Export Market Enterprise (EME) in the Philippines: A Guide for Foreign Investors

As of 2026, the Philippines has solidified its position as a regional hub for export-oriented foreign direct investment (FDI). According to the World Bank’s 2026 Global Economic Prospects, the Philippines is among the world’s fastest-growing emerging market economies. Since 2011 (excluding the pandemic), the country’s economy has been growing 6% annually. It is 1% more in comparison to the 5% average of the ASEAN-4 (Indonesia, Malaysia, Thailand, and Vietnam).

To capitalize on the Philippine’s FDI momentum, many foreigners establish an Export Market Enterprise (EME). It’s a type of business where foreigners can access 100% foreign equity, aggressive tax incentives, and streamlined customs procedures. Bolstered by the CREATE MORE Act (Republic Act 12066) and PEZA initiatives, you can now establish your own export-oriented business in the country. 

In this article, we will talk about what is an EME in the Philippines. We will cover what are incentives for foreign investors, and how you can get your business started. 

Understanding What is an EME in the Philippines

At its core, an Export Market Enterprise is a business that primarily sells its products or services to customers outside the Philippines. Under Section 3(e) of the Foreign Investment Act of 1991 (RA 7042), an “export enterprise” is defined as:

“An enterprise wherein a manufacturer, processor or service (including tourism) enterprise exports sixty percent (60%) or more of its output, or wherein a trader purchases products domestically and exports sixty percent (60%) or more of such purchases.” 

This definition distinguishes EMEs from Domestic Market Enterprises, which export less than 60% and face stricter foreign ownership limits.

Who Can Start an EME in the Philippines?

The Philippine government evaluates EME applications based on their potential to generate foreign exchange and integrate with global value chains. Beyond the technical sales ratio, IPAs scrutinize the project’s sustainability and its alignment with the country’s modernization goals. 

Approval is generally performance-linked, meaning the eligibility status is maintained only through consistent adherence to the submitted project study and export targets. 

• Export Commitment: The primary criterion is the intent to export a minimum of 70% of total annual production or services (for IPA registration) or at least 60% (for SEC-only registration).
• Qualifying Activities: The business must fall under the Strategic Investment Priority Plan (SIPP). While most export activities qualify, those introducing new technologies or locating in underdeveloped provinces are prioritized for longer incentive periods.
• Legal Entity Type: The business must be incorporated as a domestic corporation (including a One Person Corporation) or registered as a Branch Office. 

Note that Representative Offices are not eligible as they are non-income generating.

What are Requirements to Start an EME

These documents are used by the government to verify that your investment is “genuine” and that your operations will yield the promised economic benefits. Missing or incomplete documentation is the most common cause for registration delays, making precision in the early stages critical for a timely launch.

Here’s what you need to register an EME:

1. Project Study: A comprehensive business plan detailing the nature of the project, a 5-year financial projection (including projected export sales and local purchases), and a breakdown of the production process or service delivery model.
2. Proof of Market: To validate the export commitment, IPAs often require copies of export sales contracts, purchase orders, or Memorandums of Agreement (MOA) with foreign clients.
3. Capitalization Proof: For corporations, a Bank Certificate of Deposit showing the paid-up capital. For Branch Offices, proof of inward remittance of the assigned capital.
4. Board Resolution: A formal document from the parent company (if applicable) authorizing the establishment of the Philippine entity and appointing the authorized representatives.
5. Environmental Compliance: For manufacturing projects, an Environmental Compliance Certificate (ECC) or a Certificate of Non-Coverage (CNC) from the Department of Environment and Natural Resources (DENR) is mandatory before operations commence.

During the initial phases of incorporating a company with Emerhub, we will conduct an assessment to determine if you qualify as an EME in the Philippines. 

Fiscal Incentive Options for EMEs

Under the CREATE MORE Act, the Philippine government offers a wide array of fiscal  incentives for foreign-owned EMEs. You can enjoy a multi-stage tax incentive program that starts with an immediate tax break and transitions into a long-term preferential rate. 

