explore our in-depth guide here.

Ready to Onboard Foreign Talent?

Discover how Galaxy Group helps businesses scale faster with compliant hiring in the Philippines.

Start Your Hiring Journey

FAQ’S

Can I start working while waiting for my 9(g) visa?

Yes, if you obtain a Provisional Work Permit (PWP). It allows legal employment while the 9(G) visa application is in process.

Yes. Both the AEP and 9(g) visas are employer-specific. A change in employer requires reapplication for both documents.

Working without authorisation can result in fines, deportation, visa rejection, and blacklisting. It also exposes the employer to legal penalties.

Overstaying can lead to daily fines, deportation, visa bans, or detention. Galaxy ensures proper tracking and renewal to prevent such issues.

A PWP is typically valid until the 9(g) visa is granted, usually for a maximum of 3–6 months. It cannot be used indefinitely.

12 Tax Deductions for Independent Contractors & Businesses

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12 Tax Deductions for Independent Contractors & Businesses

12 tax deductions for independent contractors & businesses – Galaxy graphic with city skyline and calculator

For independent contractors and businesses operating across the Asia-Pacific region, understanding the tax deduction landscape is not merely advantageous; it is essential. Strategic use of business tax deductions, from everyday business expenses to self-employed tax reliefs, can significantly reduce taxable income while ensuring full compliance with local regulations.

This comprehensive guide examines key deduction categories, including bank charges, home office costs, professional fees, and pension contributions, across five major APAC jurisdictions: China, Taiwan, Hong Kong, the Philippines, and Singapore.

If you’re a consultant in Hong Kong or a freelancer based in Manila, knowing what qualifies as a deductible expense can sharpen your financial strategy and strengthen your Business’s fiscal health.

Table Of Content

Why Deductions Matter for Independent Contractors & Businesses?

Business tax deductions, self-employed tax deductions, and standard business deductions enable contractors and small businesses to reduce taxable income, thereby optimising cash flow and enhancing profitability. Identifying legitimate deductions, from bank charges to professional fees, can make a substantial difference in one’s financial bottom line.

Across the APAC (Asia-Pacific) region, tax deduction rules vary but share a common emphasis on documentation and business relevance.

In China, Sole proprietors can deduct business-related expenses, such as telecommunications and materials, provided accurate invoices support them.

In Taiwan allows contractors to benefit from standard deductions or itemise costs, such as travel and equipment, if the thresholds are met.

In Hong Kong, only expenses that are “wholly, exclusively and necessarily” incurred for generating profits are deductible.

The Philippines requires detailed receipts and logs for costs, including bank charges and transport, while Singapore’s IRAS permits deductions for mobile, travel, and professional fees when properly documented.

Understanding Tax Deduction Basics


What Makes an Expense Deductible?
Criteria Description
Wholly for Business Must be directly tied to income-generating activities
Documented Supported by receipts, invoices, contracts, or usage logs
Reasonably Apportioned For mixed-use items, only the business-related portion is deductible
Permitted by Jurisdiction Must fall within allowable expense categories under local tax laws
Consistent Application Must be claimed consistently and not duplicated across categories

Across the APAC region, authorities place a strong emphasis on clarity, reasonableness, and supporting records. From pro-rata claims on shared utilities in Singapore to strict bookkeeping practices in China, accurately separating personal and business use is key to maintaining compliance and maximising allowable deductions.

What are the 12 Essential Tax Deductions for APAC Independent Contractors and Businesses?

1. Home Office and Utilities 

Home-based contractors can claim a proportion of costs, such as rent, electricity, and broadband, if the workspace is dedicated to business purposes.

China: The Home office must be allocated; expenses like electricity and internet are deductible if supported by separate invoices.

Taiwan: Utilities and rent may be claimed based on office square meter usage.

Hong Kong: Deductions of home-related costs are allowed under personal assessment with designated workspace allocation.

Philippines: Home-office share of expenses is deductible with a formal schedule of use.

Singapore: The Inland Revenue Authority of Singapore (IRAS) provides home-office deductions when space is used for business more than 50% of the time.

2. Vehicles and Travel Expenses

Claim mileage, parking fees, public transportation, accommodation, and subsistence expenses for business travel, along with complete logs and receipts.

China: Travel allowances are documented via invoices and log entries.

Taiwan: Daily travel logs are required for public transport and mileage.

Hong Kong: Only wholly business travel qualifies; itineraries are needed.

Philippines: Mileage logs and receipts are mandatory for Bureau of Internal Revenue (BIR) compliance.

Singapore: Must document the purpose and amount for the Inland Revenue Authority of Singapore (IRAS) scrutiny.

3. Bank Charges and Financial Fees

Deduct business account fees, foreign exchange charges, loan interest and merchant handling fees when supported by documentation.

China: Bank charges on business accounts are allowable with proper invoices.

Taiwan: Transaction fees and interest must be proportionate to business banking.

Hong Kong: Deduction is solely required for business usage.

Philippines: The Bureau of Internal Revenue (BIR) accepts documentation for processing and remittance fees.

Singapore: IRAS permits businesses to claim interest in banking and foreign exchange transactions.

4. Equipment, Tools and Software

Assets such as laptops, smartphones, and industry-specific software can be deducted either through capital allowances or immediate expensing, subject to jurisdictional thresholds.

China: Equipment may be capitalised and depreciated over time by the State Administration of Taxation (SAT) asset guidelines.

Taiwan: Computers and gadgets can be fully deducted if below the fixed cost ceilings.

Hong Kong: Depreciation allowances are available for qualifying capital items.

Philippines: An annual investment allowance of up to ₱7.5M enables the immediate deduction of qualifying assets.

Singapore: The Section 19A allowance expedites full deduction of IT assets up to S$100,000.

