Fees and Requirements for FDA-Approved Food Supplements in the Philippines (Part 2)

If you are interested to sell, import, and distribute FDA-approved food supplements in the Philippines, then the Food and Drug Administration (FDA) is your first stop. This article, Part 2 of this series, discusses the detailed requirements you need to prepare to get FDA approval as well as the corresponding fees and charges.

What kind of supplements need to be registered with the FDA?

All types of processed foods, including food supplements that contain no additional pharmacologically active ingredients, must receive approval first from the FDA. It must be noted that per FDA Circular 2016-014, the registration process applies to low-risk, medium-risk, and high-risk food products (refer to our previous article for a discussion on these categories).

How many kinds of FDA registrations do I need for my product?

One registration may satisfy different packaging sizes for the same product as long as they share the same brand and product names. They must also have exactly similar formulation and proportion of ingredients. When it comes to the label information, everything must also be the same except for net weight.

If you are a manufacturer, trader, or distributor (whether importer, exporter, or wholesaler), you need to get a License to Operate (LTO) before you can obtain a certificate of product registration (CPR).

To get prioritized in food registrations, you must attend and complete the Qualified Person in Industry Regulatory Affairs (QPIRA) Training organized by the Center for Food Regulation and Research (CFRR). Before availing the services of a Liaison Officer to help you transact with the FDA, check for their names in the FDA website first.

What are the requirements for FDA approval in the Philippines?

FDA-approved food supplements in the Philippines present these documents first:

  • Notarized and completed Integrated Application Form
  • Proof of payment of fees
  • Clear and complete loose labels or artworks of all packaging sizes
  • Sticker of importer for imported food supplements.
  • Pictures of the product from all different angles for all packaging sizes
  • For food supplements, a sample in actual commercial presentation needs to be submitted
  • Certificate of analysis to demonstrate compliance with Codex, national and other standards – Physical, Chemical and Microbiological Analysis, stability data of the finished product and Safety Data
  • Documentation to substantiate the use of claims in the given case
  • Certification to support use of logo’s (e.g. Halal, Kosher, Organic)
  • Certificate of analysis to determine compliance with applicable standards (e.g. Codex, Philippine National, etc.)
  • Relevant scientific studies to support the use of products for specific purposes
  • Certificate of analysis to determine compliance with FDA circular No. 2013
  • Quantitative analysis and computations to support nutrition facts/nutrient content claims
  • Scientific researches or studies published in peer-reviewed scientific journals to support declaration of health and nutrition claims
  • Other relevant supporting documents to substantiate claims other than health and nutrition
  • Additional requirements to address uncertainties on safety as deemed necessary

For more detailed information on these requirements, check out FDA Circular 2016-014 here.

How do I process my registration with FDA Philippines?

  • Download the Integrated Application Form [11] from the FDA website and fill-in the required details.
  • After filling up the document, it will generate a worksheet email which you have to send to pair@fda.gov.ph. A maximum of 10 applications with the FDA may be forwarded in a single email.
  • Your application will then be scheduled through a Document Tracking Log (DTL) sent to your email within two days.
  • After receiving the DTL, make sure to pay the fees. You can submit your application via soft copy (USB device). Note that only applications scheduled for the day will be accommodated.

What fees and charges do I need to pay for an FDA Philippines registration of my supplements?

This schedule of fees is based on FDA Administrative Order 2001-50

1) Product classification = PhP 500.00

2) Initial Registration for Food Supplements = PhP 1,000.00 (Valid for up to 2 years)

3) Renewal of Registration for Food Supplements = PhP 5,000.00 (Valid for up to 3 years)

4) Amendment of CPR = PhP 200.00

5) Re-application Fees = PhP 200.00

Please note that payment of fees cannot exceed ten applications. Manufacturing and distribution licenses require the payment of a separate fee. Such a license is initially valid for 1 year and 2 years upon renewal.

FDA-Approved Food Supplements in the Philippines: A Quick Guide (Part 1)

As the threat of the COVID-19 pandemic continues to loom, the adage “health is wealth” has never been more true. People are starting to invest more seriously in the physical well-being of their families and loved ones. This is where FDA-approved food supplements in the Philippines come in.

With experts saying that a vaccine is at least a year away, maybe even more, prevention is taking center stage. Supplements help individuals increase their daily intake of recommended energy and nutrient requirements. This makes people less vulnerable to common illnesses as well as the dreaded COVID-19.

If you are thinking of selling, importing, and distributing food supplements in the Philippines, you must first obtain the approval of the Food and Drug Administration (FDA). This article provides you the basics of FDA Philippines food standards, including items such as the difference between drug-based and processed food categories for supplements, prohibited and allowed ingredients, making therapeutic claims, and what to include in a food label.

In the upcoming Part 2 article, we will discuss the detailed requirements for FDA approval and the corresponding fees and charges.

What are Food or Dietary Supplements?

As defined by Administrative Order No. 2014-0029, these are processed food products that help supplement the diet. A food supplement may contain dietary ingredients such as vitamins, minerals, herbs, amino acids, and other dietary substances made from plant, animal, natural, or artificial matter. It may take various forms, including those of liquids, capsules, pills, tablets, powders, and gels. It is not marketed as a conventional food or as replacement for drugs and medicines.

Does my dietary supplement fall under the Food or Drug category?

Based on FDA Philippines Officer Order No. 22 s. 1991, your vitamin or mineral product will be classified as drug-based if it meets the following conditions:

1) Has clinical therapeutic claim/s with regards to a specific vitamin deficiency or disease;

2) Has a concentration per dosage form of greater than 150 percent of the Philippine Dietary Reference Index (PDRI) for water-soluble vitamins and/or greater than 105 percent of the PDRI for fat-soluble vitamins;

3) Takes the form of a pharmaceutical dosage or injectable; and

4) Has additional pharmacologically-active ingredients present

On the other hand, your product will be categorized as a food supplement (more specifically a “processed food”) if:

1) Its indication is that of “Dietary or Health Supplement;

2) Its concentration per dosage form is less than 105% of the PDRI for fat- soluble vitamins and/or less than 150 percent for water-soluble vitamins;

3) It may be available in both non-pharmaceutical and pharmaceutical dosage form except parenterals;

4) It is available as either a purified or a natural product; and

5) It contains no additional pharmacologically-active ingredients.

