CEZA (Cagayan Economic Zone Authority) - The Cagayan Free Economic Zone, located in the northern part of the Philippines, was not heard of by anyone until recently. If not for one BUT. Thanks to regulatory changes in February 2018, the CEZA authorities first “opened the doors of the tax haven” for mining farms, and on June 27 of this year they decided to break the mold altogether by making a resonant statement about the possibility of issuing 25 exchange crypto licenses on their territory.
Let's start with a little excursion about this really interesting and truly free economic zone.
CEZA is a government-owned and controlled corporation created in accordance with Republic Act No. 7922. It is also known as Cagayan Freeport or Cagayan Cyber Park and is located in the northeast of the Philippines.
This zone has the authority to act both independently, that is, either directly or through subsidiaries, and under license through third parties. The priorities and standards set by CEZA include institutions related to tourism and entertainment, including games, entertainment and sporting events such as horse racing, dog racing, gambling casinos, online casinos, golf courses, online games and others. CEZA is a government arm of the Office of the President that operates and manages a 50,000-hectare economic zone in the province of Cagayan.
CEZA may offer tax or customs incentives to its clients, such as four to six years of tax holiday on income tax, VAT, duty-free import of capital equipment, a special tax rate of 5 percent of gross income in lieu of all local and national taxes, and tax credits for foreign corporations and an effective zero rate for certain categories of goods admitted into the zone from the customs territory under appropriate control.
As it turns out, CEZA initially became famous for its convenient and beneficial regulation of Internet games. To expedite the processing of gaming licenses, CEZA was given the exclusive right to independently approve applications without prior approval from a national government agency, including PAGCOR. In fact, 90% of local companies in Cagayan Cyber Park are in the gaming business. Customers of these companies can play the most popular virtual and online games virtually through a kind of proxy, without the need for a physical presence. CEZA issues Internet game licenses aimed at international players. This has become an attractive business model for online gaming operators in Asian markets and the international gaming community.. A number of local and foreign online gaming companies have registered with CEZA, including online casino sites, online betting sites and many others.
On June 27, 2018, on the official website of CESA, on behalf of its head - CEO Raul L. Lambino, released press release that CESA plans to issue 25 basic licenses for cryptocurrency exchanges. Each exchange, in turn, will have the opportunity to issue sublicenses for 20-30 of its traders or brokers.
Freedom under strict control
The Cagayan Economic Zone Authority (CEZA) seeks to initially limit the number of licenses that will be issued to cryptocurrency exchanges wishing to operate in a special economic zone.
Each of the exchanges will first have to invest $1 million in the Philippine economy within two years. In addition, offshore companies seeking to operate crypto exchanges in the Philippines will also be required to set up back offices in the country and undergo mandatory registration with the Securities and Exchange Commission. Once licenses are issued, CEZA will first monitor how exchanges operate and will then crack down on cases of fraud or other violations of the law.
According to the CEO of CEZA: “There are many transactional scammers who obtain small amounts of capital from investors, turning them into investment victims. We don't want the Philippines to be a haven (for scammers), even if these scams happen overseas. That is why our thorough due diligence on the integrity of such transactions will enable us to determine whether such exchanges are fraudulent in motivating unsuspecting people to invest in Bitcoin or other crypto coins.”
“If they are offering an ICO, our task will be to determine whether such an offer will be backed by assets. Because, as we say, many scammers profit from this. If they offer their digital coin on the market, they might be able to convince 50 unsuspecting investors and promise them the sun and the moon. And this is a Ponzi scheme. We will not allow this,” said the head of CEZA..
For security reasons, citizens living in the Philippines will simply be prohibited from investing or trading on fraudulent resources identified by the authorities, since the IP addresses of such exchanges and projects will be blocked. “In our system, no one from the Philippines will be able to log into the exchange because we are going to block them (the exchanges) by IP address. You will not be able to access a site with a blocked IP, and you will not be able to invest,” said Raul L. Lambino.
It should be noted that at the moment, CEZA has received about 60 applications from offshore companies that intend to open a cryptocurrency exchange in the country. And only 21 fintech companies were able to sign memorandums of understanding with CEZA, which may well earn the title of “Asia's Silicon Valley” in the near future.
And these are not big words, since there is constant development and modernization of the entire CEZA infrastructure.
Thus, thanks to the recently completed work at Tuguegarao Airport, the number of international flights has been increased, which should increase the level of convenience and accessibility to the province of Cagayan. Provider Convergys plans to roll out a 5G network in Cagayan, which in turn will provide a significant increase in data transfer speeds. This factor, together with the administration's intentions to create a technology garden in the Cagayan Valley near the beach area, is also one of the important components of success and increases the chances of gaining high trust in the blockchain community.
In the next 2 years, CEZA authorities plan to raise 200 million US dollars through blockchain startups, while the expected investment volume in the next 5 years should be at least 1 billion US dollars.
You May Also Like
Ukrainian parliamentarians want to simplify the possibility of working on the territory of Ukraine for foreign electronic payment systems
The constant demand for electronic payments could not but affect the Ukrainian market, which until today remained, perhaps, one of the most conservative and established in Europe. What prevented the entry of such foreign payment leaders as PayPal, Payza, Neteller and others?
$3 million in stolen electricity = $14.5 million in Bitcoin
A Taiwanese miner surnamed Yang was recently arrested and accused by authorities of illegally mining 100 million yuan ($14,500,000) in cryptocurrency. Young used $3.2 million in stolen electricity to power the mining rig.