5. Professional Fees and Subscriptions

Accountancy, legal fees, membership subscriptions, and software services are recognised common business deductions when incurred wholly for business purposes.

China: Professional fees for licences or consultancy services are deductible with valid tax invoices.

Taiwan: Payment for professional memberships, training or legal advice qualifies as a business expense.

Hong Kong: Annual fees for relevant professional bodies are tax-deductible.

Philippines: BIR allows deductions for paid subscriptions to professional associations.

Singapore: IRAS permits claims for licensed professional services, legal advice, and software used for business purposes.

6. Marketing and Advertising

Promotional materials, website development, adverts, and branding are deductible when directly supporting revenue growth.

China: Licensed marketing expenses count if invoices are provided.

Taiwan: Website and promotional costs are allowed if business-related.

Hong Kong: Advertising and marketing expenses are fully claimable.

Philippines: Deductible with receipts for ads and campaigns.

Singapore: The Productivity and Innovation Credit (PIC) scheme allows enhanced deductions for websites and software.

7. Training and Development

Deduct fees for courses, seminars, certifications, or workshops enhancing business performance.

China: “Special deductions” require SAT registration and documentation.

Taiwan: Directly related development programs are deductible.

Hong Kong: Business-relevant training costs allowed.

Philippines: The Green Jobs Act enhances deductibility for approved technical training.

Singapore: IRAS recognises professional development expenses with receipts.

8. Insurance Premiums and Risk Management

Insurance costs for professional indemnity, liability, health, or equipment protection are deductible business expenses.

China: Valid invoices are required to claim business insurance.

Taiwan: Premiums for occupational coverage are allowable.

Hong Kong: Liability and indemnity premiums qualify.

Philippines: BIR permits claims for business insurance policies.

Singapore: Life and critical illness insurance relief available.

9. Pensions and Retirement Contributions

Contributions to recognised schemes (e.g., CPF, MPF) serve as deductible items, effectively reducing taxable income.

China: Self-employed social insurance contributions are deductible.

Taiwan: Labour insurance and pension contributions qualify.

Hong Kong: Mandatory Provident Fund (MPF) contributions are deductible under tax rules.

Philippines: Voluntary retirement schemes are eligible for tax incentives.

Singapore: Central Provident Fund (CPF) contributions lower assessable profits for incorporated business owners.

10. R&D and Innovation Incentives

Qualifying R&D activities may be eligible for enhanced deductions or credits, thereby reducing tax liability.

China: R&D claims range from 50–100% extra deduction.

Taiwan: Incentives exist for software and innovation investments.

Hong Kong: Under the Inland Revenue Department (IRD)’s enhanced tax deduction regime, the first HKD 2 million of qualifying Research and Development (R&D) expenditure is eligible for a 300% tax deduction.

Philippines: Deduction incentives apply for certified research.

Singapore: R&D activities are eligible for a deduction of up to 400% under the Enterprise Innovation Scheme (EIS).

11. Sustainability and Green Initiatives

Investments in sustainable and green initiatives yield additional deductions beyond normal business expenses.

China: Emerging green technology rebates apply to qualifying firms.

Taiwan: Environmental improvements may gain extra incentives.

Hong Kong: Energy-efficient measures are eligible for tax allowances.

Philippines: Greener projects qualify for additional deductions under the Green Jobs Act.

Singapore: Tax deductions are available for approved energy-saving equipment and sustainability efforts.

12. Compliance, Documentation and Record-Keeping

Deductibility requires robust documentation, including official invoices (e.g., Chinese fapiaos, Taiwanese tax stamps), logs, receipts, and storage for a period of 5–7 years.

China: Fapiaos issued by service providers form the basis for deductions.

Taiwan: Proper stamps and records are mandatory for audit defence.

Hong Kong: The IRD mandates a 7-year retention period for personal assessment records.

Philippines: BIR requires logs and receipts for verification.

Singapore: The IRAS enforces a 5-year record-retention policy, which includes travel and utility proofs.

Conclusion

In today’s dynamic regulatory environment, understanding and optimising your business tax deductions is essential in building a financially resilient and compliant enterprise. From reclaiming home-office utilities and bank charges to strategically managing self-employed tax deductions and regional allowances, each jurisdiction across APAC presents unique challenges and opportunities.

At Galaxy Group ,we specialise in helping independent contractors and businesses navigate this complexity with precision. Our tailored, jurisdiction-specific support ensures that your deductions are not only maximised but also compliant with local tax laws in China, Taiwan, Hong Kong, the Philippines, and Singapore. With our expertise, you can confidently reduce your tax burden while freeing up capital to reinvest in what matters most: growth, innovation, and your future.

Get Clarity on Business Tax Deductions

From bank charges to software tools, we help independent contractors and SMEs stay compliant while reducing taxable income.

Speak to a Tax Advisor

FAQ’S

What are business tax deductions, and why are they important?

Business tax deductions refer to legitimate business expenses that can be subtracted from your gross income to reduce your taxable income. They are essential for improving cash flow, minimising tax liability, and ensuring compliance with local laws.

Standard business deductions include home office utilities, travel expenses, professional fees, marketing costs, bank charges, and equipment purchases. The exact scope varies by jurisdiction, so it’s crucial to review local tax guidelines or consult a regional expert, such as Galaxy Group.

Yes, bank charges related to business accounts, such as transaction fees, loan interest, and foreign exchange charges, are generally deductible across APAC countries, provided they are substantiated with official bank statements and used solely for business purposes.

Understanding how to reduce taxes as an independent contractor involves maintaining accurate records, claiming all eligible deductions (e.g., equipment, insurance, utilities), and apportioning shared expenses correctly. Seeking localised tax advice ensures you’re maximising every opportunity legally and efficiently.

