Every business whether a corporation or partnership registered with the SEC or a sole proprietorship registered with the DTI is under the obligation to immediately obtain business permits in the municipalities where they operate. Corporations whether PEZA registered or not operating without the necessary business permits will incur fines, penalties or closure from the BIR or City Hall.
Registration is required for every separate or distinct establishment or place of business including facility types where sales transactions occur and warehouse where inventory of goods for sale are kept, and must be obtained before commencement of business and payment of any tax due.
BIR FINES
Failure to Register
– Fine of not less than P5,000 but not more than P20,000 and imprisonment of not less than 6 months but not more than 2 years.
Compromise Fees
a. Cities 20,000 b. 1st class municipalities 10,000 c. 2nd class municipalities 5,000 d. 3rd class municipalities 2,000
The above are just a few of the penalties that the BIR may impose.
Mayor’s Permit
None registration with City Hall has its own penalties;
Makati City Penalty example: SEC. 3A.11. Penalty – Any violation of the provisions of this Article shall be punished by a fine of not less than One Thousands Pesos (P 1,000.00) nor more than Five Thousands Pesos (P 5,000.00), or imprisonment of not less than one (1) month not more than five (5) months, or both, at the discretion of the Court.
The above does not includes a surcharge of 25% for late payments and a 2% monthly interest on the unpaid taxes, fees or charges including surcharges.
The documentation required varies according to the municipality, below are listed :
– Barangay Clearance/Permit for the new year – Previous Year’s Business Permit – Financial Statement/ Income Tax Return for the preceding year – Latest Community Tax Certificate – Contract of Lease/ Lessor’s Permit – Comprehensive General Liability Insurance – List of Company Employees with Medical Certificates
Documentary requirements may vary from year to year, we recommend that you check for changes before filing your business permit renewal with City Hall.
Annual Mayor’s Permit Fees (business tax) vary according to the nature of the company’s business, the company’s preceding years gross sales are used to calculate the amount of tax due which can be less than 1% to 3% or more, regardless of when the business started to operate .
In the case of a newly-started business the initial tax for the year shall be calculated on the capital investment or paid up capital, contract of lease and size of office.
All business permits should be prominently displayed in every location where business is transacted.
The Philippines has numerous government agencies making it one of the most bureaucratic countries in South East Asia. It takes time to know exactly what process each agency handles. To make it easier here is our Philippine Government Agency guide.
For those who want to streamline the processing of their documents with the government, Dayanan Philippines Business Consultants is here to assist you with Philippines business registration, tax incentive application and alien employment visa. Philippines Government Agencies
Philippines Securities and Exchange Commission SEC
Philippines SEC
The SEC was set up on 26 Oct 1936 by virtue of the Commonwealth Act No. 83 or the Securities Act. Its establishment was prompted by the need to safeguard public interest in view of local stock market boom at that time. The SEC was abolished during the Japanese occupation and was replaced with the Philippine Executive Commission. It was reactivated in 1947 with the restoration of the Commonwealth Government. Due to the changes in the business environment under Pres. Ferdinand Marcos, the agency was reorganized on 29 Sept 1975 as a collegial body with 3 commissioners and was given quasi-judicial powers under PD902-A.
The SEC has jurisdiction and supervision over all corporations, partnerships or associations who are the grantees of primary franchises and/or a license or permit issued by the Government. It also supervises the registration of branch offices, representative offices and regional headquarters.
Philippines Department of Trade and Industry DTI
Philippines DTI
The DTI serves as the principal coordinative, sponsorship, and facilitative arm for trade, industry and investment activities, and a means to increase private sector activity to accelerate and sustain economic growth through the following strategies:
A comprehensive industrial growth strategy
A progressive and socially responsible liberalization and deregulation program
Policies designed for the expansion and diversification of both domestic and foreign trade
Under the DTI are seven major functional groups composed of bureaus that provide support to DTI’s line agencies and are involved in line operations, which deliver business and consumer services directly to the stakeholders and the public.
DTI agencies of special interest to foreign investors are:
– PEZA (Philippines Economic Zone Authority)
– BOI (Board of Investments)
– IPO (Intellectual Property Office)
– SEC (Securities and Exchange Commission)
It also supervises the registration of company names and sole proprietorship.
Philippines National Telecommunications Commission (NTC)
Philippines NTC
The NTC is the government agency established under Executive Order No. 546 promulgated on July 23, 1979, and conferred with regulatory and quasi-judicial functions taken over from the Board of Communications and the Telecommunications Control Bureau which were abolished in the same Order.
First and foremost, the NTC is the sole body that exercises jurisdiction over the supervision, adjudication and control over all telecommunications services throughout the country. For the effective enforcement of this responsibility, it adopts and promulgates such guidelines, rules, and regulations relative to the establishment operation and maintenance of various telecommunications facilities and services nationwide.
Although independent, in so far as its regulatory and quasi-judicial functions are concerned, the NTC remains under the administrative supervision of the Department of Transportation and Communication as an attached agency.
Philippine Social Security System SSS
Philippines SSS
The SSS is funded by salary deductions and employer contributions. Its role is to provide employee with health, disability, retirement, maternity, death and funeral benefits and salary, housing and business loans.
