Expanding and Doing Business in Cebu – 2025 Guide

Are you an entrepreneur looking to expand your business into new and promising markets? Cebu is a thriving hub in the Philippines, offering a unique blend of economic opportunity, strategic location, and vibrant culture. This guide will walk you through why Cebu is an attractive destination for business, the best industries to venture into, and the steps to register your business.

• Why Expand and Do Business in Cebu?
• What are the best industries to venture into Cebu?
• What are the Steps in Registering Your Business in Cebu?
• What are the Tax Incentives Options Available in Cebu?
• Frequently Asked Questions

Investing In Cebu

Cebu stands out as a prominent urban center in Central Visayas, renowned for its rapid infrastructure advancements. This dynamic locale provides an exceptional opportunity for investment and serves as an ideal foundation for business expansion. Let’s delve into the compelling reasons why Cebu is the ideal destination for your next business venture.

1. Thriving Economic Growth

NEDA Reported that Central Visayas topped the country’s economic growth in 2023 with a 7.3% increase in GRDP, valued at PHP1.38 trillion. The Services sector grew by 8.3%, Agriculture, Forestry, and Fishing by 8.0%, and Industry by 4.1%.

2. Strategic Location

Cebu’s strategic central location in the Philippines serves as a crucial gateway to both domestic and international markets, significantly contributing to its economic growth. Its busy port, among the most active in the region, along with a strong infrastructure network, ensures efficient connectivity and facilitates the smooth flow of goods and services.

3. Skilled Workforce

Cebu is enriched by a multitude of universities and technical schools, which consistently produce a steady influx of qualified graduates ready to enter the workforce. This educational ecosystem nurtures a diverse range of expertise across various fields, from engineering and information technology to healthcare and business.

Best Industries to Venture Into Cebu

Cebu’s robust economic expansion continues to attract investors eager to establish or grow their businesses in this thriving city. Here are some of the most promising business ventures you can explore in Cebu, offering exciting opportunities to tap into its dynamic market.

1. Information Technology (IT) and Business Process Outsourcing (BPO)

The first on the list is IT and BPO. It was recorded in 2022 that the IT-BPM industry generated $32.5 billion in revenue and employed over 121,000 professionals. This rapid growth makes it an ideal opportunity for investors eager to engage with Cebu’s dynamic market.

2. Real Estate

Cebu’s strategic location has attracted both investors and individuals looking for residential properties. Reports indicate that in the first half of 2022, the number of people purchasing residential areas increased by 67 percent, signaling a strong market.

3. Tourism and Hospitality

Cebu’s tourism and hospitality sector offers a prime opportunity for investors. With a consistent flow of tourists throughout the year, NEDA’s report shows a 10.99% increase in visitor arrivals in the first quarter of 2024. Investing in hotels, resorts, and travel services promise substantial returns. The growing demand for high-quality accommodations and immersive travel experiences makes this sector particularly lucrative for development.

Steps in Registering Your Business in Cebu

Cebu’s strategic location, booming tourism, and thriving industries create an ideal setting for business growth and success. Grasping the process of business registration in Cebu is an essential first step to accessing this vibrant market. Below are the steps in registering your entity in Cebu.

Step 1: Choose Your Business Structure

Select the appropriate business structure for your venture. Common options include sole proprietorship, partnership, and corporation.

Step 2: Register Your Business Name

• Department of Trade and Industry (DTI) for sole proprietorships.
• Securities and Exchange Commission (SEC) for partnerships and corporations.

Step 3: Obtain Necessary Permits and Licenses

• Barangay Clearance from the local barangay where your business will operate.
• Mayor’s Permit/Business Permit from the Cebu City Hall.

Step 4: Register with the Bureau of Internal Revenue (BIR)

Secure a Tax Identification Number (TIN) and register your business for taxation purposes.

Step 5: Register with Social Security System (SSS), PhilHealth, and Pag-IBIG Fund

For businesses with employees, ensure you are compliant with social service contributions.

Tax Incentives Options Available in Cebu

Entrepreneurs looking to establish a business in Cebu can take advantage of various tax incentives tailored to the type of entity they plan to start. Below are the tax incentives available:

Philippine Economic Zone Authority (PEZA)

PEZA offers significant incentives to foreign businesses in the manufacturing and tourism sectors if they operate within its economic zones. Key benefits include a three to six-year income tax holiday, a 5% gross income tax rate post-holiday, and exemptions from national and local taxes. Additional perks include duty-free importation of equipment, tax credits for using local materials, and labor cost reductions, making PEZA an appealing choice for investors seeking tax advantages and growth potential.

Board of Investments (BOI)

The Board of Investments (BOI) provides key incentives for fully foreign-owned entities involved in export-oriented activities or those in BOI’s investment priorities. Benefits include a three to six-year income tax holiday, duty exemptions on imported capital equipment, and tax credits on raw materials. Companies can also benefit from exemptions on wharfage dues and export taxes, along with labor expense deductions and the option to employ foreign nationals in supervisory roles. These offerings make BOI an appealing option for investors looking for growth and tax advantages.

Tourism Infrastructure and Enterprise Zone Authority (TIEZA)

The Tourism Infrastructure and Enterprise Zone Authority (TIEZA) provides incentives for tourism-related businesses, such as travel agencies and theme parks, within Tourism Enterprise Zones (TEZ). Eligible businesses must focus on attracting tourists to the Philippines. Key benefits include significant tax deductions for environmental and cultural efforts, protection from property requisition during emergencies, and the ability to repatriate investments in their original currency. Access to work visas and Special Investor’s Resident Visas further enhances TIEZA’s appeal to foreign investors.