Occupancy is hardly a challenge for well-located office towers these days. Proof of this is the consistently low vacancy rate registered in Metro Manila, particularly in the central business district of Makati at 1.8% as of the second quarter of 2015. Developers continue to add to the inventory as projections of an industry-growth remain high.
But with the quantity or a range of options growing in ideal locations, values that greatly benefit the locator are fast becoming in demand. And for many of them, a Philippine Economic Zone Authority (PEZA) accreditation just might offer the clincher.
Businesses located in a PEZA-accredited building are entitled to a wide range of perks and advantages beneficial to the company and consequently, to its employees. Developer Century Properties has taken advantage of this by having its latest office development, Century Spire, PEZA-accredited.
Century Spire Offices benefits from PEZA-accreditation
The office tower has a prime location—Century City in Modern Makati, the growing residential and commercial district north of the CBD—and groundbreaking architecture—by globally-acclaimed architect Daniel Libeskind—to boast of. It also has amenities that range from a retail section, a food hall, a fine dining restaurant, an auditorium with pre-function room, and a grand office lobby designed by Armani/Casa.
Not content with the building’s clear advantages, Century Properties has opted to add to them with an accreditation that many investors are finding attractive.
“The challenge we gave ourselves this time is to make an already Grade A building even more attractive,” Marco Antonio, Century Properties Chief Operating Officer said.
The PEZA’s aim is to bolster the flow of foreign investments in the Philippines by rewarding them with fiscal and non-fiscal incentives.
Chief of these is an income tax holiday. For a certain number of years, businesses in a PEZA-accredited zone enjoy tax holidays allowing companies to save up on tax fees and operational costs.
The exemption from corporate income tax is at 100% for 4 years for non-pioneer projects, 6 years for pioneer projects, and 3 years for expansion project (the income tax holiday applies to incremental sales).
An extension year may be granted if the project complies with the following criteria (one criterion is equivalent to one ITH extension year,) provided that the total Income Tax Holiday entitlement period shall not exceed eight (8) years: a.) The average net foreign exchange earnings of the project for the first three (3) years of operations is at least US$500,000.00 and, b.) The capital equipment to labor ratio of the project does not exceed US$10,000.00 to 1 for the year immediately preceding the income tax holiday extension year being applied for.
Meanwhile, importations of equipment, capital equipment and parts, machineries, etc. are also tax and duty free in PEZA-accredited companies in a Special Economic Zone.
Other privileges include VAT zero-rating of local purchases of goods and services such as land-based telecommunications, electrical power, water bills, and lease on the building, subject to compliance with Bureau of Internal Revenues and PEZA requirements; exemption from payment of any and all local government imposts, fees, licenses or taxes.; and exemption from expanded withholding tax.
Upon the expiry of the Income Tax Holiday, a 5% Special Tax on Gross Income and exemption from all national and local taxes shall be applicable.
“The reduction of levies imposed on businesses can result in anything from a reallocation of funds to equipment or services upgrade or even additional employee incentive programs,” Antonio said.
PEZA-accredited foreign entities in a PEZA-accredited location are also entitled to exemptions through PEZA’s non-fiscal incentives.
Among the incentives are the simplified import-export procedures, special non-immigrant visa with multiple entry privileges, assistance of extended visa facilitation for foreign nationals and their families, and employment for foreign nationals in a PEZA-registered company.
To a foreign investor, obtaining PEZA accreditation and locating in a PEZA-accredited zone means a cut in the bureaucracy normally involved in establishing business and contributes to immediate and smoother operations.
“Tax breaks plus a range of world class features and you have the ideal business location,” Antonio concluded.
Grade AA Spaces
Century Spire will be one of Makati’s office towers with Grade AA features. With groundbreaking architecture by Daniel Libeskind, the architect known for his cutting edge aesthetics and whose body of work spans the globe including The Jewish Berlin Museum, Reflections at Keppel Bay in Singapore, the Run Run Shaw Creative Media Centre in Hong Kong and New York’s Ground Zero. Its first rate amenities include an auditorium and function room, a dining hall, a fine dining restaurant, and a two-level retail space to be of global quality. The highlight of these amenities is its own grand lobby designed by Armani/Casa, the interior design studio of celebrated fashion mogul Giorgio Armani, which also designed the common areas and amenities of the residences in Century Spire. Adding quality service and prestige to each enterprise within the building is its concierge services that will not only facilitate business but also leisure.
Century Spire is also adhering to sustainability standards targeting a LEED Certification focusing on energy efficiency.