Under FDA Philippines Administrative Order No. 2014-0029 (Annex A), food products are further classified according to microbiological risk: low, medium, and high. If your dietary supplement contains herbs and botanicals and/or products with other nutritional substances, it will be categorized as a high-risk food; if it has vitamins and minerals and/or amino acids, it will be considered as a medium-risk food. The authorization process and the inspection priorities of the FDA would depend on these subcategories.

What ingredients can be included in my health supplement?

FDA-approved food supplements in the Philippines must meet the regulatory body’s key standards. Among these is the ASEAN Negative List, which details substances that should not be used in health supplements. The prohibited items include:

1) Deadly Nightshade

2) Marijuana

3) Hemlock

4) Chaparral

5) Opium / Poppy

For its part, FDA Philippines Circular 2006-016 enumerates all authorized food additives. These are some examples of what we call additives today:

1) Artificial sweeteners

2) Emulsifiers

3) Food Colors

4) Flavor Enhancers

5) Preservatives

Any food additive and functional classes that will be adopted by the Codex Alimentarius Commission (CAC) shall be automatically included as an addendum to the circular’s Appendix for Food Additives.

What kind of claims can my food supplement make?

Food product claims are regulated under FDA Philippines Circular 2007-002. This circular adopts the CAC Guidelines for Use of Nutrition and Health Claims as its standard for evaluating nutrition and health claims made in advertisements and food labels. It must be noted that products that make unproven claims could be banned from being sold in the Philippine market.

Other relevant regulations include:

1) Administrative order 2014-0029: prohibits the use of curative and therapeutic claims under Chapter VI, Part C of the Guidelines in the Registration of Processed Food Products.

2) Administrative Order 2014-0030: precludes the declaration of misleading and prohibited claims, specifically those in the labels of prepacked foods, under Section VII.

What should be on the label of my dietary supplement?

FDA Philippines Administrative Order No. 88-B s. 1984, as amended by Administrative Order 2014-0030, regulates the labeling of prepacked food, particularly food supplements. Its main provisions are:

1) The following details must be included on the label:

  • Product name
  • Brand name and/or trademark
  • Full ingredient list
  • Net content

Note: Either a per volume or per quantity indication is allowed. For multi-packs, the total quantity as well as the number of individual portions must be indicated.

  • Name and address of the manufacturer and/or repacker, packer, importer, trader, and distributor

Note: For imported products, the country of origin as well as the complete name and address of the importer should be indicated.

  • Lot identification
  • Storage conditions
  • Expiration date
  • Food allergen information (to be mentioned below the ingredient list)

Note: The following allergens and its derivative products must be clearly indicated on the label:

a) Cereals containing gluten
b) Crustaceans
c) Eggs
d) Fish
e) Milk, including lactose
f) Peanuts
g) Soybean
h) Sulfites
i) Tree nut and other nuts
  • Instructions for use
  • Nutrition information

Notes:

Full nutritional declaration is required, especially if a product claims to contain certain nutrients. Only foods for special purposes, medical or otherwise, are exempted. The quantities must be displayed in a tabular form and declared according to the portion size or a specific weight or volume. Vitamins and minerals are to be expressed in mg or µg. The exceptions are Vitamin A, D, and E, which are to be expressed in IU (International Units).

The indicated recommended daily allowance must conform to the Philippine Recommended Energy and Nutrient Intakes (RENI) for male adults aged 19 to 29. Foods for specific groups may use values applicable to such age groups, which will have to be indicated in the labeling. The actual nutrient content of vitamins and minerals should at no point be lower than 80 percent of what is declared on the label. There is no upper limit of overages for micro-nutrients and fiber though.

2) Additives must be properly labeled according to CAC standards.

3) All mandatory information on labels must be in English and/or Filipino. For imported products, the use of other languages is allowed but they should also carry a corresponding English translation.

4) For FDA-approved food supplements in the Philippines, the following statement in Filipino must be included in every advertisement or promotional effort as per Administrative Order No 2010-008:

“IMPORTANT REMINDER: THIS PRODUCT IS NOT A DRUG AND SHOULD NOT BE USED FOR ANY TYPE OF ILLNESS” (non-official translation)

This message should be printed in a size of at least one-third of the size of the largest letter or logo. It must be prominently printed using capital and bold letters using either Arial or Tahoma font.

5) Qualification for other standards such as for halal (Muslim) and kosher (Jewish) may be included in the label but would require proper substantiation. The assigned registration number may also be included on the label.

Need help with registering your food or dietary supplement?

If we handle it, you are guaranteed to have your FDA-approved food supplements in the Philippines. Let us help you. Contact us here and stay tuned for our next article on the registration process, requirements, and fees.

FDA CPR Certificate of Product Registration Requirements and Application Process in the Philippines

Certificate of Product Registration FDA Phils
Certificate of Product Registration FDA Phils.

Before you can start selling food items, cosmetics, or drugs in the Philippines, you need to secure first a Certificate of Product Registration (CPR) from the Food and Drug Administration (FDA).

Obtaining a CPR for your product involves knowing if it needs one, having the proper documents and requirements, and applying for it using the FDA’s system. Take note that each product being registered will have its own CPR. This means that each variant, flavor, and dosage will have its own certificate—basically, each item must be registered individually. There is no bulk processing option for FDA CPR application on their website.

Need to know more about how to apply for a Certificate of Product Registration from the FDA? Keep reading.