Self-employed tax deductions typically include business-related costs such as professional development, marketing, insurance, pension contributions, and workspace expenses. These deductions help lower your taxable income and vary by country, depending on tax authority definitions.

A View of The Key Challenges in Attracting Top Talent in Singapore

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A View of The Key Challenges in Attracting Top Talent in Singapore

Business professionals walking with resume icons in the background, representing hiring challenges in Singapore.

Singapore has held a distinguished position as a strategic gateway to Asia and a global business hub. With its pro-business environment, highly developed infrastructure, and emphasis on innovation, it continues to attract international enterprises across sectors. However, this forward momentum brings with it a set of talent-related challenges.

From the pressures of digital transformation and evolving job expectations to rising operational costs and shifting global workforce dynamics, businesses now face significant obstacles in attracting and retaining top talent. 

In this blog, we explore these pressing issues and share strategic recommendations, drawing on our expertise as a leading provider of EOR, payroll, compliance, and workforce support services across the Asia-Pacific region.

Explore how Galaxy EOR solutions in Singapore can simplify your hiring process.

Table Of Content

What are the Key Workforce Challenges Employers Face in 2025?

In today’s fast-changing world, employers are under growing pressure to keep up with a rapidly evolving workforce landscape. Organisations must now contend with widening skills gaps, heightened global competition for talent, inflationary pressures, and an evolving employee mindset. To navigate this terrain successfully, organisations need to be intentional about how they approach pay, flexibility, inclusivity, and how their brand is perceived by current and future employees.

Let’s explore what these changes really mean for employers and how they can rise to meet them.

1. Widening Skills Gap and Digital Transformation

Singapore’s Smart Nation vision has driven substantial investment in emerging technologies like AI, cybersecurity, blockchain, and green innovation. However, the demand for specialised talent continues to outpace supply. Companies often face prolonged hiring cycles due to a limited local talent pool and increasingly rely on foreign hires, adding layers of complexity around visas, payroll, and compliance.

2. Global Competition & Talent Shortage

As work becomes increasingly global, Singaporean employers are competing not just locally but with international firms and remote-first start-ups. This is driving higher turnover in sectors like tech, healthcare, and finance, as talent seeks better pay or flexibility. SMEs, in particular, struggle to retain staff amid stiff competition and limited employer branding.

  • 83% of firms report talent scarcity, with transport (91%) and ICT sectors (88%) hit hardest.

  • Salary demands are cited as a challenge by 38% of employers, while 36% report fierce competition among candidates.

  • Flexibility and purpose are becoming more important to mid-career professionals than salary alone.

3. Cost of Living vs Compensation

Singapore’s status as one of the world’s most expensive cities continues to exert pressure on talent attraction and retention, particularly among early-career professionals and international hires. Rising costs in housing, transport, and daily living are prompting candidates to demand higher compensation to sustain a decent quality of life. This places a significant strain on employers, especially SMEs and start-ups, who often operate within tight payroll budgets.

According to recent data, Singapore’s median income rose from SGD 5,197 in 2023 to SGD 5,500 in 2024. Job movers, especially in high-demand fields like AI and data, are securing salary jumps of 12–20%, while those staying in their roles typically see more modest increases of 2–5%, in line with inflation. 

As a result, some professionals are opting for remote roles based in lower-cost countries while still seeking the benefits of global career exposure.

Salary Increase in 2024

Job Movers (AI/ Data Roles)
Existing Employees (Same Role)
Unchanged/Below Inflation Adjustments

4. Employer Branding and Diversity Imperative

Today’s Gen Z and millennial workforce is increasingly values-driven, prioritising inclusivity, ethics, and purpose when choosing employers. Yet many organisations still struggle to align their employer brand with these expectations. Cultural misalignment, unclear company values, and unconscious bias in hiring continue to hinder progress. 

  • 72% of organisations recognise DEI (Diversity, Equity, and Inclusion) as a growing priority.

  • Yet only 40% have formal DEI policies in place.

  • 62% of Gen Z candidates would decline offers from companies that don’t clearly commit to DEI.

5. Flexibility and the New Work Paradigm

The COVID-19 pandemic catalysed a major shift toward remote and hybrid work. For many employees, flexibility is now a fundamental expectation rather than a perk. Remote and hybrid models have become standard expectations for recruitment.

  • 65% of companies offer hybrid arrangements

  • 31% of firms will increase contract/freelance hires in 2025, doubling from 2024

  • 54% of employers rate AI literacy as vital, yet only 15% use AI tools in recruitment

Challenges vs Strategic Solutions faced by Employers in Singapore

As workforce dynamics continue to evolve, businesses must go beyond short-term fixes and adopt forward-thinking strategies that attract, engage, and retain top talent. Employers must take a comprehensive approach to remain competitive, given the rise in demands for flexibility and inclusion, skills-based hiring, and global compliance.

The following ten solutions offer a strategic roadmap for building a future-ready workforce in today’s increasingly borderless, values-driven, and tech-enabled world:

Challenge Strategic Solutions
1. Employer Value Proposition (EVP) unclear Build a strong EVP and clearly communicate your mission, values, career growth, and well-being promises.
For example, highlight innovation-led initiatives, ESG efforts, and work-life harmonisation in employer branding.
2. Cost-of-living pressures Offer holistic compensation.
Beyond salaries, include housing and transport allowances, wellness support, and flexible-work stipends, especially given Singapore’s high living costs.
3. Complex cross-border hiring Accelerate Onboarding with EOR & Visa Support. Use Employer of Record (EOR) services for fast, compliant hiring.
Leverage Singapore’s ONE Pass for high-calibre global talent (S$30k/month or outstanding credentials), Tech.Pass for senior tech leaders (S$20k/month), and the Employment Pass for professionals earning at least S$5,000/month with relevant qualifications.
4. Remote work policy lag Implement hybrid workforce models and establish clear hybrid frameworks that ensure consistent engagement, productivity, and well-being across locations.
5. Skills shortage Shift to Skills-Based Hiring.
Prioritise capabilities and experience over degrees. A Deloitte survey found 89% of executives believe skills-based hiring enhances diversity and performance.
6. Talent stagnation Upskill & Reskill Internally.
Deliver targeted training and mentorship. With 50% of employees needing reskilling by 2025 (WEF), this is vital for agility and retention.
7. Compliance risks Ensure Remote Compliance.
Use regional experts to manage payroll, tax, and statutory requirements, and keep pace with evolving labour laws, particularly for remote hires.
8. Weak employer brand Run employer branding campaigns.
Encourage employee storytelling, showcase diversity efforts, and highlight ESG or social-impact work. Strong branding lowers cost-per-hire by ~43%.
9. Unconscious bias Adopt Bias-Aware Hiring.
Use structured interviews, blind CVs, and interviewer training. Diverse teams outperform peers by 35%.
10. Diversity, Equity, and Inclusion (DEI) under-action Align with DEI standards.
Introduce formal policies and partner with HR/DEI consultants. Over 60% of Gen Z candidates decline offers lacking clear DEI commitments, making this a retention and attraction imperative.

Conclusion

The competition for talent in Singapore is no longer just about offering the highest salary. It requires a multi-dimensional approach that aligns with the evolving values and expectations of the workforce.

To succeed, organisations must:

  • Adopt skills-first and flexible hiring practices

  • Clearly communicate employer brand and purpose

  • Provide future-focused, holistic compensation

  • Enable borderless and inclusive workforce strategies

With over a decade of experience, Galaxy Group is uniquely positioned to help businesses address these challenges through its comprehensive solutions, including payroll outsourcing, EOR services, compliance advisory, and workforce strategy consulting, empowering organisations to scale confidently and compliantly across Asia.

Facing workforce challenges in Singapore or across Asia?

Galaxy Group’s proven strategies and tailored support ensure compliant, efficient workforce solutions for your business.

Schedule a consultation

FAQ’S

How can companies legally hire remote workers across Asia?

Engaging an Employer of Record (EOR) expert like Galaxy Group allows companies to hire in different countries without setting up a legal entity, ensuring full compliance.

A well-defined EVP helps communicate your company’s purpose, culture, and benefits—crucial for attracting values-driven talent. With 69% of job seekers evaluating a company’s brand before applying, a clear EVP directly influences recruitment success and retention.

Galaxy Group provides end-to-end workforce support solutions across Asia-Pacific, including:

  • Payroll outsourcing and payroll tax management

  • Employer of Record (EOR) for compliant employment and onboarding

  • Cross-border compliance advisory

  • Talent and HR strategy consulting

These services help companies hire faster, stay compliant, and scale confidently.

An EOR is a third-party provider that legally employs your talent on your behalf. It handles payroll calculation, payroll taxes, benefits, and compliance, enabling you to hire in new markets without setting up a local entity. This is ideal for companies expanding in APAC or hiring remote talent across borders.

Yes. Surveys have shown that hybrid work is now expected by a majority of the workforce, especially in knowledge-based industries.

Absolutely, SMEs can compete by emphasizing purpose-driven roles, career development opportunities, and flexible work setups. With the right support from EOR partners like Galaxy Group, smaller firms can hire employees in Singapore and access top-tier global talent.

You can use an Employer of Record (EOR) to streamline cross-border hiring without setting up a local entity. For top-tier professionals, Singapore offers specialized work passes:

  • ONE Pass: For high-earning or exceptional global talent (≥ S$30,000/month or equivalent achievements).

  • Tech.Pass: For senior tech leaders, founders, or professionals with strong credentials (≥ S$20,000/month or proven expertise).

  • Employment Pass: For foreign professionals earning at least S$5,000/month with acceptable qualifications and relevant experience.

What are China’s Labour Laws and What do they Mean for Employers?

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What are China’s Labour Laws and What do they Mean for Employers?

A person reviews a document titled "China’s Labour Laws" at an office desk with cityscape in background.

In recent years, China has reaffirmed its position as a global powerhouse, not only in manufacturing but also in technology, pharmaceuticals, and logistics. For businesses seeking to tap into this vast economic opportunity, navigating the country’s labour laws is a non-negotiable requirement.

In this blog, we will break down the most critical areas of China’s labour laws, covering everything from employee contracts and social insurance to foreign hiring regulations and legal termination procedures. 

If you’re entering the Chinese market for the first time or expanding your operations, this guide from Galaxy Group provides both clarity and strategic direction.

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Why China’s Labour Laws Matter Now More Than Ever

With its growing role in global commerce, China’s employment law in 2025 remains central to business risk and continuity. Employers are facing increasing scrutiny from regulatory authorities regarding contract issuance, insurance payments, and dismissal procedures. Non-compliance can result in litigation, fines, and reputational harm.

Unlike some jurisdictions that allow greater flexibility in employment relationships, China’s employment law regime is both formal and enforcement-driven. Contracts must be documented in writing, social insurance payments are mandatory, and even minor procedural errors, such as delayed termination notices, can expose employers to costly legal disputes.

For multinational companies, startups, and HR professionals seeking to expand in or hire from China, a thorough understanding of employment law in China is essential. Not only does it minimise compliance risks, but it also enhances employee trust, operational continuity, and long-term sustainability.

Did You Know?

 Employers in China must sign a written employment contract within one month of the employee’s start date. Failure to do so can result in double salary penalties.

How are Labour Regulations Structured and Enforced in China?