Income Tax Holiday (ITH)

For the first 4 to 7 years of your operations, you pay 0% Corporate Income Tax. The duration depends your industry’s priority level defined by the Strategic Investment Priority Plan (SIPP): 

Tier	Industry Examples	ITH Duration	SCIT/EDR Duration
Tier I	Essential manufacturing, food processing, basic BPO.	4-6 Years	10 Years
Tier II	Electric vehicles, green energy, industrial value chain gaps.	5-7 Years	10 Years
Tier III	AI, Robotics, Genomics, Semiconductors, Aerospace R&D.	6-7 Years	Up to 20 Years

Note: Projects located in “Less Developed Areas” or those relocating from the National Capital Region (NCR) can receive additional years of ITH.

Post-ITH Tax Tracks: SCIT vs. EDR

Once your initial Income Tax Holiday (ITH) expires, your EME must transition into one of two fiscal regimes. This choice is typically made at the point of registration.

Indirect Tax Exemptions (Entire Registration Period)

Other tax incentives for EMEs in the Philippines include Duty-free Importation and Zero-rated VAT. These indirect tax exemptions are critical for maintaining healthy cash flows, since it eliminates the need to pay 12% VAT upfront and wait for lengthy refund cycles. 

Here are other indirect tax incentives for EMEs:

• Duty-Free Importation: 0% customs duties on the importation of capital equipment, raw materials, spare parts, and accessories.
• VAT Zero-Rating: 0% VAT on local purchases of goods and services. Under CREATE MORE, this now explicitly covers services like security, janitorial, utilities, and administrative overhead, provided they are “directly attributable” to the export project.

By operating within this “tax-free bubble” for all essential inputs, you can reinvest your working capital more efficiently into operational scaling and technological upgrades.

Non-Fiscal Incentives for EMEs

In addition to tax relief, the government provides non-fiscal incentives to facilitate the creation and execution of an EME’s operational structure. These measures are designed to lower non-tax barriers and address the administrative complexities of managing a cross-border business.

• Employment of Foreign Nationals: EMEs have a higher quota for foreign executives, technicians, and consultants, often for a period of up to 5 years from registration. This ensures that investors can bring in specialized expertise while their local workforce is being trained.
• Simplified Customs Procedures: PEZA-registered EMEs, in particular, benefit from an “automated export documentation system” and on-site customs officers. This allows faster clearing of goods and reduces port-side delays.
• Unrestricted Use of Consigned Equipment: EMEs can import and use equipment owned by their foreign clients without paying duties or taxes, provided it is used for the registered export activity. This is essential for contract manufacturing models.
• Long-Term Land Lease: While foreigners cannot own land, the Investors’ Lease Act allows EMEs to secure leases for up to 75 years (50 years initial plus a 25-year renewal). It provides the long-term stability required for significant infrastructure investment.

100% Foreign Ownership and Capitalization

One of the most significant advantages for starting an EME is its liberal foreign equity. While the Philippine Constitution and the Foreign Investment Negative List (FINL) restrict certain sectors (like land ownership or mass media), the export sector is largely “open.”

As a foreign investor, you can own 100% of the shares of your EME. Furthermore, the standard requirement for “Foreign-Owned Domestic Market Enterprises” to have a paid-in capital of at least USD 200,000 is waived for EMEs. 

This lower barrier to entry allows startups and specialized manufacturers to begin operations with a more flexible capital structure. This is provided you meet the specific project-cost requirements of your chosen IPA.

Starting an EME in the Philippines

Building an export company in the Philippines requires a deep understanding of local compliance and global business standards. At Emerhub, we can bridge that gap by providing a full-suite operational platform. Our local experts in the Philippines can help manage:

• Entity Structuring: Ensuring your company is optimized for 100% foreign ownership.
• Incentive Procurement: We handle the complex technical project studies required by PEZA and the BOI.
• Customs Brokerage: Navigating the CPRS and duty-free importation of your initial factory equipment.
• Corporate Secretary and Resident Agent Services: Providing the mandatory local officers needed to stay compliant with the SEC.
• Visa Options for Investors: Emerhub can help you process special Investor visas that bypass the delays for a standard Work 9(G) visa. 

Fill out the form below to get in touch with our team of local compliance experts in the Philippines. We can answer all your questions about EMEs with our free first-time consultation!