Click the links below to go directly to that part of this article:

  1. Products with Required Certificate of Product Registration (FDA CPR)
  2. Requirements for FDA CPR
  3. How to Get Certificate of Product Registration from FDA
  4. Automatic CPR Renewal
  5. Penalty for Products with no CPR

Products with Required Certificate of Product Registration (FDA CPR)

Which products need a CPR? The following items do:

1) Food Products (canned goods, bottled beverages, infant formulae, etc.)

2) Medicines, Pharmaceuticals, and Over-the-Counter Drugs

3) Medical Devices

4) Food Supplements (vitamins, minerals, energy boosters, etc.)

5) Toys

6) Veterinary Products (pet medications, vitamins, supplements, etc.)

7) Hazardous Household Products and Urban Pesticides (cleaning supplies, disinfectant sprays, etc.)

Do cosmetics need a Certificate of Product Registration?

Cosmetic products do not have a CPR, and instead are required to have a product notification. While the FDA needs to be informed regarding such cosmetics, the procedure outlined here is for obtaining a CPR only.

Requirements for FDA Certificate of Product Registration

If your product is listed above, you are required to process a CPR for your product. The following are the requirements for doing so:

1) A valid LTO or License to Operate which can be obtained from the FDA

2) A clear, scanned, and colored copy of loose labels of all packaging sizes for the products (or equivalent, as defined by FDA), as well as pictures of the product from all angles and in different packaging sizes. This allows easy recognition of a product as the same one being registered.

  • For food supplements, include blister packs, Alu-Alu packs, and secondary packaging (i.e. paper box or cardboard box).

3) Other requirements for traders, wholesalers, and distributors of locally manufactured food products / for importers and distributors

4) Documents to support product claims, such as:

  • Technical/nutrition health studies or reports
  • Market research studies
  • Certificate of analysis, quantitative analysis, and computations
  • Scientific reports or studies published in peer-reviewed scientific journals
  • Supporting certificates to allow the use of “Sangkap Pinoy”, Halal, Organic, Kosher, and other claims in compliance with current labeling requirements

5) Certificate of Analysis stating essential details to determine product compliance to food standards and regulations for the following:

  • Medium to high-risk products with standards of identity such as food for infants and young children, foods intended for special medical purposes, bottled water, etc) the certificate of analysis must be uploaded. The list of low, medium, and high risks can be found here on the FDA website.
  • Fortified food products covered by R.A. 8176 (iodized salt) and R.A. 8976 (cooking oil, flour, and refined sugar)

6) For food supplements, additional requirements include:

  • A stability study of the actual food supplement
  • Safety data, such as toxicity tests, must be attached to address safety concerns regarding the product.

7) Actual representative product sample of food supplement (for initial application only, and is not needed during CPR renewal).

Note: This is a list of general requirements; additional requirements and procedures may be required by the FDA depending on the product being registered. Confused? You can ask us about it.

Once you have these requirements, you can opt to register these products online using the FDA e-registration system, which can be found here.

How to Get Certificate of Product Registration from FDA

The following is the basic CPR e-registration procedure (as per FDA Circular 2016-014):

1) Secure your FDA E-registration log-in details.

2) Log in to the FDA website e-portal.

3) For first-time product applications, click on “New Case.”

4) Type the details of needed information of product, such as brand name, product name, food category, list of ingredients, product specifications, and other pertinent information.

5) Upload the required documents. The documents needed vary per product and if the product is for export or not. Please check the FDA website for more details.

Note: Maximum 2MB per attachment in PDF or PNG format, and 25 MB max for all attachments per application

6) Print Order of Payment and pay corresponding fees either in person at the FDA Main Office located in Alabang, through the Bancnet online payment gateway option as per FDA Advisory 2015-021, or whatever FDSA recommends on their site.

7) You can track the application progress through the process map indicated on the FDA website.

Automatic CPR Renewal

To make CPR renewal automatic, the following conditions must be met:

1) The renewal application must be filed before the expiration date of the CPR;

2) The automatic renewal fee must be paid prior to the filing of application; and

3) There should be no condition stated at the back of the issued Certificate of Product Registration.

In case of a condition, compliance with the condition must be met and proven by including a scanned copy of the acknowledgment letter from the FDA indicating that the condition has been met.

Penalty for Products with no CPR

What if you release the product to the market without the proper certification? Not only is this illegal, but once FDA is notified, they will issue a cease and desist order. They will take your products off the market AND require you to pay fines AND process CPRs for your products that were taken off the shelves.

Going against the law can destroy the name of your business as well. The FDA issues public health warnings against products without CPRs, and this means bad publicity for your brand.

All in all, the hassles and penalties brought about by not doing things properly is just not worth the risk.

Does the application for an FDA CPR sound too tedious?

If applying for a CPR sounds like a hassle to do it yourself, then let us help! Our team of experts can help you with the whole FDA process, not just for product registration. If you have any inquiries, you may contact us here.

How to Apply for FDA LTO (License to Operate) in the Philippines

Interested in FDA LTO application (License to Operate from the Philippine Food and Drug Administration) but don’t know where to start?

This new guide gives you a complete step-by-step process on how to apply for an FDA LTO in 2020.

While there are quite a few articles online on FDA LTO application, they are mostly outdated.

One major change to the process is that it is now done online via https://eportal.fda.gov.ph (the integrated application form may be found here).

Once processed and approved, the LTO will be mailed to you; no need to pick it up from regional FDA centers.

Click the links below to go directly to that part of this article:

  1. What is an LTO? Why would you need one?
  2. How to Apply for FDA eLTO User Account
  3. License to Operate Requirements
  4. Steps for FDA LTO Application
  5. Tips to make application easier and faster

What is an LTO or License to Operate? Why would you need one?

An LTO allows you to legally import, distribute, sell wholesale, and/or manufacture food, drugs, cosmetics, and medical devices. It is also a requirement before you can obtain a Certificate of Product Registration (CPR), a seal of approval which indicates that your product complies with health, safety, and technical standards set by the FDA in the Philippines.