China’s labour system is underpinned by a comprehensive legal structure, combining national legislation, administrative regulations, judicial interpretations, and local-level implementation.

Employers operating in China must navigate a complex and multifaceted legal environment to remain compliant and avoid costly disputes

China’s Labour Law Hierarchy

            NATIONAL LEGISLATION                

 Labour Law (1994) and Labour Contract Law (2008) 

↓

  JUDICIAL INTERPRETATIONS 

Supreme People’s Court Guidance

↓

  ADMINISTRATIVE REGULATIONS

    Ministry of Human Resources (MOHRSS) 

↓

                      LOCAL REGULATIONS                   

     Provincial/Municipal Labour Bureaux

1. Labour Law of the People’s Republic of China (1994)

This foundational statute establishes the fundamental rights and obligations of employers and employees, including working hours, rest and leave, remuneration, occupational safety, and social security. It serves as the overarching framework for employment relationships.

2. Labour Contract Law (2008)

More detailed and prescriptive, the Labour Contract Law focuses on individual employment contracts. It mandates the use of written agreements, sets rules for probation, renewal, and termination, and outlines severance pay obligations. 

3. Judicial Interpretations by the Supreme People’s Court

In practice, the application of labour laws often hinges on judicial interpretations issued by the Supreme People’s Court. These interpretations guide grey areas, such as dispute resolution, unfair dismissal, or contract loopholes, and are binding on lower courts. For employers, they are crucial for anticipating how courts may enforce or interpret labour provisions.

4. Administrative Regulations and Departmental Rules

Ministries such as the Ministry of Human Resources and Social Security (MOHRSS) and local Human Resources and Social Security Bureaux issue detailed regulations to facilitate implementation. These cover areas such as wage standards, arbitration procedures, insurance contributions, and employment permits for foreign nationals.

5. Local Regulations and Practices

While national laws set the baseline, China’s provincial and municipal governments may introduce their own employment rules, particularly regarding Minimum wage standards, Social insurance contribution rates, Work hour flexibility (e.g., comprehensive or irregular systems)

These local rules must be carefully reviewed, especially by companies operating across multiple provinces, as regional variations can be significant.

Understanding Employment Contracts under Chinese Labour Law

Written employment contracts in China are legally mandatory and form the foundation of every employment relationship.
These are the types of contracts permitted under law:

  • Fixed-term contracts – Most common, with defined start and end dates.
  • Open-ended contracts – No expiry; required after two consecutive fixed-term renewals or 10 years of service.
  • Project-based contracts – Valid until completion of a specified project.

Mandatory Clauses:

All employment contracts in China must include key details such as job responsibilities, working hours and location, salary and benefits, probation period (if any), social insurance contributions, and termination conditions.

Probation Period Limits: 

Legally allowed but strictly regulated. Depending on contract length, probation can range from 1 to 6 months, and employees must receive at least 80% of their agreed wage during this period.

Non-Compliance Risks: 

Failing to issue a compliant contract may lead to double wage penalties, automatic conversion to open-ended contracts, administrative fines, and limited legal recourse in disputes.

Quick Fact: In China, contracts should always be bilingual (Chinese + English), signed by both parties, and reviewed by local legal counsel to avoid disputes and ensure enforceability.

Understanding how to structure compliant contracts in China is essential; equally important is aligning these with your global policies. Refer to our international contracting guide for a broader perspective

Working Conditions in China: Hours, Leave, and Social Insurance PEZA Investment Framework?

In China, employers are required to comply with statutory standards regarding working hours, leave entitlements, and social insurance contributions. 

  • The standard work schedule is limited to 8 hours per day and 44 hours per week, with overtime permitted only under approved conditions and requiring additional compensation. Employers in specific industries, such as R&D or senior management, may apply for flexible or comprehensive working hour schemes with government approval.

  • Leave entitlements include 5–15 days of paid annual leave (based on years of service), maternity leave of at least 98 days, paternity leave ranging from 7 to 30 days, and sick leave supported by a medical certificate. Marriage and bereavement leave vary by province, so regional policies must be closely monitored.

  • Additionally, employers are required to contribute to five social insurance schemes: pension (~20%), medical (~10%), unemployment (~1%), work-related injury (0.5%–2%), and maternity (~1%), as well as a housing fund contribution between 5% and 12%, depending on location. These contributions are crucial to ensuring employee welfare and maintaining full legal compliance.

Minimum Wage in China : National Mandate, Local Control

Unlike some countries with a unified minimum wage system, China adopts a decentralised approach, granting each province and municipality the authority to set and adjust its minimum wage based on local economic conditions, living costs, and labour market dynamics. This means that the minimum wage in China can vary significantly depending on the location of a business.

As of 2025, here are examples of current monthly minimum wage standards in key regions:

LocationMonthly Minimum Wage (Approx.)
BeijingCNY 2,420
ShanghaiCNY 2,690
SichuanCNY 1,820

Wages are reviewed annually, and many regions also publish hourly rates. Businesses must stay updated, as non-compliance can lead to back payments, fines, or even licence suspension.

Also Check Out: Minimum Wage Trends in 2025 : A Comprehensive Global Overview.

 

What are the Opportunities and Restrictions in Hiring Foreign Workers in China?

Engaging foreign job professionals can offer Chinese employers access to global expertise and specialised skills. However, China maintains a tightly regulated framework for foreign employment, and employers are fully accountable for compliance throughout the process. Any breach may result in serious legal and financial consequences, including fines and bans on future hiring.

How to Legally Employ Foreign Nationals?

