How To Register A Business In The Philippines
June 16, 2021
How can you register a business in the Philippines?
- Determine the business entity
- Register your business name
- Obtain permits from local government offices
- Register with the bureau of internal revenue
A quick look at the number of successful businesses today is convincing enough for anyone to start one themselves. According to data from the DTI, the MSME sector makes up 99.5% of all registered businesses in the Philippines and employs over 62.4% of the country’s labor force. If you recently came up with a business idea, you first have to know how to register a business in the Philippines.
To make sure your business operates within the regulations of the country and avoid hefty penalties, it is a must to register your business with various government agencies. Knowing what to do and what documents to prepare will help you complete the steps efficiently. In this guide, we round up steps on how to register your business in the Philippines.
Determine The Business Entity
The first step in registering a business in the Philippines is to determine the business entity you would like to set up.
If you are registering a sole proprietorship, the business will be owned and run by one person. You will be responsible for all the obligations of the business and you will need to register at the Department of Trade and Industry (DTI).
A partnership has two or more owners and responsibilities and profits are spread among them. Both partnerships and corporations are registered at the Securities and Exchange Commission (SEC).
Register Your Business Name
As a sole proprietor, you will register your business at DTI and you will need to check on the availability of your proposed business name through the Philippine Business Name Registration website. Prepare at least three proposed business names and bring two copies of the completed application forms and at least two government-issued IDs.
After you submit these requirements, you will move on to the next step which is to pay for the registration and documentary stamp tax. The DTI fees will depend on the territorial scope of your business: barangay (P200), municipal (P500), regional (P1,000), and national (P2,000). Keep in mind that the DTI Certificate of Registration has a five-year (5) validity period.
Meanwhile, partnerships and corporations, need to secure an SEC Registration Certificate. This is valid for fifty (50) years and may include the following documentation:
- Cover sheet for registration
- Reservation payment confirmation
- Articles of incorporation, and by-laws
- More documents will be required depending on the specific type of business
Obtain Permits From Local Government Offices
Depending on where you will set up your business, you’ll first need to obtain a barangay clearance and a Mayor’s Business Permit. Don’t forget that the barangay clearance is necessary in order for you to file for a Mayor’s Permit application.
Register With The Bureau of Internal Revenue
Being able to issue an official receipt and paying taxes are a must for any business. This is why you must register your business with the Bureau of Internal Revenue (BIR). To comply with the BIR, you must complete the following forms:
- BIR FORM 1901 (for sole proprietors)
- BIR FORM 1903 (for partnerships and corporations)
- BIR FORM 0605
- BIR FORM 2000
- Original and photocopies of DTI or SEC certificates
- Barangay clearance
- Mayor’s permit
- Proof of business address such as contract of lease (if rented) or land title (if owned)
Along with the issuance of your taxpayer identification number (TIN), you should also be given the “ask for receipt” sign to be posted on your establishment.
If you know and follow all the steps on how to register a business in the Philippines, you can already be ensured that you fully own your business and no one else could use your business name. Now all you have to do is to become your own boss and focus on growing your business.
Learn more tips about building your own business with none other than leading Filipino entrepreneur Benito Keh himself. He can provide you timeless advice to expand your entrepreneurial and leadership skills. Click here to get in touch with him.