Operating without a license can spell disaster for your business. If caught, your LTO may be suspended, revoked, canceled, or disapproved upon renewal. Likewise, existing licenses that were not renewed after one-hundred twenty (120) days from the date of expiration will be automatically canceled by the FDA. Not only that, but the company will automatically be delisted from the FDA’s list of licensed establishments, so be sure to renew on time.

Important Reminder: Only residents of the Philippines (either Filipino citizens or alien holders of resident visas) and majority Filipino-owned companies may apply for LTO.

All guidelines and penalties may be found on the FDA website: http://www.fda.gov.ph

 

How to Apply for FDA eLTO User Account

Per FDA Circular 2016-004 (Procedures on the Use of the New Application Form for License to Operate through the FDA Electronic Portal), the application process has been moved online. With the goal of increasing transparency, accessibility, and efficiency of the process, this decision has been especially beneficial for businesses based outside Metro Manila.

Before you can access the E-portal, you must first create a User Account, the application for which is not as straightforward as what you may be used to. Instead of a simple sign-up button, it instead involves sending a few emails. Here’s how to create a new User Account for the FDA E-Portal System:

Creating eLTO User Account
  • First, accomplish an authorization letter for the eLTO User Account Application. This will designate a specific individual as eLTO account holder.
  • Next, send an email to request for a User Account to the FDA’s Public Assistance, Information and Receiving (PAIR) unit via pair@fda.gov.ph with the following format:

SUBJECT: Request for eLTO User Account

BODY:

a. E-mail address (preferably company email address)
b. Name of the authorized company representative (preferably permanently employed and not merely a consultant)
c. Position in the company
d. Contact Number
e. Company Name

  • Don’t forget to attach a scanned Authorization Letter in PDF format. Be sure that it is completed (signed and notarized) and virus-free.

Below is a sample email provided by the FDA:

From: https://ww2.fda.gov.ph/attachments/article/330042/FDA%20Circular%20No.%202016-004.pdf
About the eLTO User Account

Please take note that the User Account details will be sent to the company email address provided in the body of the email, not to the original sender’s email address. User Accounts are usually issued within two (2) days upon receipt of the completed request by the FDA in the Philippines. Requests received after 5:00 pm on regular working days, holidays, Saturdays, and Sundays shall be processed on the next working day.

Each User Account is unique to one company and is valid for one (1) year. Requests for replacing the authorized company representative as well as account reactivation must be sent to pair@fda.gov.ph at least three (3) months before the expiration of the User Account.

Once you have a valid User Account in hand, the E-Portal can now be accessed. Filling up the forms and uploading the documents can now be done via the portal. The E-Portal accepts new, renewal, and variation applications.

The accomplishment of the eLTO may be done via http://www.fda.gov.ph.

License to Operate Requirements

The following are the License to Operate requirements for initial and renewal applications. Ensure that all documents are secured before applying to avoid processing delays.

Requirements for FDA LTO - Initial and Renewal Application

FDA LTO Initial Requirements:

  • Completed Application Form with Declaration and Undertaking
  • Proof of Business Name Registration
  • Risk Management Plan
  • Site Master File (for manufacturers of drugs, devices and cosmetics)
  • Fees payment

FDA LTO Renewal Requirements:

  • Completed Application Form with Declaration and Undertaking
  • Payment of fees

Now that you have all the requirements, the application for the actual license can now follow.

Steps for FDA LTO Application

Applying for an initial FDA LTO consists of the following steps: filing, evaluation, and inspection. An application is considered filed only if all necessary requirements are met, including payment of fees. After filing, the FDA will evaluate all LTO applications to determine whether to grant the license or not. Lastly, a pre-opening inspection shall be conducted for manufacturers. In addition, all establishments covered under the FDA may be inspected anytime by the agency to ensure proper compliance with its set rules and regulations.

  • Log-in to the e-Portal using the User Account provided by FDA at http://www.fda.gov.ph.
  • Click “New Case” on the upper left-hand side and select “License to Operate v2.0” which can be found under Electronic Licensing.
  • Make sure you’ve read and fully understood the “Declaration and Undertaking” and click the “I Agree” button before proceeding.
  • Under the General Information tab, select the appropriate Product Type, Primary Activity, and Type of Application from their respective drop-down menus.
  • (Each primary activity has its applicable sub-options. Accomplish the General Information appropriately).
  • Under Establishment Information, provide the complete establishment name, TIN, address, and contact details. Use the Show Map Tool and move the arrow to the exact address of the establishment and click the “Submit” button.
  • Provide needed information under “Details of the Authorized Officer” and “Details of the Applicant.”Upload the required documents (depending on LTO type). Make sure documents are in PDF format.
  • Double-check the total amount to be paid by looking at the Order of Payment section, which can be downloaded if needed.
  • Payment can be made using existing FDA mechanisms.
  • Please note: Under the “Assign Task” section, please click the “Continue” button in order for the application to be processed by the FDA.

Here are some tips to make application easier and faster:

Tips for Faster and Easier FDA LTO Application

Tip 1: Follow documentary requirements listed in Administrative Order (AO) 2016-0003 (“Guidelines on Unified Licensing Requirements and Procedures of the Food and Drug Administration”):

  • Submit files in PDF format and ensure that there are no bugs, viruses, or anything that can jeopardize the system of the FDA.
  • All documents must be scanned and compiled with 100-150 dots-per-inch (dpi).
  • All document file names must be less than 40 characters, should not contain the following characters: \ ? / : * ” > <

Tip 2: Make sure to submit all forms completely. Do not forget to attach files to emails before sending them.

Tip 3: Get assistance from DAYANAN Business Consultancy! With our FDA Consulting services, you would no longer have to stress and fret over the LTO application process.

After you’re done applying, expect your FDA License to Operate (LTO) in the mail! We hope these tips answer your queries on how to apply for an FDA LTO. If you would like to avail of our FDA consulting services, you may contact us here.

FDA Consulting Philippines

The Complete FAQ Guide on How to Renew Your Business Permit in the Philippines for 2020

Having a business registered in the Philippines requires you to renew its business permits annually.