Home Development Mutual Fund HDMF
The birth of the Home Development Mutual Fund (HDMF), more popularly known as the Pag-IBIG Fund, was an answer to the need for a national savings program and an affordable home financing for the Filipino worker. The Fund was established on 11 June 1978 by virtue of Presidential Decree No. 1530 primarily to address these two basic yet equally important needs. Under the said law, there were two agencies that administered the Fund. The Social Security System handled the funds of private employees, while the Government Service Insurance System handled the savings of government workers.
Pag-IBIG membership mandatory for all SSS and GSIS member-employees.
Philippine Health Insurance Corporation PhilHealth
Philhealth
PhilHealth’s role is to ensure sufficient financial access of every Filipino to quality health care services through the effective and efficient administration of the National Health Insurance Program. It is a Government owned and Operated Health Care Corporation. Its main mission is to provide basic health insurance and health care financing to all Filipinos. Funding is provided by the central and local governments and employee
Department of Labor and Employment DOLE
Philippines DOLE
DOLE started as a small bureau in 1908. It became a department on December 8, 1933 with the passage of Act 4121. The DOLE is the national government agency mandated to formulate and implement policies and programs, and serve as the policy-advisory arm of the Executive Branch in the field of labor and employment. It consists of the Office of the Secretary, 7 bureaus, 6 services, 16 regional offices, 12 attached agencies and 38 overseas offices with a full manpower complement of 9,806.
The Alien Employment Visa (AEP) is issued by DOLE.
Technical Education and Skills Development Authority TESDA
The Technical Education and Skills Development Authority (TESDA) was established through the enactment of Republic Act No. 7796 otherwise known as the “Technical Education and Skills Development Act of 1994”, which was signed into law by President Fidel V. Ramos on August 25, 1994. This Act aims to encourage the full participation of and mobilize the industry, labor, local government units and technical-vocational institutions in the skills development of the country’s human resources.
TESDA
TESDA is mandated to:
Integrate, coordinate and monitor skills development programs; Restructure efforts to promote and develop middle-level manpower; Approve skills standards and tests; Develop an accreditation system for institutions involved in middle-level manpower development; Fund programs and projects for technical education and skills development; and Assist trainers training programs.
Contact Dayanan Philippines Business Consultants now for assistance with Philippine government agencies.
The definition of a Sole Proprietorship or “single proprietorship” in the Philippines – is a business structure owned by an sole individual who has full control/authority of its own and owns all the assets, personally owes and answers to all liabilities and losses. A sole proprietorship must apply for a business name and be registered with the DTI-National Capital Region (NCR). In the provinces, application may be filed with the DTI regional/provincial offices.
The major disadvantage of a sole proprietorship is the unlimited liability of the owner. Creditors will not only try to obtain the assets of the business but also the personal property of the owner as payment for debts.
The sole proprietorship uses the TIN of its owner and must apply for all the usual business permits required by a business in the Philippines.
There are minimal capital requirements for Filipino citizens.
Some types of business may need other endorsements from various government agencies.
General information needed to apply for a sole proprietorship.
A. Business Details
1. Location. Indicate the barangay, city/municipality, and region where business is/will be located.
2. Tax Identification Number (TIN). Indicate TIN duly issued by BIR to you as individual taxpayer. B. Owner’s Details
– First Name, Middle Name, Last Name, Suffix (if applicable).
– Date of Birth. Owner must be of legal age (at least eighteen [18] years old).
– Citizenship. For Filipino applicants, present two (2) primary ID or a combination of one (1) primary and one (1) secondary ID. Foreign Nationals must present the original and submit clear certified copy of the following, if applicable, namely: Certificate of Authority to Engage Business in the Philippines pursuant to Foreign Investment Act (Republic Act No. 7042 as amended); Certificate of Authority to Engage in Retail Trade per Republic Act No. 8762 (Retail Trade Liberalization Law), or such other applicable laws, as the case may be.
C. Owner’s Address
– House/Building No. This information include building name and floor number, Lot, Phase and Block numbers, and Subdivision, among others. Street, Barangay and Town/City, Province.
– Zip Code. Check the Philippine Postal Service Web site for proper Zip Code
DBC will assist you in obtaining all the necessary documents needed to apply for a Philippines sole proprietorship business registration and acquire all the necessary business permits. Contact DBC for a free assessment.
A sole proprietorship is only recommended for very small business due to the unlimited liability of the owner. We recommend setting up a corporation for most business and for foreign investors.
Success in the Philippines depends on choosing the right business consultant to assist you in studying the Philippines market and developing the correct market entry strategy. Starting and doing business in the Philippines requires information and knowledge.
DBC specializes in helping foreign companies acquire the specific facts they need to establish their office and find clients and partners. Introduce you to the necessary government agencies to obtain business permits and apply for tax incentives.
Business Plan Consultancy
Whether you are a local or international company DBC’s team of professional consultants has the required expertise to prepare comprehensive Feasibility Studies, Business Planning, Market Entry Strategy Reports, Market Research and Real Estate Development Market Studies.
Business Registration Consultant
DBC has assisted many local and foreign businesses, who wish to start doing business in the Philippines in completing their company registration requirements. Organizing all that is needed to have your Philippines business registration accomplished smoothly and rapidly with the required government agencies. Most companies will need to apply or register with the SEC, DTI, BIR, SSS, Pag-IBIG, and PhilHealth. DBC will explain the different company structures available in the Philippines and advise you on the advantages of each one.
Let DBC be your business consultant in the Philippines
Every business whether a corporation or partnership registered with the SEC or a sole proprietorship registered with the DTI is under the obligation to immediately obtain business permits in the municipalities where they operate.