1. Employer Qualification Certificate Certifies that the company is authorised to hire foreign nationals.
2. Apply for a Z Visa A work visa issued by a Chinese embassy or consulate before arrival.
3. Register for a Work Permit Issued by local HR authorities, linked to a specific position and employer.
4. Sign a Written Employment Contract Must comply with Chinese labour laws and include mandatory clauses.
5. Tax and Social Insurance Enrolment Required for legal employment and access to local social security systems.

What are the Eligibility Criteria for Foreign Workers?

To qualify for legal employment in China, foreign candidates must typically meet the following minimum requirements:

  • Bachelor’s degree or higher qualification
  • At least two years of relevant professional experience
  • No criminal record
  • Good health (medical check-up required in most cities)

Ending Employment the Right Way through Termination Rules

In China, employee termination is governed by strict statutory protections, and employers must follow formal legal procedures to avoid liability. Unilateral termination is heavily restricted and only permitted under specific conditions outlined in the Labour Contract Law. Failure to comply can result in reinstatement orders, compensation claims, or administrative penalties.

  • Permissible Grounds for Termination: Mutual Agreement, Employee Misconduct, Redundancy, Incapacity

  • Notice and Severance Requirements: Employers must provide 30 days’ written notice or pay one month’s salary in lieu. Severance pay is calculated as one month’s salary for each full year of service. Periods of six months or longer are considered a whole year; those under six months earn half a month’s salary.

  • Termination Prohibitions: Employers cannot terminate employees during pregnancy or maternity leave, while they are receiving certified medical treatment, or without prior arbitration in cases of contested dismissal or contract disputes.

Case Study:

In 2023, a European tech firm operating in Shenzhen was fined over CNY 500,000 for unlawfully dismissing an employee while they were on medical leave. The court ruled that the termination violated China’s Labour Contract Law, ordering full compensation and reinstatement, highlighting the risks of non-compliance for foreign employers.

Top Foreign Employer Risks and How to Avoid Them

For foreign employers operating in China, even well-intentioned HR practices can lead to regulatory breaches if local laws are misunderstood or misapplied. Several common compliance pitfalls can expose companies to fines, legal disputes, and reputational damage. Some common employer risks include

  • Misclassification of Employees: Incorrectly categorising workers as contractors to avoid benefits or obligations is a violation. 
  • Oral or Incomplete Contracts: Failure to issue timely, written agreements can result in double wage penalties and forced open-ended contracts. 
  • Gaps in Social Insurance Contributions: Inconsistent or regionally non-compliant contributions may trigger audits and back payments. 
  • Improper Termination Procedures: Dismissing staff without valid cause, required documentation, or due process often results in arbitration losses.

 

How to avoid these risks?

Employer Do’sEmployer Don’ts
Issue written, bilingual employment contracts within 30 days of hiring.Don’t rely on verbal agreements—they’re non-compliant and penalised.
Stay updated with local wage, leave, and insurance rules.Don’t assume national rules apply uniformly across all provinces.
Contribute accurately and consistently to social insurance and housing funds.Don’t underreport salaries or skip contributions—this triggers audits.
Provide proper termination notice and severance.Don’t terminate without valid legal grounds or required documentation.
Seek local HR/legal guidance for hiring foreign employees.Don’t bypass visa or permit procedures—this can lead to bans or fines.

 

Conclusion

In a regulatory landscape shaped by employment law in China, employers must combine legal compliance with strategic HR planning. Employers must go beyond basic legal awareness to foster a truly compliant, ethical, and culturally attuned workforce. From managing employment contracts and wage standards to navigating foreign hiring and termination protocols, staying aligned with both national laws and local nuances is essential for long-term success.

At Galaxy Group, we support global businesses in navigating regulatory complexity and driving strategic workforce growth across China and the broader APAC region. Whether you’re entering the market, leveraging an EOR (Employer of record) solution for faster entry, or refining your existing HR framework, our team offers expert-led audits, localised insights, and proactive compliance planning to help you build confidently for the future.

Simplify Global Hiring with Our EOR Services

Galaxy Group helps you legally hire talent in China and across Asia—without setting up a local entity.

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FAQ’S

How does China regulate employment contracts?

Employment contracts in China must be written and issued within 30 days of the date of hire. They must include job details, salary, working hours, and social insurance. Verbal agreements are invalid and penalised.

Termination in China is strictly regulated and allowed only under lawful grounds, such as misconduct or redundancy. A 30-day notice or payment in lieu is mandatory, along with severance and arbitration in cases of dispute.

Under employment law in China, failure to provide a written contract within 30 days of hiring obliges the employer to pay double wages starting from the second month. After 12 months, the employee is entitled to an open-ended contract by default.

No. Foreigners must secure a Z visa, followed by a work permit from the local HR authority, before starting employment. Engaging in foreign jobs in China without the correct documentation is illegal and can lead to fines, deportation, and employer blacklisting.

Yes, in most cities. Foreign employees working under legal contracts are required to participate in pension, medical, and unemployment insurance, though implementation varies by location. Employers must verify local compliance requirements for social insurance enrolment.

No, China does not recognise at-will employment. Dismissal must be based on legal grounds, such as employee misconduct or redundancy, and follow prescribed procedures.

Under China’s labour law, control over work hours, location, and tools typically classifies a worker as an employee, not a contractor. Misclassification to avoid taxes and benefits is a common compliance risk that can lead to back payments, penalties, and legal disputes.

PEZA incentives and tax rules for foreign investors in the Philippines: Worth the trouble?

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PEZA incentives and tax rules for foreign investors in the Philippines: Worth the trouble?

Two businessmen discuss PEZA tax incentives in a formal office with the Philippine flag in the background.