It doesn’t matter if the company is a Single Proprietorship, a One Person Corporation, a Partnership, a Corporation, a Branch Office, or a Regional Headquarter (ROHQ). All business establishments, per Philippine law, must renew their permits or face possible closure of their operations as well as a loss of face to their clients. 

To help you avoid long lines and heavy monetary penalties, we give you our complete FAQ guide on how to renew your business permit in the Philippines for 2020. 

Frequently Asked Questions (FAQs):

 

What permits do I need to renew? When is the deadline for each? 

Business permit renewal season involves coordinating with three different government entities: the barangay, the city or municipality, and the Bureau of Internal Revenue (BIR). 

1. Barangay Permit or Clearance (Deadline: January 20)

A barangay permit certifies that a business establishment is compliant with the requirements set by its local government unit (LGU) of operation. It is also a requirement when securing the Mayor’s Permit. 

2. Mayor’s Permit or Business License (Deadline: January 20)

Each city or municipality has its own rules to comply with. The Mayor’s Permit certifies that a company is compliant with the ordinances of the city or municipal it operates in. 

3. BIR Renewal of Registration (Deadline: January 31)

The BIR issues a Certificate of Registration (COR) to a company when it is first established. To ensure its validity from year to year, a business establishment must pay a renewal fee of PhP 500.00 every January 31.

 

What are the penalties for non-renewal or late renewal of business permits? 

City or Municipality

If filing is not accomplished by January 20 of each year, the LGU concerned will impose a 25 percent surcharge on top of the unpaid taxes, charges, and fees assessed. Also, a negligent company will incur a 2 percent monthly interest on all unsettled fees, including the surcharge, until everything is paid off.

Extremely delinquent businesses, on the other hand, run the risk of closure and/or seizure of its properties and assets.

All these penalties are imposed by the Local Government Code of 1991.

BIR

A company that did not comply to the January 31 deadline will be fined an amount ranging from PhP 5,000.00 to PhP 20,000.00. Its officers also face the risk of imprisonment, with the term ranging from six months to a maximum of two years. 

 

What requirements do you need for business permit renewal with each government office?

Barangay

1. 2019 Barangay Permit (original and photocopy)

2. Official Receipt from last year (original and photocopy)

3. Accomplished application form (2 copies)

4. Renewal fee (varies per barangay)

City / Municipality

1. 2020 Barangay Permit (to be availed first for the current year)

2. 2019 Mayor’s Permit (original copy)

3. 2019 Official Receipt (original copy)

4. 2019 Audited Financial Statement

5. Lease Contract (if changing address)

6. Community Tax Certificate (CTC) or Cedula (to be secured first from City or Municipal Hall)

7. Comprehensive General Liability Policy (CGLP) insurance for 2020

8. Official receipt of CGLP availed

9. Renewal fee (varies per city or municipality)

Depending on the LGU concerned, you may also be asked to provide the following documents:

1. Fire and Safety Inspection Certificate (original copy) 

2. Sanitary Permit (original copy)

BIR

1. BIR Payment Form 0605 (Click this link to download from the BIR website)

2. PhP 500.00 annual business registration fee

 

What are the steps for renewing business permits? How long will the process take? 

Barangay

Estimated Time Needed: 1 day

1. Visit the barangay hall in whose district your company operates in. Secure a renewal application form.

2. After filling out the form, submit it along with the original copies of your 2019 Barangay Permit and Official Receipt.

3. The barangay’s permit division will then assess your renewal application and documentary requirements. If everything is in order, you may then pay the necessary renewal fee.

4. You will be given the Official Receipt for your Barangay Permit. You may then claim your new Barangay Permit on the date indicated in the Official Receipt.

City / Municipality

Estimated Time Needed: 1 to 2 weeks

1. Secure a renewal application form from the Business Permits and Licensing Office (BPLO) of the LGU that your company operates in.

2. Fill out the form then submit along with the documentary requirements for evaluation.

3. Based on the submitted documents, the BPLO will issue an assessment notice containing the amount of local business tax, real property tax, and other fees that your company needs to pay for 2020. You can choose to pay the entire annual fee in full or in quarterly installments. You may also contest the amount and request a lower assessment. 

4. Bring the assessment notice and pay the required fees at the City Treasurer’s Office. They will provide you the Official Receipt to be presented when you claim the Mayor’s Permit certificate.

5. If your documents are in order, pay the Mayor’s Permit renewal fee at the City Treasurer’s Office. You will be given a receiving copy of your documents.

6. It will take some time for the certificate to be released. In the meantime, the Official Receipt will serve as proof that you renewed your Mayor’s Permit on time if asked. 

7. You may then claim your new Business License from the City Treasurer’s Office on the date indicated in the Official Receipt.

BIR

Estimated Time Needed: 1 day

1. Fill up BIR Payment Form 0605 with details of your business establishment.

2. Bring the BIR Payment Form 0605 to your RDO’s Authorized Agent Bank (AAB) and pay the PhP 500.00 annual business registration fee there.

 

What other tips should I know about business permit renewal?

1. Don’t procrastinate. Preparing the documents required by your LGU at the last minute will land you in long waiting lines and possible payment of penalties. Use the whole month of December if necessary. Remember: the deadline for the whole process of business permit renewal is January 20.

2. Be OC (obsessive-compulsive). Paying attention to small details can save you a lot of time. Organize your documents as soon as you receive or print them. Triple-check what is written in your application form and its attachments. Bring enough cash before you head to the battle lines. 

3. Patience is a virtue. No matter how early you start preparing, you will probably still face lines at your barangay hall, city hall, and BIR RDO. Make sure you’re ready to play the waiting game. Bring a fan, towel, bottled water, and even a good book if you’re so inclined.

4. Copies can save you. You never know how many copies of a particular document will be asked of you at the counter. Bring extra copies of your required documents so you don’t have to run out to the nearest photocopier (and lose your spot in the lines).

5. Avoid fixers. Do everything aboveboard. Don’t listen to individuals who promise shortcuts and discounts in the business permit renewal process. Their quick fixes may also quickly land you in hot water for tax evasion.

 

The best partner for renewing your business permit is someone who tells you the fees and steps needed exactly as it is. At DAYANAN Business Consultancy, we do exactly just that. Having helped over a hundred companies through the process, we know exactly how to save you time and effort. This allows you to focus on your core business functions better.

Let us take care of filling out forms and going to government offices for you. Contact us today!

Pros and Cons of Starting Foreign Companies in the Philippines

Infographic summarizing the Pros and Cons for foreign companies in the Philippines

Like it or not, today’s business landscape is incredibly competitive and will continue to be so. It’s no wonder that companies scramble to build, maintain, and expand their edge over competitors. To get that proverbial edge, the savviest of entrepreneurs are exploring strategies that they have never pursued before.

Among these strategies is establishing businesses overseas. After all, one can make money anywhere in the world. In recent years, the Philippines has become a favored destination for aspiring moguls and tycoons. Opening foreign companies in the Philippines allows them to be successful even outside of their home countries.

Any businessman worth his salt would do his research before investing his hard-earned money in another country. After all, doing business in the Philippines is not for the faint-hearted. If you have ever thought of branching out abroad, you must be aware of the benefits and risks of doing so. To guide you, here is a short list of the pros and cons of starting your own business in the Philippines as a foreigner:

Pros:

Cons:

Pros of Starting Foreign Companies in the Philippines

A Large Market

With a population of over 100 million, the Philippines offers numerous opportunities for any enterprising businessman to sell his products and services. Filipinos have an affinity for Western culture and are famously consumer-driven. Foreigners would have an easier time adjusting here compared to other Southeast Asian countries like Thailand and Indonesia.

Despite the great income disparity between population sectors, a smart entrepreneur can profit by honing in on and marketing to specific segments. In addition, locating your business in the Philippines allows you to take advantage of the greater ASEAN and Asia-Pacific markets.

Low-Cost, Talented Labor

Naturally hardworking, Filipinos are the dream employees of every company. Each year, the country’s universities and colleges add thousands of graduates to an already large labor pool. This has been – and still is – a boon to the business process outsourcing (BPO) sector, with the average Filipino’s good command of the English language and excellent communication skills.

Salaries in the country are also much lower compared to North America and European countries. With the exchange rate hovering at around PhP 50 to USD 1, foreign companies in the Philippines definitely get more bang for their (payroll) buck.

Good-Enough Infrastructure

Despite being an archipelagic country, the main islands of the Philippines are surprisingly well-connected to each other and the outside world. Large cargo shipments mostly utilize the seaports, while smaller ones go through the various airports dotting the major cities.

Within the greater metropolitan Manila area, the key business hubs are Makati City, Bonifacio Global City (BGC), and Ortigas Center. Rivaling the likes of Hong Kong and Singapore, these places boast of state-of-the-art, eco-friendly communities that bring residents and businesses together.

While there remains a lot to be done to improve the country’s infrastructure, President Rodrigo Duterte has recently initiated the “Build, Build, Build” program to fast track major infrastructure projects that would benefit both local and foreign companies in the Philippines.

Incentives from the Government

The Philippine government, through the Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA), provides several incentives to attract foreign investments, especially into priority areas and industries marked for development.

Fiscal incentives include income tax holidays, tax exemptions and deductions, and preferential rates on the final tax of gross income (for PEZA-registered companies). Among the non-tax incentives are simplification of customs procedures for imported products, issuance of resident visas to foreign investors and their families, and the privilege to operate a bonded trading or manufacturing warehouse.

If it’s your first time to open an foreign-owned company in the Philippines, don’t forget to avail of these goodies!

Cons of Starting Foreign Companies in the Philippines

More Holidays in the Philippines

The Philippines has 18 official non-working holidays. Many of these are of great cultural significance, such as Christmas, New Year, the Christian Holy Week, and All Souls’ Day.

On the other hand, these holidays provide a ready-made, annually-occurring boon to consumer-oriented businesses. Marketing your products and services could not become any easier, with the extended Christmas season in the Philippines that unofficially starts in September and ends in February.

The Law Favors the Laborer

Most of the labor laws in the Philippines are geared to favor employees over management. For example, companies cannot simply fire underperforming employees at will. Before fully terminating someone, the employer has to prove first that the staff member concerned was at fault or failed to pass the standards of his/her probationary period. Companies are also mandated by Philippine law to provide severance pay and 13th-month pay.

These conditions may seem unfair to some, but overall such laws have contributed to higher morale and a lower turnover rate among Filipino employees compared to their foreign counterparts. That is something any smart businessman would appreciate.

Heavy Traffic

Sad to say, the Philippines lacks any kind of efficient mass transportation system. According to the Asian Development Bank, Metro Manila tops the list of 278 most congested cities in developing Asia. The sheer volume of public utility buses, jeepneys, and private vehicles on its roads during work hours leads to slow-moving traffic at best and outright gridlock at worst.

The good news is that various skyways and expressways, as well as a new train line in the northern part of Metro Manila, are being built to ease the traffic situation. It may take some time, but things are bound to get better.

Despite the government-provided incentives mentioned above, some foreign businessmen still hesitate to shortlist the Philippines as an investment destination because of the restriction on foreign ownership of land. They may, however, own 40 percent of a corporation that owns land. Most businesses are allowed to be 100% foreign-owned. The Foreign Investment Negative List contains the limitations of foreign ownership mandated by the constitution and specific laws.

It must be noted that 100% foreign ownership of a company catering to the Philippine local market is allowed, subject to having a minimum paid-in capital of USD 200,000.00. An exemption may be obtained for foreign companies in the Philippines that employ a minimum of 50 direct employees or use advanced technology, for a minimum paid-in capital of USD 100,000.00.

Need Help with Starting Your New Business?