As the Philippines strengthens its position as a strategic investment destination in Southeast Asia, it continues to refine its fiscal policies to attract foreign direct investment (FDI). At the heart of these reforms lie the Philippine Economic Zone Authority (PEZA), the Corporate Recovery and Tax Incentives for Enterprises (CREATE Law), and its successor, the CREATE MORE Act. These initiatives provide a compelling suite of tax incentives, regulatory reliefs, and ease-of-entry mechanisms for foreign companies looking to establish or expand their presence in the country.

Yet, a fundamental question remains: Are these incentives truly worth the procedural and compliance burden? 

This blog demystifies the PEZA investment framework in the Philippines and explains how foreign investors can benefit from the new tax rules introduced under CREATE and CREATE MORE.

Table Of Content

What is PEZA and Why does it Matter for Foreign Investors in The Philippines?

The Philippine Economic Zone Authority (PEZA) was established in 1995 to oversee the development and management of special economic zones (SEZs) across the country. These zones aim to promote industrial growth, technology transfer, employment generation, and foreign investment.

The CREATE Act (Corporate Recovery and Tax Incentives for Enterprises)—Republic Act No. 11534—was enacted in 2021 to rationalise fiscal incentives, reduce corporate income tax, and modernise the incentives system. 

In 2024, the CREATE MORE Act (Republic Act No. 12066) was introduced to refine further and enhance these measures based on stakeholder feedback.

For foreign investors, PEZA represents a gateway to lower tax burdens, predictable policies, and preferential treatment within secure, government-supported zones, making it one of the most strategic routes to enter and scale operations in the Philippines.

Who is Eligible to Register with PEZA?

Foreign investors can apply for PEZA registration provided they meet certain qualifying conditions. The primary eligibility criteria include:

  • Export Orientation: Enterprises must export at least 70% of their total production or services.

  • Location: Business activities must be situated within PEZA-accredited zones, which include IT parks, manufacturing hubs, agro-industrial centres, and tourism zones.

  • Sector Alignment: Key sectors include manufacturing, IT, and Business Process Management (IT-BPM), renewable energy, agribusiness, logistics, and biotechnology.

Businesses must also comply with operational requirements, such as obtaining environmental permits, securing zoning clearances, and obtaining land-use approvals.

How can your Business Benefit from PEZA Registration?

PEZA-registered enterprises enjoy a range of fiscal and non-fiscal incentives. These include:

  • Income Tax Holiday (ITH)

  • Available for 4 to 7 years, extendable to 8+ years for priority sectors under CREATE MORE.

  • Strategic projects, such as AI, medical devices, and sustainable manufacturing, may benefit from extended ITH.

  • Special Corporate Income Tax (SCIT)

  • After the ITH period, enterprises can opt for a 5% tax on gross income instead of all national and local taxes.

  • This simplifies tax reporting and reduces fiscal uncertainty.

  • Enhanced Deductions (ED)

  • Alternatively, enterprises may choose a 20% Corporate Income Tax with substantial deductions (e.g., 100% for power, training, and R&D costs).

  • CREATE MORE clarifies and expands eligible deductions.

  • VAT and Duty Incentives

  • VAT zero-rating on the purchase of goods and services directly related to operations.

  • Duty-free importation of capital equipment, raw materials, and administrative supplies.

  • CREATE MORE extends duty-free privilege to directly attributable support activities (e.g., HR systems, air conditioning units, etc.).

  • Local Tax Exemptions

  • Enterprises are exempt from business permits, local business taxes, and other fees.

Under CREATE MORE, Registered Business Enterprises under the Local Tax (RBELT) regime caps local business taxes at 2% of gross income.

How does CREATE MORE Improve the PEZA Investment Framework?

Signed in November 2024, the CREATE MORE Act(Corporate Recovery and Tax Incentives for Enterprises) (RA 12066) builds upon the original CREATE framework with significant updates, such as:

  • Longer Tax Holidays for high-impact and decentralised industries.

  • Clarity in implementing rules makes it easier for foreign investors to plan operations.

  • Expanded scope of VAT zero-rating and duty-free benefits.

  • 50% Remote Work Allowance for IT-BPM Firms, addressing post-pandemic realities.

  • Simplified compliance mechanisms, such as streamlined document submissions and electronic filing.

  • Customs bonding privilege for imports prior to the issuance of the PEZA Certificate of Registration.

  • RBELT(Registered Business Enterprises under the Local Tax)Provision to protect enterprises from unpredictable local taxation.

These improvements directly respond to prior investor complaints about ambiguity and implementation gaps in the CREATE Law.

For expert assistance in navigating Philippine tax reforms like the CREATE MORE Act:
explore our Accounting, Finance, and Taxation services.

What is the Step-by-Step Process for PEZA Compliance in The Philippines?

To secure PEZA incentives, the registration process involves several steps:

A. Pre-application

  • Finalise the business plan, identify the PEZA zone, and conduct a feasibility analysis.

  • Engage legal and consulting advisors to ensure compliance with zone-specific regulations.

B. Application Submission

  • Apply with the required documents:
    • Project proposal
    • Environmental Compliance Certificate (ECC)
    • Zoning clearances
    • Audited financials or capital verification

  • PEZA typically reviews and approves applications within 30 to 60 business days.

C. Post-Approval Compliance

  • Obtain PEZA Certificate of Registration.

  • Sign a lease agreement with the zone operator.

  • Register with BIR, SEC, and LGU (as applicable).

Transition Rules for Existing PEZA Enterprises

CREATE MORE ensures a smooth transition for legacy PEZA enterprises:

  • Entities registered before the effectivity of CREATE may continue under existing incentives until the end of their ITH or SCIT periods, or until June 30, 2031, whichever comes first.

  • After expiration, companies can shift to enhanced deductions or SCIT schemes.

  • Relocation from NCR to other regions may qualify the enterprise for an additional 3-year ITH, promoting decentralisation.

This balanced approach ensures minimal disruption for existing investors while incentivising regional growth.