You may be discouraged by some of the cons we enumerated, but don’t be. The Philippines has been one of the fastest-growing economies in Asia, and it will continue to expand in the coming years. With its friendly people and climate, you have even more incentives to build your dream business here.

If you don’t know where (and how) to start, we at DAYANAN Business Consultancy are here to help. Contact us today.

HR Consulting

A company’s most important resource is its people. To fully harness their productivity and avoid labor issues, your human resources system must be up to par. DAYANAN can help strengthen your existing HR infrastructure or even set it up from scratch.

We offer the most comprehensive HR Templates Pack optimized to Philippine labor conditions and regulations. The package includes the following:

  • Employee Handbook
  • Compensation Details
  • Proprietary Information and Confidentiality
  • Application for Employment
  • Probationary Employment Contract
  • Probationary Evaluation Form
  • Notice of Termination of Probationary Employment
  • Regularization Letter
  • Release Waiver and Quitclaim
  • Trainee Contract
  • Equipment Release Form
  • Certificate of Employment
  • Certificate of Employment and Compensation
  • SL-VL form
  • Employee Clearance
  • DOLE-Required Policies:
    • Alcohol-free Workplace
    • Drug-free Workplace
    • Hepatitis B
    • HIV / AIDS
    • Sexual Harassment
    • Smoke-free Workplace
    • TB

These documents come with our guarantee of iron-clad provisions that uphold employee rights while protecting businesses from legal liabilities. We can further customize these documents according to your company’s needs.

DAYANAN also provides ongoing HR support such as guidance on relevant laws, resolution of employee issues, and implementation of company-wide policies. Contact us today and get started on your way to HR success.

The Apostille: Simpler Authentication for Documents To Be Used Abroad

HCCH

Bringing documents from one state to another and having their validity recognized has always been difficult. A foreign corporation that wants to establish a Philippine subsidiary has to go through several steps just to authenticate its articles of incorporation from abroad. But with the Philippines recently joining the Apostille Convention, things are bound to get easier.

The Convention

The Apostille Convention (formally known as the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents) provides for the use of a security certificate called the “Apostille.” This simplifies the authentication process for public documents used across signatory countries. The Philippines officially became a member last September 12, 2018.

Drafted by the Hague Conference on Private International Law (HCCH), the international treaty will take effect between the Philippines and other states party to it on May 14, 2019. This is pending changes to be made by the Supreme Court to the Rules of Court with regards to foreign public documents. The Office of Consular Affairs under the Department of Foreign Affairs (DFA) will be responsible for implementing the treaty.

The Apostille

Previously, a public document must be authenticated both by the foreign ministry of its originating country and the foreign ministry of the country where it is to be used. This process is usually handled by embassies and consulates of the concerned states. In the Philippines, the certification issued by the DFA is popularly called the “red ribbon.”

Once the Convention becomes effective, public documents would no longer need to be consularized. An apostillized public document will immediately have legal effect in a foreign country where it is presented. Of course, the affixing of a red ribbon is still needed for states which are not members of the Convention.

The apostille is a standard form that can be placed or attached to the original document. It testifies that a document bears the signature of an authorized person, the capacity of the signatory, and an official stamp or seal. It does not, however, certify the content or purpose for which the document was issued.

Covered Documents

Public documents that can be apostillized according to the Convention are the following:

a) documents emanating from an authority or an official connected with the courts or tribunals of the State, including those emanating from a public prosecutor, a clerk of a court, or a process-server (“huissier de justice“)

b) administrative documents

c) notarial acts
       Note: This may include seemingly “private” documents such as contracts and wills

d) official certificates which are placed on documents signed by persons in their private capacity, such as official certificates recording the registration of a document or the fact that it was in existence on a certain date and official and notarial authentications of signatures.

Those that are not valid for apostillization include:

a) documents executed by diplomatic or consular agents;

b) administrative documents dealing directly with commercial or customs operations.

 

The apostille, once it is fully implemented in the Philippines, can boost trade and investment while making personal transactions easier. It will be useful for the millions of Filipinos working abroad as well as the large number of expatriates who have made (or are planning to make) the Philippines their second home.

How to Register Your Business in Makati City, Philippines

Makati City business registration

Makati City has long been the country’s leading business and financial hub, serving as home to 40 percent of the country’s top 1000 multinational and local corporations. The city boasts of a highly-developed transport and communications infrastructure, quality shopping centers, state-of-the-art hospitals, and premiere residential areas. All these advantages have made Makati the location of choice for new businesses.

We have previously covered the steps on registering your Philippine-based corporation with national- and municipal-level agencies. In this article, we will highlight the specific, up-to-date requirements and steps for business registration in Makati City.

Makati City Business Registration / Mayors’ Permit

BASIC REQUIREMENTS:

1) Locational Clearance for Business

– to determine if the business activity you are applying for is allowed in the area

– will be issued by the Zoning Administration Division after five (5) working days if an inspection is needed

2) Proof of Business Address

a. Contract of Lease (if the place of business is rented)

b. Transfer Certificate of Title / Tax Declaration / Real Property Tax Receipt (if the place of business is owned)

3) Proof of Business Name and Activity / Line of Business

a. Business Name Certificate from the Department of Trade and Industry (DTI) (if sole proprietorship)

b. Articles of Incorporation or Partnership from the Securities and Exchange Commission (SEC) (if corporation
or partnership)

4) Barangay Clearance for Business

5) Comprehensive General Liability Insurance (CGLI)

– protects an enterprise from liability claims arising in the course of business

ADDITIONAL REQUIREMENTS BASED ON NATURE OF BUSINESS BEING APPLIED:

1) Residence Certificate A and B for Single Proprietorship, C and C1 for Corporation

2) Contractor’s License issued by the Philippine Contractors Accreditation Board (PCAB) for General/Specialty
Engineering Contractors

3) National Food Authority (NFA) License for Dealers of Rice/Corn and Wheat

4) Food and Drug Administration (FDA) Certification for Bakeries and Drugstores

5) Authority from Bangko Sentral ng Pilipinas (BSP) for Banking Institutions

6) Accreditation Certificate issued by DTI for Auto Repair Shop, Electronics, Radio, and other Electrical Equipment Businesses

7) Customs Broker’s Accreditation granted by the Bureau of Customs (BOC) for Customs Brokerage Businesses

8) Real Estate Broker’s License issued by the Professional Regulation Commission (PRC) for Real Estate Brokers

9) License issued by the Department of Labor and Employment (DOLE) for Local Manpower/Recruitment Agencies

10) License issued by the Philippine Overseas and Employment Agency (POEA) for Manning and Crewing Services

11) Pest Control License issued by Fertilizers and Pesticide Authority for Pest Control Services

12) License issued by the Optimal Media Board (OMB) for Video Rental Services

13) Occupancy Permit for Real Estate Lessors

14) License to Operate from the Philippine National Police (PNP) for Private Security Agencies

15) Clearance issued by the Department of Environmental and Natural Resources (DENR) for Mining Companies

16) Franchise granted by the Land Transportation Franchising and Regulatory Board (LTFRB) for Rent-A-Car and Transportation Services

17) License to Own and Possess Firearms issued by PNP

18) Accreditation issued by the Department of Information and Communications Technology (DICT) for Messengerial or Courier Services

19) License issued by the Department of Energy (DOE) for Dealers of Liquefied Petroleum Gas (LPG)

20) License issued by the National Telecommunication Commission (NTC) for Telecommunications Companies

21) Certificate of Accreditation issued by Philippine Shippers’ Bureau for Seafreight Forwarders

22) Accreditation issued by the Technical Education and Skills Development Authority (TESDA) for Training Centers

23) Accreditation Certificate issued by the Department of Education (DepEd) for Educational Institutions

24) Certificate of Authority to Operate issued by SEC for Financial Lending Institutions

3EASY STEPS FOR GETTING YOUR MAYOR’S / BUSINESS PERMIT

   STEP 1:

   Location: Business Permits Office (BPO), Ground Floor, New Makati City Hall Building II

   Estimated Time Frame: 30 minutes

a. Secure application form from receiving or processing clerks. Be informed of the requirements and processes.

         Note: If your business is considered “Subject for Inspection,” you will have to proceed to the Inspection Division.

b. Have the BPO check your requirements and accept your application. Officials will evaluate and assess taxes, fees, and charges. The BPO Chief will then sign the billing statement and application form to indicate approval.

   STEP 2:

   Location: Business Tax Division / Treasury Department, Ground Floor, New Makati City Hall Building II

   Estimated Time Frame: 5 minutes

a. With your approved application form and billing statement at hand, pay the corresponding fees and tax at designated windows.

   STEP 3:

   Location: BPO

   Estimated Time Frame: 15 minutes

a. Claim your Business Permit, Sanitary Permit, and Fire Safety Inspection Notice.

Note: Inspections will be conducted after release of Business Permit by the Bureau of Fire Protection (BFP), Health Department, and Engineering Office.

TOTAL TIME: 50 minutes

 

Want to save even more time? Let the experts at DAYANAN Business Consultancy do the work for you! We’ll be happy to guide you through the ins and outs of the Philippine business registration process!

 

Source: Makati City BPO

Makati City skyline image taken from www.makati.gov.ph

The Philippines – A Prime Location for International Business

Philippines Asian Business Gateway
While many Asian countries claim to be the Gateway to East Asia –
The Philippines really is the most centrally located.

At the Crossroads – Gateway to East Asia

The Philippines is the perfect base for any company that wants to do business internationally. Being strategically located between two great trade routes – the Pacific Ocean and the South China Sea, the country is placed at the crossroads of international shipping and airlines. The Philippines is a vital entry point for over 500 million people in the ASEAN Market and a natural gateway to the East-Asian economies.

The government and the private sector is taking advantage of the Philippines prime location, continuously promoting and developing different areas of industry and targeted economic zones, with many incentives for foreign companies to bring operations here.

One of the driving forces behind this may be that the government is having difficulty keeping up with the ever-increasing demands on its budget. Whether it is for this reason or just a good business move, it is creating great opportunities for foreign investments and doing business in the Philippines.

Public-Private Partnership

The Government redefined its role through the Public-Private Partnership Program (PPP Program) in 1990. Privatization allows the private sector to participate in developing infrastructure and many services that previously were the government’s domain.

Public-Private Partnerships have become a primary source of capital in key areas such as:

• Airports
• Electricity
• Ports
• Toll-Ways
• Tourism
• Water Distribution

Since the PPP Program was started, limits on returns have been eliminated and the scope of projects available for investment has increased, and continues to do so.

Now – In 2014, they have many innovative Build-Operate-Transfer (BOT) arrangements and other variants of the BOT including:

• BLT – Build-Lease-Transfer
• BOO – Build-Own-Operate
• BTO – Build-Transfer-Operate
• CAO – Contract-Add-Operate
• DOT – Develop-Operate-Transfer
• ROO – Rehabilitate-Own-Operate
• ROT – Rehabilitate-Own-Transfer

Protecting Investments – Guaranty on ROI

All business ventures involve some risk. To persuade investors to do business with the government of the Philippines, they will offer support through subsidies, guarantees and others to lower the risk factors. They will also guarantee supplies, provide logistical support with things such as raw materials, make energy resources available, and give right-of-way in certain situations.

For the right projects, they will guaranty a continuous revenue stream, and in some instances, they will even provide loans. To attract as many investors as possible, the Philippine Government will allow the concessionaire to use public sector resources to pay debt service, capital costs, and operating expenses. They can also protect the investors from competition.

There are many more incentives for long-term investment in business in the Philippines. Take advantage of this prime location for business and make the move that will lead to tremendous growth opportunities for your business.

If you are interested in starting or expanding a business in the Philippines and want help from professional consultants, contact the DBC Team now for a free consultation. We have extensive experience with navigating through the process of establishing businesses in the Philippines.