What are the Long-Term Benefits of Investing in PEZA Zones?

For foreign investors, PEZA incentives represent more than just tax relief—they serve as a gateway to regional integration and operational efficiency.

  • Tax Predictability: SCIT and RBELT protect against shifting local and national tax regimes.

  • Cost Reduction: Duty-free imports, VAT exemptions, and power deductions reduce operational expenditure.

  • Global Market Access: Export-oriented businesses benefit from bilateral trade agreements via the Philippines.

  • Workforce Flexibility: PEZA allows greater flexibility in employment structures, including hybrid work models.

Case Study: Upgrade Energy Philippines Inc. (UGEP) – A Solar-Powered PEZA Success

In September 2022, Upgrade Energy Philippines Inc. (UGEP) partnered with the Philippine Economic Zone Authority (PEZA) to develop solar installations in Cavite and Baguio Economic Zones. Operating under the Renewable Energy Act and the CREATE Law, UGEP gained access to a suite of fiscal incentives by registering as a PEZA locator.

The company’s project aimed to supply clean, solar energy directly to PEZA-registered tenants, helping reduce carbon emissions while offering competitive electricity rates.

Key incentives secured include:

  • 7-year income tax holiday (ITH)
  • Duty-free importation of solar equipment
  • VAT zero-rating on local purchases
  • Authorisation to sell power directly within PEZA zones

With an estimated annual revenue of ₱400 million, UGEP saves approximately ₱25 million per year through reduced corporate taxes, VAT exemptions, and waived import duties.

This case demonstrates the financial and operational value of aligning renewable projects with national investment priorities. UGEP’s success underscores how PEZA incentives and CREATE policies can support sustainability while enhancing profitability, making the Philippines an attractive destination for clean energy investments.

What are the Challenges of PEZA Registration?

While the PEZA framework is rewarding, it comes with its complexities:

  • Maintaining a 70% export quota may be difficult for firms with significant domestic demand.

  • Non-compliance with zone regulations may result in the suspension or revocation of incentives.

  • Administrative burden: Environmental and zoning permits can cause delays in approvals.

  • Policy shifts: Although CREATE MORE introduced clarity, sudden shifts in tax policy still pose a risk.

To mitigate these, businesses should work closely with experienced legal and tax advisors.

Conclusion

For qualified and strategically positioned investors, PEZA incentives under CREATE and CREATE MORE can be truly game-changing.

These incentives offer fiscal relief, streamline processes, and foster long-term growth. However, the complexity of application, monitoring, and compliance requires careful planning. With expert support and a proactive approach, foreign investors can unlock significant value from these incentives. 

Galaxy Group is committed to guiding you through this journey, from identifying opportunities to achieving successful market entry. Our team provides end-to-end advisory services, from zone selection to PEZA registration, tax strategy, and compliance support.

For a seamless market entry, pairing PEZA registration with compliant hiring is essential.
Learn how global companies can legally hire talent in the Philippines.

Maximise your tax savings with PEZA incentives.

Get end-to-end support from Galaxy Group—your trusted APAC advisory partner.

Book your consultation

FAQ’S

Can PEZA-registered companies sell directly to other locators?

Yes. Companies like UGEP are allowed to directly supply energy to PEZA locators within the same economic zone, enabling efficient distribution and cost-effective pricing.

While the process involves multiple steps—such as feasibility studies, environmental permits, and zone-specific approvals—engaging experienced consultants like Galaxy Group can significantly streamline the process.

The CREATE Law Philippines aims to attract more investments by lowering corporate income tax rates and modernising the tax incentive system. It introduces more explicit rules, transparency, and performance-based incentives to replace the outdated and fragmented system.

Foreign investors under CREATE are eligible for a 4–7 year Income Tax Holiday (ITH), followed by either a 5% Special Corporate Income Tax (SCIT) or Enhanced Deductions under a 20% corporate tax rate. Additional incentives include VAT zero-rating and duty-free importation.

Yes—due to non-compliance, underperformance, or material breach of registration terms. However, PEZA provides formal notices, time-bound corrective periods, and appeal opportunities before withdrawing incentives.

Not automatically. Any significant change in business structure (e.g., merger, acquisition, spin-off) must be approved by PEZA. In many cases, the new entity must reapply or seek a formal transfer of incentives, unless specific continuity clauses are honoured.

Tap Macau’s Workforce Without the Complexity: EOR Made Simple

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Tap Macau’s Workforce Without the Complexity: EOR Made Simple

EOR benefits and hiring process in Macau

Hiring international talent in Macau offers immense potential, especially for companies looking to expand into Greater China without the regulatory complexities of Mainland China. As a Special Administrative Region (SAR), Macau operates under its own legal and labor framework, making it both a strategic and accessible location for businesses. With a 99.87% literacy rate and a multilingual population, the region offers a skilled and adaptable remote workforce in Macau, particularly across industries like gaming, hospitality, construction, and retail (Source: GlobalData). However, navigating local labor laws, work permits, and compliance obligations can be time-consuming—especially for companies without a physical presence.

That’s where an Employer of Record (EOR) in Macau becomes a game-changer. Instead of undergoing full business incorporation in Macau, companies can use an EOR to legally hire and manage talent, while staying fully compliant with local laws. From handling payroll in Macau to tax contributions and employment contracts, the EOR model streamlines the entire process. If you’re building a remote workforce, testing new markets, or scaling quickly, EOR solutions offer an efficient alternative to traditional recruitment services in Macau, giving you speed, flexibility, and peace of mind.

EOR benefits and hiring process in Macau

Hiring in Macau doesn’t have to be complicated.

 With the right EOR partner, you get boots on the ground—without getting buried in bureaucracy.

Go global, Stay agile